Glossary of net zero terms
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If the long and growing list of net zero related acronyms is making your head spin, you're not alone! Here's a summary of net zero standards, frameworks and regulations and what they all mean.
BREEAM
Building Research Establishment Environmental Assessment Methodology
A voluntary environmental assessment method for buildings that helps to identify and reduce environmental impacts.
California SB 253 & SB 261
Senate Bills 253 and 261
Californian laws requiring large businesses with activities in California to disclose their greenhouse gas emissions (253) and climate-related financial risks (261).
CDP
Carbon Disclosure Project
A non-profit organisation that collects data from companies and provides a provides a snapshot of their disclosure and environmental performance. Scores and ranks companies on a scale of A to F based on their responses.
CSDDD
Corporate Sustainability Due Diligence Directive
A European Union directive that will require large companies to assess and disclose their environmental and social impacts, including those of their subsidaries and value chains. It also requires large companies to have Paris-aligned transition plans. It is like to be phased in from 2025 or 2026.
CSRD
Corporate Sustainability Reporting Directive
A European Union directive that will require medium and large companies to report on their environmental, social, and governance (ESG) performance. Companies will be phased-in from 2024.
CRREM
Carbon Risk Real Estate Monitor
CRREM aims to make climate risks for investors transparent by identifying properties at risk of 'stranding' due to the net zero transition. The CRREM tool provides SBTi-aligned pathways based on global carbon and energy budgets and the IEA's Net Zero Roadmap.
EFRAG
European Financial Reporting Advisory Group
An organisation set up by the European Commission to promote thought leadership and European perspectives in the International Accounting Standards Board (IASB) standard-setting process. Working since 2022 on the development of the ESRS.
EPRA
European Public Real Estate Association
The EPRA Sustainability Best Practices Recommendations (sBPR) Guidelines draw on other standards to provide a consistent way of measuring sustainability performance. Aim to bring greater consistency and clarity to companies’ disclosure around their environmental performance.
ESOS
Energy Savings Opportunities Scheme
The UK legislative transposition of the EU Energy Efficiency Directive Article 8, which requires companies over a certain size to undertake energy audits every four years, to identify cost effective energy saving measures. The current Phase 3 compliance round finishes in 2024.
ESRS
European Sustainability Reporting Standards
A set of sustainability reporting standards developed by the European Commission. The ESRS cover a wide range of environmental, social, and governance (ESG) issues.
EU Green Taxonomy
Taxonomy for Sustainable Activities
A classification system for sustainable economic activities. intended to help investors identify and invest in sustainable economic activities.
FCA
Financial Conduct Authority
UK regulator that oversees financial services firms. The FCA has a responsibility to promote sustainable finance and has published guidance on ESG disclosures.
FRC
Financial Reporting Council
The organisation responsible for setting the UK Corporate Governance and Stewardship Codes.
GHG Protocol
International standard for corporate GHG accounting
A set of standards for measuring and reporting greenhouse gas emissions, which are categorised under the different 'scopes'. The GHG Protocol's approach is the most widely used for measuring and reporting greenhouse gas emissions.
GRESB
Global Real Estate Sustainability Benchmark
A global sustainability assessment for real estate. GRESB is a platform that helps real estate companies assess and improve their sustainability performance.
ICVCM
The Integrity Council for the Voluntary Carbon Market
An independent governance body focused on carbon credit creation. The ICVCM ave published 'Core Carbon Principles' (CCPs) and an associated 'Assessment Framework' to assure carbon-crediting programs and methodologies to the quality thresholds set out in the CCPs.
IFRS S1 & S2
International Financial Reporting Standards Foundation Sustainability disclosure Standard 1 & Standard 2
Voluntary sustainability disclosure standards published by the ISSB in June 2023, designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face in their non-financial reporting.
INREV
European Association for Investors in Non-Listed Real Estate Vehicles
The association publishes INREV Sustainability Reporting Guidelines for the non-listed real estate investment industry, which aim to provide a coherent framework for ESG reporting in line with annual financial reporting.
ISO14064
International standard for GHG accounting
ISO14064 is an international standard for quantifying, monitoring, reporting and verifying greenhouse gas emissions. Part 1 covers organisations, part 2 projects and part 3 validation and verification.
ISO50001
International standard for energy management
An international standard for energy management systems. Organisations which are certified to the ISO50001 standard are exempt from ESOS.
ISSB
International Sustainability Standards Board
An organisation created by the IFRS Foundation, responsible for developing global sustainability reporting standards. The standards are identified as IFRS Standards, e.g. IFRS S1 & S2.
LEED
Leadership in Energy and Environmental Design
A green building certification system developed by the US Green Building Council. LEED is a voluntary certification system that recognises buildings that meet certain sustainability criteria.
NABERS (UK)
National Australian Built Environment Rating System (UK)
An adaptation of the Australian NABERS environmental performance rating programme for commercial buildings. It has two products: Design for Performance to drive energy-efficient new buildings, and NABERS Energy ratings to measure the energy efficiency of existing buildings.
Net Zero Standard
SBTi's Corporate Net Zero Standard
The SBTi defines and promotes best practice in science-based target setting. The SBTi assesses and approves companies' targets in line with its strict criteria, with the aim of achieving Paris-level emission reductions in the private sector.
NZAMI
Net Zero Asset Managers Initiative
Aims to galvanise the asset management industry to commit to a goal of net zero emissions. Assets worth $59 trillion are now covered by NZAMI commitments.
NZAOA
Net Zero Asset Owners Alliance
A member-led initiative of institutional investors committed to transitioning their investment portfolios to net-zero GHG emissions by 2050.
PCAF
Partnership for Carbon Accounting Financials
A global partnership of financial institutions working to develop and implement a harmonised approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. It publishes the Global GHG Accounting and Reporting Standard for the Financial Industry.
PRI
Principles for Responsible Investment
Investors that sign up to PRI believe that an economically efficient, sustainable global financial system is a necessity for long-term value creation. Founded in 2005, the PRI now has 4,000 signatories. Their website is a valuable resource for exploring sustainable investment and financial systems.
REEB
Real Estate Environmental Benchmark
A publicly available operational benchmark of environmental performance of commercial property in the UK.
SBTi
Science-based Targets Initiative
Provides companies with a framework to set climate targets in line with the Paris Agreement. Following it's establishment by leading the environmental NGOs, the SBTi recently become a standalone organisation and restructured to split out standard development and validation services.
SDG
UN Sustainable Development Goals
A set of 17 goals for sustainable development adopted by the United Nations in 2015. The SDGs are a set of aspirational goals that are being used by countries around the world to guide their development.
SDR
Sustainability Disclosure Requirements
A flagship UK policy aiming to drive decision-useful information on sustainability across the economy. It sets out the FCA’s expectations of asset managers when making sustainability claims and includes anti-greenwashing rules, product labels, and disclosure requirements.
SEC
Securities and Exchange Commission
A US regulator that oversees securities markets. The SEC has proposed climate related disclosure requirements for companies which will start in 2025.
SECR
Streamlined Energy and Carbon Reporting
UK legislation introduced in April 2019, requiring companies over a certain size to report on their annual energy use, carbon emissions and energy efficiency actions. SECR information has to be included as part of a company's financial reporting.
SFDR
Sustainable Finance Disclosure Regulation
A mandatory EU disclosure framework put in place to help direct the flow of private funding towards companies and projects supporting sustainability objectives.
TCFD
Taskforce for Climate-related Financial Disclosures
An international task force that developed recommendations for climate-related financial disclosures. The TCFD recommendations are being integrated into both voluntary and legislative frameworks on corporate reporting around the world
TPT
Transition Plan Taskforce
Launched by HM Treasury in April 2022 to develop the gold standard for private sector climate transition plans.
VCMI
Voluntary Carbon Markets Integrity Initiative
An international non-profit organisation seeking to enable high-integrity voluntary carbon markets (VCMs). Has created a 'Corporate Claims Code' for corporates using VCM as part of not net zero pathways. Focused on the 'demand side' of the VCM.
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