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Glossary of Impact terms

Welcome to our Impact Glossary!

A comprehensive guide designed to simplify the often complex language of environmental and social impact.
Written by: Nil Khalifa
glossary

Glossary of terms

Accreditation

A process to independently evaluate a person or a conformity assessment body against recognised standards, conveying formal demonstration of the person’s or body’s impartiality and competence to carry out specific conformity assessment tasks, and an acknowledgement of this particular status and/or qualifications.

Source: SVI Glossary 2.0

Accuracy

Accuracy is the degree of precision with which the change has been quantified.

Source: SVI Glossary 2.0

Actions

Actions refer to (i) actions and action plans (including transition plans) that are undertaken to ensure that the undertaking delivers against targets set and through which the undertaking seeks to address material impacts, risks and opportunities; and (ii) decisions to support these with financial, human or technological resources.

Source: ESRS 1 General requirements

Activity

The activities under analysis.

Source: SVI Glossary 2.0

Affected communities

People or group(s) living or working in the same area that has been or may be affected by a reporting undertaking’s operations or through its value chain. Affected communities can range from those living adjacent to the undertaking’s operations (local communities) to those living at a distance. Affected communities include actually and potentially affected indigenous peoples.

Source: ESRS S3 Affected communities

Air pollutants

Direct emissions of sulphur dioxides (SO2), nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOC), and fine particulate matter (PM2,5) as defined in Article 3, points (5) to (8), of Directive (EU) 2016/2284 of the European Parliament and of the Council(15), ammonia (NH3) as referred to in that Directive and heavy metals (HM) as referred to in Annex I to that Directive.

Source: ESRS E2 Pollution

Ambitious outcome target

Pre-determined Outcome Level to be achieved by a specific point in time that would provide people affected with optimal wellbeing.

Source: SVI Glossary 2.0

Area at water risk

Areas at risk cover several physical aspects related to water including water availability, quality, quantity (including areas at high water-stress), accessibility of water, regulatory or reputational issues (including the shared use of water with communities and affordability of water) for its facilities and for the facilities of key suppliers.

Source: ESRS E3 Water and marine resources

Aspect of wellbeing

Subjective and objective, psychological or physical human needs.

Source: SVI Glossary 2.0

Assurance

A process to assemble demonstrable evidence that specified requirements relating to a product, process, system, person or body are fulfilled with the expressed aim of improving confidence in the object of assurance, that is performed by an impartial person or body unbiased towards the person or organisation that provides the object of assurance or towards stakeholder interests in that object.

Source: SVI Glossary 2.0

Attribution

An assessment of how much of the outcome depth was caused by the contribution of different organisations or people.

Source: SVI Glossary 2.0

Audit

A systematic, independent and documented process for obtaining evidence and assessing it objectively to determine the extent to which specified requirements are fulfilled.

Source: SVI Glossary 2.0

Avoidance

Measures taken to prevent impacts from occurring in the first place, for instance by changing or adjusting the development project’s location and/or the scope, nature and timing of its activities.

Source: ESRS E4 Biodiversity and ecosystems

Balanced scorecard

This is a methodology to identify financial and non-financial outcomes to create a better understanding of an organisation’s strategic priorities.

Baseline

A starting point used for comparisons. Collecting your outcomes data is only a part of the story. Creating a baseline lets you see the true difference you are making and informs the investment process.

Source: IMP

Beneficiaries

The people or organisation that your social investment is trying to help. Having a robust methodology to understand how people have benefited from your interventions is fundamental to any evaluation process.

Biodiversity

The variability among living organisms from all sources including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are a part. This includes variation in genetic, phenotypic, phylogenetic, and functional attributes, as well as changes in abundance and distribution over time and space within and among species, biological communities and ecosystems.

Source: ESRS E4 Biodiversity and ecosystems

Biodiversity loss

The reduction of any aspect of biological diversity (i.e., diversity at the genetic, species and ecosystem levels) is lost in a particular area through death (including extinction), destruction or manual removal; it can refer to many scales, from global extinctions to population extinctions, resulting in decreased total diversity at the same scale.

Source: ESRS E4 Biodiversity and ecosystems

Blue economy

All the sources of financial and non-financial value that humanity derives from marine environments. It includes all economic activities related to oceans, seas and coasts.

Source: ESRS E3 Water and marine resources

Bribery

Dishonestly persuading someone to act in your favour by giving them a gift of money or another inducement.

Source: ESRS G1 Business conduct

Business as usual

In the context of this [draft] Standard, business as usual is to be understood as a scenario where the undertaking does not take significant actions to shift away its business model from a linear economy, i.e. an economy in which finite resources are extracted to make products that are used – generally not to their full potential – and then thrown away (‘take-make-waste’), leading to waste, pollution, and the degradation of natural systems.

Source: ESRS E5 Resource use and circular economy

Business model

The undertaking’s system of transforming inputs through its business activities into outputs and outcomes that aims to fulfil the undertaking’s strategic purposes and create value over the short-, medium- and long-term time horizons. The undertaking may have one or more business models.

Source: ESRS 2 General disclosures

By-product

A substance or object resulting from a production process the primary aim of which is not the production of that substance or object is considered not to be waste, but to be a by-product if the following conditions are met:

(a) further use of the substance or object is certain;

(b) the substance or object can be used directly without any further processing other than normal industrial practice;

(c) the substance or object is produced as an integral part of a production process; and (d) further use is lawful, i.e., the substance or object fulfils all relevant product, environmental and health protection requirements for the specific use and will not lead to overall adverse environmental or human health impacts.

Source: ESRS E5 Resource use and circular economy

Capitals approach

An approach that enables organisations to understand how their success is directly or indirectly underpinned by natural capital, social capital and human capital, empowering them to make decisions that offer the greatest value across all capitals.

Carbon credit

A carbon credit is a convertible and transferable instrument representing GHG emissions that have been reduced, avoided or removed through projects that are verified according to recognised quality standards. Carbon credits can be issued from projects within (sometimes referred to as insets) or outside an undertaking’s value chain (sometimes referred to as offsets).

Source: ESRS E1 Climate change

Carbon dioxide (CO2) equivalent (eq)

The amount of carbon dioxide (CO2) emission that would cause the same integrated radiative forcing or temperature change, over a given time horizon, as an emitted amount of a greenhouse gas (GHG) or a mixture of GHGs. CO2eq is the universal unit of measurement to indicate the global warming potential (GWP) of each greenhouse gas, expressed in terms of the GWP of one unit of carbon dioxide. It is used to evaluate releasing (or avoiding releasing) different greenhouse gases on a common basis.

Source: ESRS E1 Climate change

Causality

The relation of cause and effect.

Source: SVI Glossary 2.0

Certify

Generic expression used to include all means of communicating (e.g. the issue of accredited practitioner certificates by SVI) that fulfilment of specified requirements has been demonstrated.

Source: SVI Glossary 2.0

Child labour

Work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development. It refers to work that:

i.e., is mentally, physically, socially or morally dangerous and harmful to children; and/or

ii. interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work. For the purpose of this definition, a child refers to a person under the age of 15 years, or under the age of completion of compulsory schooling, whichever is higher. Exceptions can occur in certain countries where economies and educational facilities are insufficiently developed, and a minimum age of 14 years applies. These countries of exception are specified by the International Labour Organisation (ILO) in response to a special application by the country concerned and in consultation with representative organisations of employers and workers.

Source: ESRS S1 Own workforce

Circular economy

An economic system whereby the value of products, materials and other resources in the economy is maintained for as long as possible, enhancing their efficient use in production and consumption, thereby reducing the environmental impact of their use, minimising waste and the release of hazardous substances at all stages of their life cycle, including through the application of the waste hierarchy.

Source: ESRS E5 Resource use and circular economy

Climate change adaptation

Climate change adaptation means the process of adjustment to actual and expected climate change and its impacts. (based on the Regulation (EU) 2020/852)

Source: ESRS E1 Climate change

Climate change mitigation

Climate change mitigation means the process of reducing GHG emissions and holding the increase in the global average temperature to well below 2 °C and pursuing efforts to limit it to 1,5 °C above pre-industrial levels, as laid down in the Paris Agreement. (based on the Regulation (EU) 2020/852)

Source: ESRS E1 Climate change

Climate resilience

The capacity of an entity to adjust to uncertainty related to climate change. This involves the capacity to manage climate-related risks and benefits from climate-related opportunities, including the ability to respond and adapt to transition risks and physical risks.

Source: ESRS E1 Climate change

Climate-related physical risk

Climate-related opportunities refer to the potential positive effects related to climate change on the undertaking. Efforts to mitigate and adapt to climate change can produce opportunities for undertakings, such as through resource efficiency and cost savings, the adoption and utilisation of low-emissions energy sources, the development of new products and services, and building resilience along the supply chain. Climate-related opportunities will vary depending on the region, market, and industry where an undertaking operates.

Source: ESRS E1 Climate change

Collective bargaining

All negotiations which take place between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more trade unions or, in their absence, the representatives of the workers duly elected and authorised by them in accordance with national laws and regulations, on the other, for:

(i) determining working conditions and terms of employment; and/or

(ii) regulating relations between employers and workers; and/or (iii) regulating relations between employers or their organisations and a workers’ organisation or workers’ organisations.

Source: ESRS S1 Own workforce

Completeness

Completeness is the extent to which the account includes a description of all the materially relevant changes for all people affected.

Source: SVI Glossary 2.0

Consumer

Individuals who acquire, consume or use goods and services for personal use, either for themselves or for others, and not for resale or commercial purposes. Consumers include actually and potentially affected end-users.

Source: ESRS S4 Consumers and end-users

Corporate culture

Corporate culture expresses goals through values and beliefs. It guides the undertaking’s activities through shared assumptions and group norms such as values or mission statements or a code of conduct.

Source: ESRS G1 Business conduct

Corporate social responsibility (CSR)

Corporate social responsibility is a very broad concept, but it is essentially an acknowledgement of the social implications of doing business beyond the purely financial. In recent time CSR has moved beyond self-regulation to be included in governance codes and national and international legislation.

Corruption

Abuse of entrusted power for private gain, which can be instigated by individuals or organisations. It includes practices such as facilitation payments, fraud, extortion, collusion, and money laundering. It also includes an offer or receipt of any gift, loan, fee, reward, or other advantage to or from any person as an inducement to do something that is dishonest, illegal, or a breach of trust in the conduct of the undertaking’s business. This can include cash or in-kind benefits, such as free goods, gifts, and holidays, or special personal services provided for the purpose of an improper advantage, or that can result in moral pressure to receive such an advantage.

Source: ESRS G1 Business conduct

Cost benefit analysis

Framework for accounting for Fiscal Value.

Source: SVI Glossary 2.0

Credible proxies

Individuals with sufficiently deep experience in engaging with affected stakeholders from a particular region or context (for example, women workers on farms, indigenous peoples or migrant workers) who can help to effectively convey their likely concerns. In practice, this can include development and human rights NGOs, international trade unions and local civil society, including faith-based organisations.

Source: ESRS S2 Workers in the value chain

Deadweight

A measure of the amount of outcome that would have happened even if the activity had not taken place. For example, there is often the chance the people could have experienced the same changes by working with another organisation, or even without the support from anyone.

Source: SVI Glossary 2.0

Decarbonisation levers

Aggregated types of mitigation actions such as energy efficiency, electrification, fuel switching, use of renewable energy, products change, and supply-chain decarbonisation that fit with undertakings’ specific actions.

Source: ESRS E1 Climate change

Deforestation

Temporary or permanent human-induced conversion of forested land to non-forested land. (Annex I point 21 of COMMISSION DELEGATED REGULATION (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088)

Source: ESRS E4 Biodiversity and ecosystems

Degradation

Degradation refers to chronic human impacts resulting in the loss of biodiversity and the disruption of an ecosystem’s structure, composition, and functionality.

Source: ESRS E4 Biodiversity and ecosystems

Dependencies

Dependency is the result of the undertaking relying on biodiversity and/or ecosystems within its business model and/or conduct of business. A prominent and scientifically well-established approach to assess, monitor and value biodiversity and ecosystem dependencies is by assessing the undertakings dependence on ecosystem services.

Source: ESRS E4 Biodiversity and ecosystems

Deposit

An amount of a substance that has accumulated in the environment, either in water or in soil, and either as a consequence of regular activities or from incidents or from disposals of undertakings, independent of whether that accumulation occurs at the production site of an undertaking or outside.

Source: ESRS E2 Pollution

Desertification

Desertification means land degradation in arid, semi-arid and dry sub-humid areas resulting from various factors, including climatic variations and human activities. Desertification does not refer to the natural expansion of existing deserts.

Source: ESRS E4 Biodiversity and ecosystems

Development

Those initiatives put in place by the undertaking aimed at personal and career advancement of its workers.

Source: ESRS S1 Own workforce

Direct GHG emissions

GHG emissions from sources owned or controlled by the undertaking.

Source: ESRS E1 Climate change

Discharge

1) Wastewater discharge means the amount of water (in m3) or substance (in kg BOD/d or comparable) added / leached to a water body from a point or a non-point source. (2) Sewage effluent (or discharge) means treated sewage discharged from a sewage treatment plant.

Source: ESRS E3 Water and marine resources

Discount rate

The interest rate used to discount future costs and benefits to a present value.

Source: SVI Glossary 2.0

Discounting

The process by which future financial costs and benefits are recalculated to present-day values.

Source: SVI Glossary 2.0

Discrimination

Discrimination can occur directly or indirectly – Direct discrimination will have occurred when an individual is treated less favourably by comparison to how others, who are in a similar situation, have been or would be treated, and the reason for this is a particular characteristic they hold, which falls under a ‘protected ground’. Indirect discrimination occurs when an apparently neutral rule disadvantages a person or a group sharing the same characteristics. It must be shown that a group is disadvantaged by a decision when compared to a comparator group.

Source: ESRS S1 Own workforce

Displacement

An assessment of how much of the outcome has displaced other outcomes. For example, if our activities prevent people experiencing the same changes somewhere else, we should take account of this.

Source: SVI Glossary 2.0

Distance travelled

This refers to the progress beneficiaries have made in terms of measured outcomes. This is a key measure to gauge how successful you have been in meeting your objectives.

Double materiality

Double materiality has two dimensions: impact materiality and financial materiality. A sustainability matter meets the criterion of double materiality if it is material from the impact perspective or the financial perspective or both.

Source: ESRS 1 General requirements

Durability

The ability of a product, component or material to remain functional and relevant when used as intended.

Source: ESRS E5 Resource use and circular economy

Ecological threshold (or breakpoint)

The point at which a relatively small change in external conditions causes a rapid change in an ecosystem. When an ecological threshold has been passed, the ecosystem may no longer be able to return to its state by means of its inherent resilience.

Source: ESRS E2 Pollution

Economic value

The importance people place on changes to the economy (production, distribution, and consumption of goods and services) for the purpose of optimising.

Source: SVI Glossary 2.0

Economics

Framework for accounting for Economic Value.

Source: SVI Glossary 2.0

Ecosystem(s)

A dynamic complex of plant, animal and micro-organism communities and their non-living environment interacting as a functional unit. A typology of ecosystems is provided by the IUCN Global Ecosystem Typology 2.0.

Source: ESRS E4 Biodiversity and ecosystems

Emission

The direct or indirect release of substances, vibrations, heat or noise from individual or diffuse sources […] into air, water or soil.

Source: ESRS E2 Pollution

Emission reduction

Emissions reduction: decrease in Scope 1, 2, 3 or total GHG emissions at the end of the reporting period, relative to baseline emissions. Emission reductions may result from, among others, energy efficiency, electrification, suppliers’ decarbonisation, electricity mix decarbonisation, sustainable products development or changes in reporting boundaries or activities (e.g. outsourcing, reduced capacities.), provided they are achieved within the undertaking’s own operation and value chain; removals and avoided emissions are not counted as emission reductions.

Source: ESRS E1 Climate change

Employee

An employee is an individual who is in an employment relationship with the undertaking according to national law or practice.

Source: ESRS S1 Own workforce

End-user

Individuals who ultimately use or are intended to ultimately use a particular product or service.

Source: ESRS S4 Consumers and end-users

Enterprise

An organisation that delivers activities.

Source: SVI Glossary 2.0

Environmental outcomes

Changes to the environment as a result of an activity.

Note: These changes may lead to Intermediate and Well-Defined Outcomes (for people) and so they might be managed in optimising Social Value. When included alongside social outcomes this turns a Social Value Account into an Account of Value.

Source: SVI Glossary 2.0

Environmental value

The importance people place on changes to the environment for the purpose of optimising.

Source: SVI Glossary 2.0

Equal opportunities

Equal opportunities refer to an equal and non-discriminatory access to, among individuals, of opportunities for education, training, employment, career development and the exercise of power without their being disadvantaged on the basis of criteria such as gender, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation.

Source: ESRS S1 Own workforce

Equal treatment

The principle of equal treatment is a general principle of European law which presupposes that comparable situations or parties in comparable situations are treated in the same way. There shall be no direct or indirect discrimination based on criteria such as gender, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation. In the context of the present standard, own workforce has the same rights to receive the same treatment and not to be discriminated either directly or indirectly against on the basis of protected grounds such as gender, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation.

Source: ESRS S1 Own workforce

ESG

The explicit and systematic inclusion of material environmental, social and governance (ESG) factors in investment analysis and investment decisions that are material to investment performance, i.e. with a view to lowering risk and/or generating (financial) returns.

Source: SVI Glossary 2.0

Evaluation

An account of social value for a time period elapsed.

Source: SVI Glossary 2.0

Financial accounting

Framework for accounting for Financial Value.

Source: SVI Glossary 2.0

Financial effects

A sustainability matter triggers financial effects on the undertaking when it generates risks or opportunities that have an influence (or are likely to have an influence) on the undertaking’s cash flows, performance, position, development, cost of capital or access to finance in the short, medium- and long-term time horizons.

Source: ESRS 1 General requirements

Financial materiality

A sustainability matter is material from a financial perspective if it triggers or may trigger material financial effects on the undertaking.

Source: ESRS 1 General requirements

Financial value

The importance people place on changes to finances for the purpose of optimising.

Source: SVI Glossary 2.0

Fiscal value

The importance people place on changes to public finances for the purpose of optimising.

Source: SVI Glossary 2.0

Forced labour

All work or service which is exacted from any person under the threat of penalty and for which the person has not offered himself or herself voluntarily. The term encompasses all situations in which persons are coerced by any means to perform work and includes both traditional ‘slave-like’ practices and contemporary forms of coercion where labour exploitation is involved, which may include human trafficking and modern slavery.

Source: ESRS S1 Own workforce

Forecast

An account of future social value.

Source: SVI Glossary 2.0

Fossil fuel

Fossil fuel means non-renewable carbon-based energy sources such as solid fuels, natural gas and oil.

Source: ESRS 2 General disclosures

Free, prior and informed consent

Free, prior and informed consent (FPIC) is a manifestation of indigenous peoples’ right to self-determine their political, social, economic and cultural priorities. It constitutes three interrelated and cumulative rights of indigenous peoples: the right to be consulted; the right to participate; and the right to their lands, territories and resources.

Source: ESRS S3 Affected communities

Freshwater

It includes surface water, including rainwater, water from wetlands, rivers and lakes. Water that is naturally occurring water on the Earth’s surface in ice sheets, ice caps, glaciers, icebergs, bogs, ponds, lakes, rivers and streams, and has a low concentration of dissolved solids. This surface water source includes water of a quality generally acceptable for, or requiring minimal treatment to be acceptable for, domestic, municipal or agricultural uses (at least <10,000 mg/l TDS, though a range of additional quality properties may also be considered). ‘High quality’ fresh water sources considered acceptable for potable use are typically characterised as having concentrations of dissolved solids less than 1,000 mg/l.

Source: ESRS E3 Water and marine resources

GHG removal and storage

(Anthropogenic) Removals refer to the withdrawal of GHGs from the atmosphere as a result of deliberate human activities. These include enhancing biological sinks of CO2 and using chemical engineering to achieve long-term removal and storage. Carbon capture and storage (CCS) from industrial and energy-related sources, which alone does not remove CO2 in the atmosphere, can reduce atmospheric CO2 if it is combined with bioenergy production (BECCS). Removals can be subject to reversals, which are any movement of stored GHG out of the intended storage that re-enters the surface and atmosphere. For example, if a forest that was grown to remove a specific amount of CO2 is subject to a wildfire, the emissions captured in the trees are reversed.

Source: ESRS E1 Climate change

Global warming potential (GWP)

Global warming potential (GWP) is a factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a given GHG relative to one unit of CO2.

Source: ESRS E1 Climate change

Governance

The system by which the undertaking is directed and controlled in the interests of shareholders and other stakeholders. Governance involves a set of relationships between the undertaking’s management, its board, its shareholders, and other stakeholders. Governance provides the structure and processes through which the objectives of the undertaking are set, progress against performance is monitored, and results are evaluated. The term ‘governance bodies’ refers to the administrative, management and supervisory bodies with the highest decision-making authority in the undertaking.

Source: ESRS 2 General disclosures

Greenhouse gases (GHG)

Greenhouse gases (GHG) are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, the atmosphere itself and by clouds. This property causes the greenhouse effect. Water vapour (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4) and ozone (O3) are the primary GHGs in the Earth’s atmosphere. Moreover, there are a number of entirely human-made GHGs in the atmosphere, such as the halocarbons and other chlorine- and bromine-containing substances, dealt with under the Montreal Protocol. Besides CO2, N2O and CH4, the Kyoto Protocol deals with the GHGs sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs).

Source: ESRS E1 Climate change

Grievance mechanisms

Grievance mechanisms refer to any routinized, state-based or non-state-based, judicial or non-judicial processes through which stakeholders can raise grievances and seek remedy. Examples of state-based judicial and non-judicial grievance mechanisms include courts, labour tribunals, national human rights institutions, National Contact Points under the OECD Guidelines for Multinational Enterprises, ombudsperson offices, consumer protection agencies, regulatory oversight bodies, and government-run complaints offices.

Non-state-based grievance mechanisms include those administered by the organisation, either alone or together with stakeholders, such as operational-level grievance mechanisms and collective bargaining, including the mechanisms established by collective bargaining. They also include mechanisms administered by industry associations, international organisations, civil society organisations, or multi-stakeholder groups.

Operational-level grievance mechanisms are administered by the organisation either alone or in collaboration with other parties and are directly accessible by the organisation’s stakeholders. They allow for grievances to be identified and addressed early and directly, thereby preventing both harm and grievances from escalating. They also provide important feedback on the effectiveness of the organisation’s due diligence from those who are directly affected. According to UN Guiding Principle 31, effective grievance mechanisms are legitimate, accessible, predictable, equitable, transparent, rights-compatible, and a source of continuous learning. In addition to these criteria, effective operational-level grievance mechanisms are also based on engagement and dialogue. It can be more difficult for the organisation to assess the effectiveness of grievance mechanisms that it participates in compared to those it has established itself.

Source: ESRS S1 Own workforce

Groundwater (renewable and non-renewable)

All water which is below the surface of the ground in the saturation zone and in direct contact with the ground or subsoil.

Source: ESRS E3 Water and marine resources

Habitat

The place or type of site where an organism or population naturally occurs. Also used to mean the environmental attributes required by a particular species or its ecological niche.

Source: ESRS E4 Biodiversity and ecosystems

Harassment

Harassment is defined as a course of comments or actions that are unwelcome or should reasonably be known to be unwelcome, to the person towards whom they are addressed. Harassment occurs when one or more employees are deliberately abused, threatened and/or humiliated in circumstances relating to work. Harassment may be carried out by one or more employees, with the purpose or effect of violating the employees’ dignity, affecting [their] health and/or creating a hostile work environment.

Source: ESRS S1 Own workforce

Hazardous / non-hazardous waste

Hazardous (non-hazardous) waste means waste which displays one or more of the hazardous properties listed in Annex III of the Waste framework directive.

Source: ESRS E5 Resource use and circular economy

Human capital

The knowledge, skills, competencies, and attributes embodied in individuals that contribute to improved performance and wellbeing.

Source: SVI Glossary 2.0

Human rights

Human rights are rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Human rights include the right to life and liberty, freedom from slavery and torture, freedom of opinion and expression, the right to work and education, and many more. Everyone is entitled to these rights, without discrimination.

Source: SVI Glossary 2.0

Impact drivers

All the factors that cause changes in nature, anthropogenic assets, nature’s contributions to people and a good quality of life. Direct drivers of change can be both natural and anthropogenic; they have direct physical (mechanical, chemical, noise, light etc.) and behaviour-affecting impacts on nature. They include, inter alia, climate change, pollution, different types of land use change, invasive alien species and zoonoses, and exploitation. Indirect impact drivers operate diffusely by altering and influencing direct drivers (by affecting their level, direction or rate) as well as other indirect drivers. Interactions between indirect and direct drivers create different chains of relationship, attribution, and impacts, which may vary according to type, intensity, duration, and distance. These relationships can also lead to different types of spill-over effects. Global indirect drivers include economic, demographic, governance, technological and cultural ones. Special attention is given, among indirect drivers, to the role of institutions (both formal and informal) and impacts of the patterns of production, supply and consumption on nature, nature’s contributions to people and good quality of life.

Source: ESRS E4 Biodiversity and ecosystems

Impact goals

The impacts that are intended.

Source: SVI Glossary 2.0

Impact management

A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- and long-term time horizons. A material sustainability matter from an impact perspective includes impacts caused or contributed to by the undertaking and impacts which are directly linked to the undertaking’s operations, products, and services through its business relationships.

Source: ESRS 1 General requirements

Impact risk

The likelihood that the results of the decision do not reflect the preferences of people affected. Risk should be used as a guide to determine an appropriate level of completeness and accuracy of data for decisions.

Source: SVI Glossary 2.0

Impact targets

The amount of impact an organisation is aiming to achieve.

Source: SVI Glossary 2.0

Impact thesis

A thesis or theory for how an organisation will achieve intended impacts.
Source: SVI Glossary 2.0

A method that explains how a given intervention, or set of interventions, is expected to lead to specific development change, drawing on a causal analysis based on available evidence.
Source: IMP

Impact value

The importance of the impact from the perspective of the people experiencing the outcome. This requires a valuation process that incorporates the impact (amount of change attributed to your activities) and duration.

Source: SVI Glossary 2.0

Impact(s)

The amount of change in an outcome attributed to an activity. This requires an estimation of how much change is contributed by others and/or would have happened anyway (counterfactual).

Source: SVI Glossary 2.0

Incident

A legal action or complaint registered with the undertaking or competent authorities through a formal process, or an instance of non-compliance identified by the undertaking through established procedures. Established procedures to identify instances of non-compliance can include management system audits, formal monitoring programs, or grievance mechanisms.

Source: ESRS S1 Own workforce

Indigenous peoples

Indigenous peoples are generally identified as (1) tribal peoples in independent countries whose social, cultural and economic conditions distinguish them from other sections of the national community, and whose status is regulated wholly or partially by their own customs or traditions or by special laws or regulations; (2) peoples in independent countries who are regarded as indigenous on account of their descent from the populations which inhabited the country, or a geographical region to which the country belongs, at the time of conquest or colonisation or the establishment of present state boundaries and who, irrespective of their legal status, retain some or all of their own social, economic, cultural and political institutions.

Source: ESRS S3 Affected communities

Indirect GHG emissions (Scope 2)

Indirect GHG emissions are a consequence of the operations of the undertaking but occur at sources owned or controlled by another company. Scope 2 GHG emissions are indirect emissions from the generation of purchased or acquired electricity, steam, heat, or cooling consumed by the undertaking.

Source: ESRS E1 Climate change

Indirect GHG emissions (Scope 3)

Indirect GHG emissions are a consequence of the operations of the undertaking but occur at sources owned or controlled by another company. Scope 3 GHG emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. Scope 3 GHG emissions are considered as estimated emissions in comparison with Scope 1 and 2 as their calculation is based on a combination of methods and primary and secondary data ranging from precise figures (supplier specific or sites-specific methods) to extrapolated figures (average-data or spend-based methods).

Source: ESRS E1 Climate change

Inorganic pollutants

Inorganic pollutants mean emissions within or lower than the emission levels associated with the best available techniques (BAT-AEL) as defined in Article 3, point (13) of Directive 2010/75/EU of the European Parliament and of the Council, for the Large Volume Inorganic Chemicals- Solids and Others industry.

Source: ESRS E2 Pollution

Inputs

The financial and non-financial resources required to deliver the activities. Inputs may be owned by the organization or by those it is dependent upon.

Source: SVI Glossary 2.0

Installation

A stationary technical unit within which one or more activities are carried out which could have an effect on emissions and pollution.

Source: ESRS E2 Pollution

Intermediate outcome(s)

Change(s) to aspects of wellbeing, needed for management decisions about achieving the well-defined outcome(s).

Source: SVI Glossary 2.0

Internal carbon price

Internal carbon price is a price used by entities to assess the financial implications of changes to investment, production, and consumption patterns, as well as potential technological progress and future emissions abatement costs.

Source: ESRS E2 Pollution

Internal carbon pricing scheme

An organisational arrangement that allows an undertaking to apply carbon prices in strategic and operational decision making. There are two types of internal carbon prices commonly used by undertakings. The first type is a shadow price, which is a theoretical cost or notional amount that the undertaking does not charge but that can be used in assessing the economic implications or trade-offs for such things as risk impacts, new investments, net present value of projects, and the cost-benefit of various initiatives. The second type is an internal tax or fee, which is a carbon price charged to a business activity, product line, or other business unit based on its GHG emissions (these internal taxes or fees are similar to intracompany transfer pricing).

Source: ESRS E2 Pollution

Invasive or alien species

action outside their natural distribution threatens biological diversity, food security, and human health and well-being. “Alien’ refers to the species’ having been introduced outside its natural distribution (“exotic’, “non-native’ and “non-indigenous’ are synonyms for “alien’). “Invasive’ means “tending to expand into and modify ecosystems to which it has been introduced’. Thus, a species may be alien without being invasive, or, in the case of a species native to a region, it may increase and become invasive, without actually being an alien species.

Source: ESRS E4 Biodiversity and ecosystems

Key biodiversity area

Sites contributing significantly to the global persistence of biodiversity’, in terrestrial, freshwater and marine ecosystems. Sites qualify as global KBAs if they meet one or more of 11 criteria, clustered into five categories: threatened biodiversity; geographically restricted biodiversity; ecological integrity; biological processes; and, irreplaceability. The World Database of Key Biodiversity Areas is managed by BirdLife International on behalf of the KBA Partnership.

Source: ESRS E4 Biodiversity and ecosystems

Key performance indicator (KPI)

A key performance indicator (KPI) is a measurable value that shows how well you are meeting your key goals. Most organisations will have a suite of indicators and sub-indicators that capture the complexity of managing outcomes.

Land degradation

Refers to the many processes that drive the decline or loss in biodiversity, ecosystem functions or their benefits to people and includes the degradation of all terrestrial ecosystems.

Source: ESRS E4 Biodiversity and ecosystems

Landfill

A waste disposal site for the deposit of the waste onto or into land.

Source: ESRS E5 Resource use and circular economy

Legitimate representatives

Individuals recognised as such under law or practice, such as elected trade union representatives in the case of workers, or other similarly freely chosen representatives of affected stakeholders.

Source: ESRS S2 Workers in the value chain

LM3

This is a measure of local impact that includes. It creates a score that shows how much spend by organisations remains in the locality. Local spend is increasingly a key element in public sector procurement.

Lobbying activities

Refers to activities carried out with the objective of influencing the formulation or implementation of policy or legislation, or the decision-making processes of governments, governmental institutions, regulators, European Union institutions, bodies, offices and agencies or standard setters. Such activities include (non-exhaustive list):

• organising or participating in meetings, conferences, events.

• contributing to/participating in public consultations, hearings or other similar initiatives.

• organising communication campaigns, platforms, networks, grassroots initiatives.

• preparing/commissioning policy and position papers, opinion polls, surveys, open letters, research work as per the activities covered by transparency register rules.

Source: ESRS G1 Business conduct

Locked-in GHG emissions

Locked-in emissions are estimates of future GHG emissions that are likely to be caused by an undertaking’s key assets or products sold within their operating lifetime.

Source: ESRS E1 Climate change

Longevity

Designed for maintenance and durability in such a way that encourages longer use than the industry standard in practice and at scale and in such a way that does not compromise circular treatment at the end of functional life.

Source: ESRS E5 Resource use and circular economy

Marine resources

Ocean-based resources, discharges and emissions to the environment which end up in the oceans, or activities located in maritime (naval matters) areas.

Source: ESRS E3 Water and marine resources

Materiality

Information is material if its omission has the potential to affect the readers’ decisions. For the purpose of optimising social value, material information is all relevant and significant impacts on wellbeing. Relevance is determined by the organisation’s policy, needs of people affected, existing social norms and financial consequences. Significance is determined by outcome depth, scale, value and causality.

Source: SVI Glossary 2.0

Metrics

Qualitative and quantitative indicators that the undertaking uses to measure and report on the effectiveness of the delivery of its sustainability-related policies and against its targets over time. Metrics also support the measurement of the undertaking’s results in respect of affected people, the environment and the undertaking.
(Source: ESRS E4) Metrics, instruments or tools that capture changes in an Outcome to determine Outcome Depth. (Source: SVI Glossary 2.0)

Mitigation hierarchy

The mitigation hierarchy comprises:

a. Avoidance: measures taken to avoid creating impacts from the outset, such as careful spatial or temporal placement of elements of infrastructure, in order to completely avoid impacts on certain components of biodiversity. This results in a change to a “business as usual” approach.

b. Minimisation: measures taken to reduce the duration, intensity and / or extent of impacts that cannot be completely avoided, as far as is practically feasible.

c. Rehabilitation / restoration: measures taken to rehabilitate degraded ecosystems or restore cleared ecosystems following exposure to impacts that cannot be completely avoided and / or minimised.

d. Compensation or Offset: measures taken to compensate for any residual significant, adverse impacts that cannot be avoided, minimised and / or rehabilitated or restored. Measures to achieve No Net Loss or a Net Gain of biodiversity for at least as long as the project’s impacts are biodiversity offsets. Offsets can take the form of positive management interventions such as restoration of degraded habitat, arrested degradation or averted risk, where there is imminent or projected loss of biodiversity. Measures that address residual impacts but are not quantified to achieve No Net Loss or not secured for the long term are compensation, otherwise known as compensatory mitigation.

Source: ESRS E4 Biodiversity and ecosystems

Monetary valuation

A monetary representation of the value of an outcome.

Source: SVI Glossary 2.0

Natural capital

The stock of renewable and non-renewable natural resources that combine to yield a flow of benefits to people.

Source: SVI Glossary 2.0

Natural resources

Natural assets (raw materials) occurring in nature that can be used for economic production or consumption.

Source: ESRS E4 Biodiversity and ecosystems

Nature-based solutions

Nature-based solutions are understood as actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal and marine ecosystems which address social, economic and environmental challenges effectively and adaptively, while simultaneously providing human well-being, ecosystem services, resilience and biodiversity benefits.

Source: ESRS E1 Climate change

Net present value

The value in today’s currency of money that is expected in the future minus the investment required to generate the activity.

Source: SVI Glossary 2.0

Net social return ratio

Net present value of the impact divided by total investment.

Source: SVI Glossary 2.0

Net-zero target

Setting a net-zero target at the level of an undertaking aligned with meeting societal climate goals means (1) achieving a scale of value chain emissions reductions consistent with the depth of abatement at the point of reaching global net-zero in 1.5˚C pathways, and (2) neutralizing the impact of any residual emissions (after approximately 90-95% of GHG emission reduction) by permanently removing an equivalent volume of CO2.

Source: ESRS E1 Climate change

Non-employee workers in own workforce

Non-employee workers in an undertaking’s own workforce include both individual contractors supplying labour to the undertaking (“self-employed workers”) and workers provided by undertakings primarily engaged in “employment activities” (NACE Code N78).

Source: ESRS S1 Own workforce

Non-renewable energy

Non-renewable energy is energy which cannot be identified as being derived from renewable sources. (adapted from Annex 1 of the Delegated Regulation with regard to disclosure rules on sustainable investments pursuant to Art. 8(4), 9(6) and 11(5) of Regulation (EU) 2019/2088) Fossil fuels such as oil, natural gas, and coal are examples of non-renewable resources.

Source: ESRS E1 Climate change

Non-renewable material

Resources that are not able to be renewed or replenished on timescales relevant to the economy, i.e., not geological timescales, such as minerals, metals, oil, gas or coal.

Source: ESRS E5 Resource use and circular economy

Objective aspects of wellbeing

Physical things that can be observed e.g. actions, behaviours, skills and circumstances e.g. economic income.

Source: SVI Glossary 2.0

Operational decisions

Decisions about how to improve the existing products or services to optimise impacts on wellbeing.

Source: SVI Glossary 2.0

Optimising

Decision making that recognises positive and negative changes in social value and balances trade-offs between groups in order to achieve the highest possible amount of social value for all people affected.

Source: SVI Glossary 2.0

Organisational outcomes

Changes to the resources, capacity or circumstances of an organisation.

Note: These changes may lead to intermediate and well-defined outcomes for people and so they might be managed in optimising social value. By themselves they are part of financial or sustainability accounting rather than social value.

Source: SVI Glossary 2.0

Organisational value

The importance the organisation places on changes to an organisation’s ability to pursue its stated purpose (including Enterprise Value) for the purpose of optimising.

Source: SVI Glossary 2.0

Outcome depth

The amount of change in an outcome experienced by people affected between two points in time. An indicator is required to measure two different outcome levels. E.g. self-esteem at t1 and self-esteem at t2.

Source: SVI Glossary 2.0

Outcome drop off

The rate of decline in the outcome depth over time. The rate is expressed as a percentage in relation to the outcome duration.

Source: SVI Glossary 2.0

Outcome duration

The length of time that a person affected continually experiences the outcome depth.

Source: SVI Glossary 2.0

Outcome level(s)

A level of an outcome (aspect of wellbeing) at a certain point in time. For example, an amount of self-esteem.

Source: SVI Glossary 2.0

Outcome results

Comparing the outcome depth against outcome thresholds and targets to determine a positive or negative performance. Note: a positive change in an outcome (between two outcome levels) may not meet an outcome threshold or an outcome target and therefore would not be considered a positive performance.

Source: SVI Glossary 2.0

Outcome scale

The number of people that experience an outcome.

Source: SVI Glossary 2.0

Outcome target

Pre-determined outcome level.

Source: SVI Glossary 2.0

Outcome threshold

The minimum depth of change judged adequate to be material, between two points in time. Outcome thresholds = pre-determined outcome levels that are required by a specific point in time for the outcome depth to be considered positive or negative performance.

Source: SVI Glossary 2.0

Outcome value

The importance of the outcome from the perspective of the people experiencing the outcome. This requires a valuation process that incorporates the outcome depth and duration.

Source: SVI Glossary 2.0

Outcome(s)

Change(s) people experience as a result of an activity.

Source: SVI Glossary 2.0

Outputs

The summary of activities in numbers.

Source: SVI Glossary 2.0

Overclaiming

In social value reporting it is very easy to overstate the impact you are making. Being prudent is the watchword. Sticking to rigorous data capture and evaluation methodologies makes your claims more defensible and more powerful.

Overtime

Overtime hours are the number of hours actually worked by a worker in excess of his or her contractual hours of work.

Source: ESRS S1 Own workforce

Own workforce

‘Own workforce’ includes workers who are in an employment relationship with the undertaking (‘employees’) and non- employee workers who are either individual contractors supplying labour to the undertaking (‘self-employed workers’) or workers provided by undertakings primarily engaged in ‘employment activities’. (NACE Code N78)

Source: ESRS S1 Own workforce

Ozone-depleting substances

Substances listed in the Montreal Protocol on substances that deplete the ozone layer.

Source: ESRS E2 Pollution

Packaging

Products made of any materials of any nature to be used for the containment, protection, handling, delivery, [storage, transport] and presentation of goods, from raw materials to processed goods, from the producer to the user or consumer.

Source: ESRS E5 Resource use and circular economy

Pay

Gross hourly earnings, which are the wages and salaries earned by full-time and part-time employees, per hour paid, before any tax and social security contributions are deducted. Wages and salaries include any overtime pay, shift premiums, allowances, bonuses, and commissions.

Source: ESRS S1 Own workforce

Persons with disabilities

Persons with disabilities include those who have long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others. Disability is the umbrella term for impairments, activity limitations and participation restrictions, referring to the negative aspects of the interaction between an individual (with a health condition) and that individual’s contextual factors (environmental and personal factors).

Source: ESRS S1 Own workforce

Physical risks

All global economic enterprise depends on the functioning of earth systems, such as a stable climate and ecosystem services, such as the provision of biomass (raw materials). Nature-related physical risks are a direct result of an organisation’s dependence on nature. Physical risks arise when natural systems are compromised, due to the impact of climatic events (e.g., extremes of weather such as a drought), geologic events (e.g., seismic events such as an earthquake) events or changes in ecosystem equilibria, such as soil quality or marine ecology, which affect the ecosystem services organisations depend on. These can be acute, chronic, or both. Nature-related physical risks arise as a result of changes in the biotic (living) and abiotic (non-living) conditions that support healthy, functioning ecosystems. Physical risks are usually location specific. Nature-related physical risks are often associated with climate-related physical risks.

Source: ESRS E4 Biodiversity and ecosystems

Planetary boundaries

This concept allows to estimate a safe operating space for humanity with respect to the functioning of the Earth. The boundary level for each key Earth System process that should not be transgressed if we are to avoid unacceptable global environmental change, is quantified.

Source: ESRS E4 Biodiversity and ecosystems

Policy

A policy is a set or framework of general objectives and management principles that the undertaking uses for decision- making. A policy implements the undertaking’s strategy or management decisions related to a material sustainability matter. Each policy is under the responsibility of defined person(s), specifies its perimeter of application, and includes one or more objectives (linked when applicable to measurable targets). A policy is validated and reviewed following the undertakings’ applicable governance rules. A policy is implemented through actions or action plans.

Source: ESRS 1 General requirements

Pollutant

A substance, vibration, heat, noise, light or other contaminant present in air, water or soil which may be harmful to human health and/or the environment, which may result in damage to material property, or which may impair or interfere with amenities and other legitimate uses of the environment.

Source: ESRS E2 Pollution

Pollution

The direct or indirect introduction, as a result of human activity, of pollutants into air, water or soil which may be harmful to human health and/or the environment, which may result in damage to material property, or which may impair or interfere with amenities and other legitimate uses of the environment.

Source: ESRS E2 Pollution

Potential financial effects

Potential financial effects are the effects on an undertaking’s future position, performance and cash flow arising from material sustainability matters whereby the reporting of such effects falls outside the scope of existing accounting requirements.

Source: ESRS E1 Climate change

Produced capital

The human-made goods and financial assets that are used to produce goods and services consumed by society.

Source: SVI Glossary 2.0

Protected area

A protected area is a clearly defined geographical space, recognised, dedicated and managed, through legal or other effective means, to achieve the long-term conservation of nature with associated ecosystem services and cultural values.

Source: ESRS E4 Biodiversity and ecosystems

Proxy

Sometimes measuring an impact directly is impossible. Proxies are measurable values that are aligned to true values but can only provide a partial or approximate value.

Purchased or acquired energy

When the undertaking has received its energy from a third party. The term “acquired” reflects circumstances where a company may not directly purchase electricity (e.g., a tenant in a building), but where the energy is brought into the undertaking’s facility for use.

Source: ESRS E1 Climate change

Ranking

Putting outcomes or impacts in order of importance from lowest to highest, from the perspective of the people experiencing the changes. Ranking can be considered a form of equal weighting.

Source: SVI Glossary 2.0

Raw material

Primary or secondary material that is used to produce a product.

Source: ESRS E4 Biodiversity and ecosystems

Recognised quality standards for carbon credits

Recognised quality standards for carbon credits are those that are verifiable by independent third parties, make requirements and project reports publicly available and at a minimum ensure additionality, permanence, avoidance of double counting and provide rules for calculation, monitoring, and verification of the project’s GHG emissions.

Source: ESRS E1 Climate change

Recordable work-related injury or ill health

Work-related injury or ill health that results in any of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness; or significant injury or ill health diagnosed by a physician or other licensed healthcare professional, even if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness.

Source: ESRS S1 Own workforce

Recovery

Any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy.

Source: ESRS E5 Resource use and circular economy

Recycled water

Water and wastewater (treated or untreated) that has been used more than once before being discharged from the undertaking’s boundary, so that water demand is reduced. This may be in the same process (recycled), or in a different process within the same facility or another of the undertaking’s facilities (reused).

Source: ESRS E3 Water and marine resources

Recycling

Any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does not include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations.

Source: ESRS E5 Resource use and circular economy

Regeneration

Promotion of self-renewal capacity of natural systems with the aim of reactivating ecological processes damaged or over- exploited by human action Promotion of self-renewal capacity of natural systems with the aim of reactivating ecological processes damaged or over-exploited by human action.

Source: ESRS E5 Resource use and circular economy

Regenerative production

Regenerative production is an approach to managing agroecosystems that provides food and material — be it through agriculture, aquaculture or forestry — in ways that create positive outcomes for nature. These outcomes include, but are not limited to, healthy soils, improved air and water quality, and higher levels of carbon sequestration. They can be achieved through a variety of context-dependent practices and can together help regenerate degraded ecosystems and build resilience on farms and in surrounding landscapes.

Source: ESRS E5 Resource use and circular economy

Remedy

Means to counteract or make good a negative impact or provision of remedy. Examples: apologies, financial or non- financial compensation, prevention of harm through injunctions or guarantees of non-repetition, punitive sanctions (whether criminal or administrative, such as fines), restitution, restoration, rehabilitation.

Source: ESRS S1 Own workforce

Renewable energy

Renewable energy is energy taken from sources that are inexhaustible. As such, renewable energy covers wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas. (Art. 2 (1) Directive (EU) 2018/2001)

Source: ESRS E1 Climate change

Renewable materials

Material that is derived from resources that are quickly replenished by ecological cycles or agricultural processes, so that the services provided by these, and other linked resources are not endangered and remain available for the next generation.

Source: ESRS E5 Resource use and circular economy

Resource inflows

Resource that enters the organisation’s infrastructure.

Source: ESRS E5 Resource use and circular economy

Resource outflows

Resource that leaves the organisation’s infrastructure.

Source: ESRS E5 Resource use and circular economy

Resource use optimisation

The design, production and distribution of materials and products with the objective to keep them in use at their highest value. Eco-design and design for longevity, repair, reuse, repurposing, disassembly, remanufacturing are examples of tools to prevent from a quick and limited use of materials and products.

Source: ESRS E5 Resource use and circular economy

Reuse

Any operation by which products and components that are not waste are used again for the same purpose for which they were conceived. This may involve cleaning or small adjustments, so it is ready for the next use without significant definition.

Source: ESRS E5 Resource use and circular economy

Revealed preference

Approach to valuation that examines the way in which people reveal their preferences for goods or services through market production and consumption, and the prices that are therefore given to these goods (explicitly or implicitly). In order to value changes to outcomes for people, we can compare these to goods or services that could provide a similar change (substitute prices).

Source: SVI Glossary 2.0

Rigour

Rigour in social value accounting has two aspects – Completeness and Accuracy. The appropriate level of these for any Social Value Account is determined primarily by Risk to the people affected of decisions taken based on less complete or accurate information.

Source: SVI Glossary 2.0

Scenario

A plausible description of how the future may develop based on a coherent and internally consistent set of assumptions about key driving forces (e.g., rate of technological change, prices) and relationships. Note that scenarios are neither predictions nor forecasts but are used to provide a view of the implications of developments and actions.

Source: ESRS E1 Climate change

Scenario analysis

Scenario analysis is a process for identifying and assessing a potential range of outcomes of future events under conditions of uncertainty.

Source: ESRS E1 Climate change

Scope

The activities, timescale, boundaries and type of account or analysis.

Source: SVI Glossary 2.0

Scope 3 category

Scope 3 category is one of the 15 types of Scope 3 emissions identified by the GHG Protocol Corporate Standard and detailed by the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (adapted from GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Glossary (Version 2011)) Undertakings that choose to account for their Scope 3 emissions based on the indirect GHG emissions categories of ISO 14064-1:2018 may also refer to the category defined in clause 5.2.4 (excluding indirect GHG emissions from imported energy) of ISO 14064-1:2018.

Source: ESRS E1 Climate change

Segmentation

A sub-group of people affected based on profile characteristics and/or materially different impact experienced.

Source: SVI Glossary 2.0

Sensitivity analysis

Process by which the sensitivity of an SROI model to changes in different variables is assessed.

Source: SVI Glossary 2.0

Severity of a negative impact

The severity of a negative impact is determined by its (i) scale: how grave the impact is, (ii) scope: how widespread the impact is, and (iii) its irremediable character: how hard it is to counteract or make good the resulting harm.

Source: ESRS 1 General requirements

Site

Means a single location, in which, if there is more than one manufacturer of (a) substance(s), certain infrastructure and facilities are shared.

Source: ESRS E2 Pollution

Social capital

The networks together with shared norms, values and understanding that facilitate cooperation within and among groups.

Source: SVI Glossary 2.0

Social dialogue

All types of negotiation, consultation or simply exchange of information between, or among, representatives of governments, employers, their organisations and workers’ representatives, on issues of common interest relating to economic and social policy. It can exist as a tripartite process, with the government as an official party to the dialogue or it may consist of bipartite relations only between workers’ representatives and management (or trade unions and employers’ organisations).

Source: ESRS S1 Own workforce

Social protection

Social protection is defined as the set of measures designed to reduce and prevent poverty and vulnerability across the life cycle.

Source: ESRS S1 Own workforce

Social return on investment (SROI)

Framework for accounting for value relative to investment.

Source: SVI Glossary 2.0

Social return ratio

Total present value of the impact divided by total investment.

Source: SVI Glossary 2.0

Social value

The importance people place on different aspects of their wellbeing and the changes they experience (in these aspects of wellbeing).

Source: SVI Glossary 2.0

Social value accounting process

Actions undertaken and judgements made to complete social value accounts.

Social value accounts

Data, analysis, assessment and models developed for impact management.

Source: SVI Glossary 2.0

Social Value Act

The Public Services (Social Value) Act, which came into force in 2013, requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits.

Social value disclosures

Social value report published externally for transparency and accountability to all people affected.

Source: SVI Glossary 2.0

Social value report

Presentation of SV Accounts and SV Accounting Process including explanatory notes and analysis of risk for the different audiences and decisions, e.g. Disclosure or Impact Management.

Source: SVI Glossary 2.0

Soil

The top layer of the Earth’s crust situated between the bedrock and the surface. The soil is composed of mineral particles, organic matter, water, air and living organisms.

Source: ESRS E2 Pollution

Soil degradation

‘Soil degradation’ means the diminishing capacity of the soil to provide ecosystem goods and services as desired by its stakeholders, according to IPBES as referred to in paragraph 100 of Decision No 1386/2013/EU.

Source: ESRS E4 Biodiversity and ecosystems

Soil sealing

A “sealed area” means any area where the original soil has been covered (such as roads) making it impermeable. This non-permeability can create environmental impacts as described in Annex IV EMAS Regulation – EU 2018/2026.

Source: ESRS E4 Biodiversity and ecosystems

SROI analysis

Social value accounting.

Source: SVI Glossary 2.0

Stakeholder engagement

An ongoing process of interaction and dialogue between the undertaking and its stakeholders that enables the undertaking to hear, understand and respond to their interests and concerns.

Source: ESRS S2 Workers in the value chain

Stakeholder(s)

Stakeholders are those who can affect or be affected by the undertaking. There are two main groups of stakeholders:

a) affected stakeholders: individuals or groups whose interests are affected or could be affected – positively or negatively – by the undertaking’s activities and its direct and indirect business relationships across its value chain; and

b) users of sustainability statements: primary users of general- purpose financial reporting (existing and potential investors, lenders and other creditors including asset managers, credit institutions, insurance undertakings), as well as other users, including the undertaking’s business partners, trade unions and social partners, civil society and non-governmental organisations, governments, analysts and academics.

Some, but not all, stakeholders may belong to the two groups.

Source: ESRS 1 General requirements

Standard / Standardisation

Rules or guidelines for common and repeated use to which organisations demonstrate adherence with which compliance is not necessarily mandatory in law. Standards are created through a process of multi-stakeholder consultation.

Stated preference

Approach to valuation that asks people to “state their preference” for a good service, often using questionnaires. For example, contingent valuation surveys ask respondents directly for the equivalent value through their willingness to pay (WTP) for a positive good or service, or their willingness to accept (WTA) a compensating value for its loss or a negative change to outcomes.

Source: SVI Glossary 2.0

Strategic decisions

Decisions made to identify what an organisation is aiming to achieve that set impact goals, targets, and thresholds for all materially affected (or potentially affected) groups of people.

Source: SVI Glossary 2.0

Strategy

The undertaking’s plan to achieve its mission and vision and apply its core values. It incorporates the set of goals or purposes the undertaking assigns itself in terms of delivering certain defined products and services to defined categories of customers in certain defined geographic areas under a defined framework of relationships with all stakeholders.

Source: ESRS 2 General disclosures

Subjective aspects of wellbeing

Psychological states, feelings, attitudes and beliefs.

Source: SVI Glossary 2.0

Substances of concern

Substances of concern means a substance that:

a)  meets the criteria laid down in Article 57 and is identified in accordance with Article 59(1) of Regulation (EC) No 1907/2006;

b)  is classified in Part 3 of Annex VI to Regulation (EC) in one of the following hazard classes or hazard categories:
– No 1272/2008 – carcinogenicity categories 1 and 2,
– germ cell mutagenicity categories 1 and 2,
– reproductive toxicity categories 1 and 2, [to be added in the course of the legislative procedure once Regulation (EC) No 1272/2008 contains these hazard classes: Persistent, Bio cumulative, Toxic (PBTs), very Persistent very Bio accumulative (vPvBs); Persistent, Mobile and Toxic (PMT), very Persistent very Mobile (p.m.); Endocrine disruption],
– respiratory sensitisation category 1,
– skin sensitisation category 1,
– chronic hazard to the aquatic environment categories 1 to 4,
– hazardous to the ozone layer,
– specific target organ toxicity
– repeated exposure categories 1 and 2,
– specific target organ toxicity – single exposure categories 1 and 2; or

c)  any other substance that are set out in applicable EU legislation.

Source: ESRS E2 Pollution

Substances of very high concern (SVHCs)

Entity upstream from the organisation (i.e., in the organisation’s supply chain), which provides a product or service that is used in the development of the organisation’s own products or services. A supplier can have a direct business relationship with the organisation (often referred to as a first-tier supplier) or an indirect business relationship.

Source: ESRS S2 Workers in the value chain

Supplier

Entity upstream from the organisation (i.e., in the organisation’s supply chain), which provides a product or service that is used in the development of the organisation’s own products or services. A supplier can have a direct business relationship with the organisation (often referred to as a first-tier supplier) or an indirect business relationship.

Source: ESRS S2 Workers in the value chain

Supply chain

The full range of activities or processes carried out by entities upstream from the undertaking, which provide products or services that are used in the development of the undertaking’s own products or services. This includes upstream entities with which the undertaking has a direct relationship (often referred to as a first-tier supplier) or an indirect business relationship.

Source: ESRS 1 General requirements

Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their needs or overshooting Earth’s ecological limits (Brundtland Commission).

In context of impact measurement, outcomes for people are sustainable if they are within the acceptable range determined by societal thresholds, and outcomes for the natural environment are sustainable if they are within the acceptable range determined by ecological thresholds (Science-Based Targets Initiative and Kate Raworth). Sustainability is the quality of being able to continue over a period of time (Cambridge English Dictionary).

Source: IMP

Sustainability accounting

Framework for accounting for environmental value.

Source: SVI Glossary 2.0

Sustainability matters

Sustainability matters’ means environmental, social and human rights, and governance factors, including sustainability factors defined in point (24) of Article 2 of Regulation (EU) 2019/2088.

Source: ESRS 1 General requirements

Sustainability statements

The dedicated section of the undertaking’s management report where the information about sustainability matters prepared in compliance with the CSRD and the [draft] ESRS is presented.

Source: ESRS 1 General requirements

Sustainability-related financial opportunities (or ‘opportunities’)

Sustainability-related financial opportunities are uncertain environmental, social or governance events or conditions that, if they occur, could cause a potential material positive effect on the undertaking’s business model, strategy, its capability to achieve its goals and targets and to create value, and therefore may influence its decisions and those of its business relationship partners with regards to sustainability matters. Like any other opportunity, sustainability-related opportunities are measured as a combination of an impact’s magnitude and the probability of occurrence.

Source: ESRS 2 General disclosures

Sustainability-related financial risks (or ‘risks’)

Sustainability-related financial risks are uncertain environmental, social or governance events or conditions that, if they occur, could cause a potential material negative effect on the undertaking’s business model, strategy and sustainability strategy, its capability to achieve its goals and targets and to create value, and therefore may influence its decisions and those of its business relationships with regard to sustainability matters. Like any other risks, sustainability- related risks are the combination of an impact’s magnitude and the probability of occurrence.

Source: ESRS 2 General disclosures

Sustainability-related impacts

The effect the undertaking has or could have on the environment and people, including effects on their human rights, as a result of the undertaking’s activities or business relationships. The impacts can be actual or potential, negative or positive, short-term or long-term time horizons, intended or unintended, and reversible or irreversible. Impacts indicate the undertaking’s contribution, negative or positive, to sustainable development.

Source: ESRS 2 General disclosures

Sustainable development

Meeting the social, environmental and economic needs of the present without compromising the ability of future generations
to meet their needs.

Source: SVI Glossary 2.0

Sustainable Development Goals (SDGs)

The 17 interconnected global goals devised by the UN that recognise that “ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.”

Systemic risks

Risks arising from the breakdown of the entire system, rather than the failure of individual parts. They are characterised by modest tipping points combining indirectly to produce large failures with cascading of interactions of physical and transition risks (contagion), as one loss triggers a chain of others, and with systems unable to recover equilibrium after a shock. An example is the loss of a keystone species, such as sea otters, which have a critical role in ecosystem community structure. When sea otters were hunted to near extinction in the 1900s, the coastal ecosystems flipped, and biomass production was greatly reduced.

Source: ESRS E4 Biodiversity and ecosystems

Tactical decisions

Decisions about different options (activities) that could be deployed to optimise impacts on wellbeing for all materially affected people. This requires organisations to identify, appraise and select alternative activities as options for achieving their impact targets.

Source: SVI Glossary 2.0

Targets

Targets are measurable, outcome-oriented goals that the undertaking aims to achieve in relation to material impacts, risks or opportunities.

Source: ESRS 1 General requirements

Theory of change

A method that explains how a given intervention, or set of interventions, is expected to lead to specific development change, drawing on a causal analysis based on available evidence.

Source: IMP

Threatened species

Threatened species means endangered species, including flora and fauna, listed in the European Red List or the IUCN Red List, as referred to in Section 7 of Annex II to Delegated Regulation (EU) 2021/2139.

Source: ESRS E4 Biodiversity and ecosystems

Time period

The time period for the account of social value.

Source: SVI Glossary 2.0

Total impact value

The sum of all outcome values minus the counterfactual. Or the sum of all the impact values if the valuation process captured only the value of the impacts.

Source: SVI Glossary 2.0

Total value

The sum of all outcome values in a social value account.

Source: SVI Glossary 2.0

Training

For the aim of this Standard, training is defined as those initiatives put in place by the undertaking aimed at the maintenance and/or improvement of skills and knowledge of its own workers. It can include different methodologies, such as on-site training, and online training.

Source: ESRS S1 Own workforce

Transition plan

A transition plan is a specific type of action plan that is adopted by the undertaking in relation to a strategic decision and that addresses:
(a) a public policy objective; and/ or (b) an entity-specific action plan organised as a structured set of targets and actions, associated with a key strategic decision, a major change in business model, and/or particularly important actions and allocated resources.

Source: ESRS 1 General requirements

Transition risks

Nature-related transition risks are risks that result from a misalignment between an organisation’s or investor’s strategy and management and the changing regulatory, policy or societal landscape in which it operates. Developments aimed at halting or reversing damage to nature, such as government measures, technological breakthroughs, market changes, litigation and changing consumer preferences can all create or change transition risks.

Source: ESRS E4 Biodiversity and ecosystems

Triple bottom line

An analogy to the traditional bottom line of financial reporting, it is a reporting and accounting framework that takes into account the impact of financial, social and environmental factors to evaluate organisation performance. It is often a key component of CSR reporting.

Valuation

An approach, process or methodology that assesses relative importance of outcomes to people affected. Valuations can be monetary or non-monetary.

Source: SVI Glossary 2.0

Valuation is the anthropocentric process of estimating the relative importance, worth, or usefulness of natural, social, human, and/or produced capitals directly or indirectly experienced by people (or by a business) in a particular context. Valuation may involve using qualitative, quantitative, or monetary approaches or a combination of these.

  • Qualitative valuation describes the relative importance of the impacts and/or dependencies on natural, social, human, or produced capital and may rank them into categories such as high, medium, or low.
  • Quantitative valuation uses non-monetary units such as numbers (e.g., in a composite index), areas, mass, or volume to assess the relative importance of impacts and/or dependencies on natural, social, human, or produced capital.
  • Monetary valuation uses money (e.g. $) as the common unit to assess value.

Source: Value Commission

Value

The importance, worth, or usefulness of something.

Source: SVI Glossary 2.0

Value is defined as the importance, worth, or usefulness of something. While in financial accounting terms, valuation is understood to mean monetization, value can come in various forms, many of which are intangible. This value can have economic, social, environmental, cultural, or spiritual aspects and can be expressed in qualitative, quantitative, or monetary terms.

Source: Value Commission

Value chain

Value chain is the full range of activities, resources and relationships related to the undertaking’s business model(s) and the external environment in which it operates. A value chain encompasses the activities, resources and relationships the undertaking uses and relies on to create its products or services from conception to delivery, consumption and end-of- life. Relevant activities, resources and relationships include:

a) those in the undertaking’s operations, such as human resource;

b) those along its supply, marketing and distribution channels, such as materials and service sourcing and product and service sale and delivery; and

c) the financing, geographical, geopolitical and regulatory environments in which the undertaking operates. Value chain includes entities (or actors) upstream and downstream from the undertaking. Entities upstream from the undertaking (e.g., suppliers) provide products or services that are used in the development of the undertaking’s products or services. Entities downstream from the undertaking (e.g., distributors, customers) receive products or services from the undertaking.

Source: ESRS 1 General requirements

Value factor

A numerical representation of the relative importance of something.

Source: SVI Glossary 2.0

Verification

A process to confirm the accuracy and completeness of social value claims that are in line with the impact management decisions being supported.

Source: SVI Glossary 2.0

Wage

Gross wage, excluding variable components such as overtime and incentive pay, and excluding allowances unless they are guaranteed.

Source: ESRS S1 Own workforce

Waste

Any substance or object which the holder discards or intends or is required to discard.

Source: ESRS E5 Resource use and circular economy

Waste hierarchy

The waste hierarchy is the following priority order in waste prevention and management: (a) prevention; (b) preparing for re-use; (c) recycling; (d) other recovery, e.g., energy recovery; and (e) disposal.

Source: ESRS E5 Resource use and circular economy

Waste management

The collection, transport, recovery and disposal of waste, including the supervision of such operations and the aftercare of disposal sites, and including actions taken as a dealer or broker.

Source: ESRS E5 Resource use and circular economy

Wastewater

Water which is of no further immediate value to the purpose for which it was used or in the pursuit of which it was produced because of its quality, quantity, or time of occurrence. Wastewater from one user can be a potential supply to a user elsewhere. Cooling water is not considered to be wastewater.

Source: ESRS E3 Water and marine resources

Water consumption

The amount of water drawn into the boundaries of the undertaking (or facility) and not discharged back to the water environment or a third party over the course of the reporting period.

Source: ESRS E3 Water and marine resources

Water discharge

The sum of effluents and other water leaving the boundaries of the organisation and released to surface water, groundwater, or third parties over the course of the reporting period.

Source: ESRS E3 Water and marine resources

Water intensity

A metric providing the relationship between a volumetric aspect of water and a unit of activity (products, sales, etc.) created.

Source: ESRS E3 Water and marine resources

Water scarcity

Refers to the volumetric abundance, or lack thereof, of freshwater resources. Scarcity is human driven; it is a function of the volume of human water consumption relative to the volume of water resources in a given area. As such, an arid region with very little water, but no human water consumption would not be considered scarce, but rather arid. Water scarcity is a physical, objective reality that can be measured consistently across regions and over time. Water scarcity reflects the physical abundance of freshwater rather than whether that water is suitable for use. For instance, a region may have abundant water resources (and thus not be considered water scarce) but have such severe pollution that those supplies are unfit for human or ecological uses.

Source: ESRS E3 Water and marine resources

Water withdrawal

The sum of all water drawn into the boundaries of the undertaking from all sources for any use over the course of the reporting period.

Source: ESRS E3 Water and marine resources

Weighting

Giving outcomes or impacts a weighting (e.g. on a scale of 1 to 10) to allow comparisons to be made about relative importance. For example, an outcome with a weighting of 6 out of 10 would be considered three times as important as an outcome with a weighting of 2 out of 10.

Source: SVI Glossary 2.0

Well defined outcome(s)

The specific aspect(s) of wellbeing that provide(s) the best opportunities to increase or decrease overall state of wellbeing. These should be identified and defined with the people affected.

Source: SVI Glossary 2.0

Wellbeing

State of being where subjective and objective, psychological or physical human needs are met in varying degrees. Accounted for by breaking wellbeing down into aspects of wellbeing for impact management purposes.

Source: SVI Glossary 2.0

Wellbeing valuation

Approach to valuation that uses statistical analysis of large and existing questionnaire datasets to value the effect on wellbeing from changes in life circumstances and life satisfaction. This is done by calculating the increase in income that would be necessary for an equivalent increase in wellbeing.

Source: SVI Glossary 2.0

Work-life balance

Satisfactory state of equilibrium between an individual’s work and private life. Work-life balance encompasses not only the balance between work and private life given family or care responsibilities, but also time allocation between time spent at work and in private life beyond family responsibilities.

Source: ESRS S1 Own workforce

Work-related hazards

Work-related hazards (sources or situations with the potential to cause injury or ill health) can be:
physical (e.g., radiation, temperature extremes, constant loud noise, spills on floors or tripping hazards, unguarded machinery, faulty electrical equipment);

ergonomic (e.g., improperly adjusted workstations and chairs, awkward movements, vibration);

chemical (e.g., exposure to solvents, carbon monoxide, flammable materials, or pesticides);

biological (e.g., exposure to blood and bodily fluids, fungi, bacteria, viruses, or insect bites);

psychosocial (e.g., verbal abuse, harassment, bullying); related to work-organisation (e.g., excessive workload demands, shift work, long hours, night work, workplace violence).

Source: ESRS S1 Own workforce

Work-related incident

Occurrence arising out of or in the course of work that could or does result in injury or ill health. Incidents might be due to, for example, electrical problems, explosion, fire; overflow, overturning, leakage, flow; breakage, bursting, splitting; loss of control, slipping, stumbling and falling; body movement without stress; body movement under/with stress; shock, fright; workplace violence or harassment (e.g., sexual harassment). An incident that results in injury or ill health is often referred to as an ‘accident’. An incident that has the potential to result in injury or ill health but where none occurs is often referred to as a ‘close call’, ‘near-miss’, or ‘near-hit’.

Source: ESRS S1 Own workforce

Worker in the value chain

An individual performing work in the value chain of the undertaking, regardless of the existence or nature of any contractual relationship with that undertaking. In the ESRS, the following is included in the scope of workers in the value chain: all workers in the undertaking’s upstream and downstream value chain who are or can be materially impacted by the undertaking, this includes impacts that are caused or contributed to by the undertaking and those which are directly linked to its own operations, products, or services through its business relationships. This includes all workers who are not included in the scope of “Own workforce” (“Own workforce” includes workers who are in an employment relationship with the undertaking (‘employees’) and non-employee workers who are either individual contractors supplying labour to the undertaking (‘self-employed workers’) or workers provided by undertakings primarily engaged in ‘employment activities’ (NACE Code N78)).

Source: ESRS S2 Workers in the value chain

Workers’ representatives

‘Workers’ representatives’ means:

trade union representatives, namely, representatives designated or elected by trade unions or by members of such unions in accordance with national legislation and practice;

duly elected representatives, namely, representatives who are freely elected by the workers of the organisation, not under the domination or control of the employer in accordance with provisions of national laws or regulations or of collective agreements and whose functions do not include activities which are the exclusive prerogative of trade unions in the country concerned and which existence is not used to undermine the position of the trade unions concerned or their representatives.

Source: ESRS S1 Workers in the value chain