Glossary of Terms

Key Terms of ESG

Environmental

Carbon Offset

When a business directly or indirectly (funding projects in other locations) removes emissions from the atmosphere to support with net zero ambitions. Businesses should only resort to offsetting once they have taken the measures to reduce their own emissions as much as possible first.

Carbon footprint –

the total amount of greenhouse gasses products directly and indirectly by an organisation through their operations, usually measured annually and measured in carbon dioxide equivalent.

Carbon Neutral

Balancing carbon created by business operations equal to the amount removed by the business

CO2e- Carbon Dioxide equivalent

All greenhouses’ gasses have varying degrees of intensity therefor the standard measurement is shown as CO2e to allow for measurement and comparison of emissions on how they impact the environment.

CBAM – Carbon Border Adjustment Mechanism

This Is a tool to put fair price on the carbon emitted during the production of carbon intensive goods. The policy will put a price on industrial goods imported to the UK from the aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel sectors.

Circular Economy

a model of production and consumption focused around extending the life of products, this revolves around re-using products to ensure longevity and only recycling or dispose of products as the very last option.

ESG – Environmental, Social, Governance

A set of standards and principles used to measure guide an organisations impact. For larger organisations it us used by investors to screen for risks and opportunities.

Environmental Management System

The management of a business’s environmental responsibility and impact. For small businesses it helps to gain a greater understanding of their performance and set reduction goals of their most significant areas of emissions.

Greenwashing –

When organisations make unsubstantiated claims around their environmental performance.

Net zero

Refers to balancing the removal of all greenhouse gasses being equal to the amount of greenhouse gasses created by the organisation’s operations.

 ISO 14001

An internationally recognised standard for environmental management systems.

Life Cycle Assessment

 PPN06/21

A policy introduced by the UK government, requiring all suppliers bidding for government contracts for over £5 million to commit to net zero by 2050 and provide a clear carbon reduction plan.

Scope 1

Emissions generated from sources which are owned and controlled by the organisation, such as company owned vehicles

Scope 2

Emissions generated by a company indirectly, such as purchased energy and water.

Scope 3

Emissions not directly generated by the company but generated by all activities within the value chain. All emission generators not included in scope 1 and 2 fall into scope 3.

Sustainability

Supporting and maintaining operations over a long period of time without damaging the environment or depleting resources for society.

United nations Sustainable Development Goals

Also known as the global goals, in 2015 were adopted by the United Nations as a global call to end poverty, protect the planet, and ensure that by 2030 people can live in peace and prosperity.

Social value terms

Community impact

Typically refers to the direct advantages a project brings to the local community, such as employment opportunities, improved facilities, community engagement ect.

Social impact

Social impact typically, refers to the long-term sustainable impact a business has on society and the environment.

Social value

Typically, focuses on short term benefits that a scheme provides to society through schemes and general business operations

The Social Value Model (PPN 06/20)

Announced in September 2020 and launched January 2021, the social value model is a government framework which sets their social value priorities for central government procurement.

5 Policy Themes of the social value model

 – Covid-19 recovery, tackling economic inequality, Promoting equal opportunities, fighting climate change, improving wellbeing

Social enterprise

A business that aims to make a profit, but which reinvests or donated them to create positive social change

Governance

Director – Responsible for manging a company activities and success.

Board of Directors – a committee which supervises the activities of a business or organisation offering guidance and decision making.

Risk management – Process of identifying, assessing and mitigating threats or uncertainties which can impact the business

Succession planning – process and plan for replacing and passing on leadership roles to ensure business continuity.

Code of conduct – This is a comprehensive document detailing the ethical standards of expected from employees, leaders and board members.

Employee handbook – A guide that explains how a workplace functions for employees, useful information, company specific guides, policies and procedures. This should be stored in one central place available to all employees.