ESG, CSRD, ESRS, GHG, SCDDA – does that sound like a closed book to you? No wonder! The world of sustainability is full of abbreviations, standards and guidelines that can make even experienced managers and experts break out in a sweat. But don’t worry: this article is your practical guide through the ESG jungle. Here you will find clear, compact explanations of the most important concepts – whether for a quick overview, the next strategy discussion or CSRD preparation.
What does ESG stand for?
ESG stands for Environmental, Social, Governance and is the compass for sustainable business. It is not just about ‘green’ issues, but about how companies take responsibility for the climate, employees, supply chains and transparent decisions – and make this measurable.
What is the CSRD?
The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that obliges companies to report comprehensively on their sustainability activities. It replaces the previous Non-Financial Reporting Directive (NFRD) and sets new standards for transparency, comparability and depth of ESG reporting.
What are the ESRS?
The European Sustainability Reporting Standards (ESRS) specify what must be included in a sustainability report in accordance with the CSRD. They define the content, key figures and structure for ESG reports and thus ensure comparability at EU level.
What does GHG mean?
GHG stands for Greenhouse Gas. This includes emissions such as CO₂, methane and nitrous oxide. A company’s GHG balance sheet is a central component of all climate and sustainability reporting.
What is the GHG Protocol?
The GHG Protocol is the world’s most important ‘instruction manual’ for companies to calculate their greenhouse gas emissions. It specifies how CO₂, methane, etc. are recorded – from the company’s own heating system (Scope 1) to paper consumption in the home office (Scope 3). Without this set of rules, carbon footprints would be neither comparable nor reliable.
What are Scope 1, 2 and 3 emissions?
- Scope 1: Direct emissions generated by our own facilities or vehicles.
- Scope 2: Indirect emissions from purchased energy, e.g. electricity or heat.
- Scope 3: Other indirect emissions along the value chain, e.g. from suppliers, business trips or product use.
This subdivision is essential for a company’s carbon footprint and climate management.
What is the materiality analysis?
The materiality analysis is like a filter for your ESG reporting: it helps you to find out which sustainability topics are really relevant for your company and your stakeholders – instead of getting bogged down in 100 topics. Result: You focus on what is really important for your business, the environment and society.
What does double materiality mean?
Double materiality combines two perspectives:
- How do sustainability risks (e.g. climate change) affect our business? (Inside-Out)
- What impact does our company have on the environment and society? (Outside-In)
So it’s always about both sides of the coin – not just about self-protection, but also about responsibility.
What is the EU taxonomy?
The EU taxonomy is an EU classification system that defines which economic activities are considered environmentally sustainable. Companies must disclose the extent to which their activities meet these criteria.
What does XBRL mean?
XBRL (eXtensible Business Reporting Language) is the ‘digital language’ for company reports – whether financial or sustainability. Instead of PDFs, it provides machine-readable data that authorities and analysts can evaluate automatically. For companies, this means more transparency and less manual work (once the system is up and running).
Other important ESG terms:
What is the DNK?
The German Sustainability Code (DNK) is a voluntary standard for sustainability reporting in Germany and the DACH region – often used as an introduction to ESG topics.
What does CSR mean?
Corporate Social Responsibility (CSR) describes the social responsibility of companies – from fair working conditions to environmental measures.
What are SDGs?
The Sustainable Development Goals (SDGs) are 17 global sustainability goals of the United Nations. Companies use them as a guide for their ESG strategies.
What is the SCDDA?
The German Supply Chain Due Diligence Act (SCDDA) obliges companies in Germany to identify and minimize human rights and environmental risks in their supply chain.
Conclusion: Understanding ESG means acting better
Whether for reporting, strategy development or compliance – a solid understanding of key ESG terms is essential today. This glossary article provides you with the perfect basis for consolidating your knowledge and being able to have a say in regulatory requirements such as the CSRD at eye level.
Tip:
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