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ESG Glossary: Top 15 Terms You Need to Know

Want to learn more about ESG? Check out our comprehensive glossary of environmental, social, and governance terms.


Published February 17, 2022

If you are new to the world of Environmental, Social, and governance (ESG), you’ll be confronted with a dizzying array of acronyms and terms. CDP, GRI, SASB, TCFD, are just some of the alphabet soup of names you’ll have to wade through to ensure your ESG performance metrics are collected and disclosed correctly.

As pressure grows for companies to make ESG disclosures in line with their financial disclosures, companies must get up to speed with this quickly evolving nascent field. To help with this, here are fifteen essential ESG terms, bodies, and frameworks to get acquainted with to streamline your ESG journey.

The ABC’s of ESG


Benchmarking is the practice of measuring and comparing ESG performance with other companies in your sector or geography to understand where your company fits among your competitors. For accurate benchmarking, alignment with ESG frameworks, standards, and measurement methodologies is essential.

CDP Carbon Disclosure Project  

CDP is a not-for-profit charity that runs a global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. 

CMAP Climate Management and Accounting Platform  

CMAPs have been developed as a modern tool to perform carbon accounting in a completely software-based environment. Through a Software as a Service model, CMAP companies can deliver substantially more efficient and cost-effective carbon accounting. CMAPs are just one of a growing number of ESG software that helps collect and report ESG data.

CSR Corporate Social Responsibility

CSR is a voluntary way for companies to commit to ethical business practices and improve their environmental, economic, and social sustainability. ESG is a way for companies to measure their CSR. This leads us to...

ESG Environmental, Social, and Governance

ESG are the three overarching pillars through which an organization’s effect on the environment and society can be measured. Initially used as a tool for investors to understand a company's long-term financial performance, ESG is now central to business strategies. It assesses a company's ability to deal with the defining issues of our time, the climate crisis, environmental degradation, social injustice, and inequality. 

GHGP Greenhouse Gas Protocol  

Created in 1997, the GHGP is the original carbon accounting standard. It provides guidelines for organizations to develop greenhouse gas (GHG) emissions inventories. Under the GHGP, all emissions are broken down into three scopes. Scope 1 and 2 are required to be measured, whereas Scope 3 is currently optional.

  • Scope 1 refers to the direct emissions from an organization's operations, including company vehicles and buildings.

  • Scope 2 categorizes indirect emissions from purchased electricity, heating, and cooling.

  • Scope 3 comprises all other indirect emissions in a company's value chain.


Greenwashing refers to the act of companies portraying a more sustainable, ethical, or “green” image of themselves for marketing purposes. Acts of greenwash occur when a company misinforms or makes unsubstantiated claims for a competitive advantage. Some jurisdictions have begun to legislate to combat greenwash. The EU’s taxonomy regulation is one example of a piece of legislation designed to prevent greenwashing behavior.

GRI The Global Reporting Initiative

Founded in 1997 following public outcry over the Exxon Valdez oil spill, the GRI created the first global standards for sustainability reporting (the GRI Standards) and is today one of the most commonly used reporting frameworks, helping businesses, governments, and other organizations understand and communicate the impact of companies on critical sustainability issues.

IPCC Intergovernmental Panel on Climate Change  

The IPCC is the UN’s climate change body. It provides policymakers with regular scientific assessments on climate change, its implications, and potential future risks and puts forward adaptation and mitigation options.


ESG issues or information are considered material if they need to be accounted for when considering an organization's risks and opportunities. Material issues are those that cannot be ignored when assessing the sustainability of a company. Materiality has now evolved to be a concept of  “double materiality.” Double materiality speaks to the fact that ESG issues or information can be material from both financial and non-financial perspectives.

Net Zero  

Net zero is a common target for organizations to commit to typically by 2050 as prescribed by the IPCC. It means to negate the amount of carbon your company emits by withdrawing the same amount of carbon through offsets and having it stored permanently in carbon sinks. 

PCAF Partnership for Carbon Accounting Financials 

PCAF is an industry-led initiative created by Dutch banks in 2015 and then adopted as a global standard in 2019 to assist financial institutions in aligning their financed emissions — emissions tied to loans, investments, and debts, with net-zero targets by 2050 (in line with the Paris Agreement). This initiative introduced a globally accepted standard for measuring and disclosing financed emissions and provided in-depth methodological guidance to measure and disclose the GHG emissions of eight asset classes. 

SDG Sustainable Development Goals  

SDGs are 17 interconnected goals for sustainable development set by the UN in 2015—their objective being for these goals to be met by 2030. The 17 goals aim to “provide a shared blueprint for peace and prosperity for people and the planet, now and into the future.” While these were originally intended to support Governmental progress, they are now widely used by companies to disclose their sustainability practices.

TCFD Task Force for Climate-Related Financial Disclosures 

Created in 2015, the TCFD provides a common global approach to how companies report on the financial impacts of climate change and helps companies align with the goals of the Paris Agreement. The TCFD recommends four primary areas of focus for climate disclosure: governance, strategy, risk management, and metrics and targets for climate-related risks and opportunities.

VRF Value Reporting Framework

The VRF covers three frameworks: 

  • The Integrated Thinking Principles guide board and management planning and decision-making.

  •  The Integrated Reporting Framework provides principles-based, multi-capital guidance for comprehensive corporate reporting.

  •  The SASB Standards are a powerful tool to inform investor decision-making when embedded in investment tools and processes. 

All of which combine to offer a comprehensive suite of resources designed to help businesses and investors develop a shared understanding of enterprise value.

© 2022 Persefoni AI Inc. All rights reserved. This presentation is the exclusive property of Persefoni and may not be copied or distributed, in whole or in part, without the express permission of Persefoni. Persefoni is the leading Climate Management & Accounting Platform (CMAP). The company’s Software-as-a-Service solutions enable enterprises and financial institutions to meet stakeholder and regulatory climate disclosure requirements with the highest degrees of trust, transparency, and ease. As the ERP of Carbon, the Persefoni platform provides users a single source of carbon truth across their organization, enabling them to manage their carbon transactions and inventory with the same rigor and confidence as their financial transactions.

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