Understanding Key Terms in Climate Reporting & Disclosure

As the world continues to grapple with the impacts of climate change, the importance of transparency and accountability in climate reporting has never been greater. Understanding the terminology used in climate reporting and disclosure is crucial for anyone involved in sustainability efforts.

The following glossary provides definitions for key terms essential for navigating the complex landscape of climate reporting. By familiarizing yourself with these terms, you can better understand the frameworks and standards that guide climate disclosure practices.

Glossary of Key Climate Reporting Terms:

1. Carbon Border Adjustment Mechanism (CBAM): A European Union directive that levies a price on the carbon content of specific goods entering the EU to prevent carbon leakage and ensure fair competition.
    
2. Carbon Disclosure Project (CDP): An organization that provides a platform for companies, cities, states, and regions to disclose their environmental impacts, mainly related to carbon emissions.
    
3. Conference of the Parties (COP): These are the annual meetings of the UNFCCC parties, notable for agreements like the Kyoto Protocol (COP3) and the Paris Agreement (COP21).
    
4. Corporate Sustainability Reporting Directive (CSRD): This EU directive replaces the Non-Financial Reporting Directive (NFRD) and mandates that large companies disclose information on their environmental and social impacts.
    
5. Environmental, Social, and Governance (ESG): Criteria used to evaluate a company's operations and performance regarding sustainability and ethical impact.
    
6. European Union Emissions Trading System (EU ETS): Launched in 2005, the EU ETS is the world’s first major carbon market. It operates on a cap-and-trade principle to reduce greenhouse gas emissions.
    
7. Financial Stability Board (FSB): An international body that monitors and makes recommendations about the global financial system, the FSB was involved in launching the Task Force on Climate-Related Financial Disclosures (TCFD).
    
8. Global Reporting Initiative (GRI): An international independent standards organization that helps businesses, governments, and other organizations understand and communicate their impacts on climate change.
    
9. Greenhouse Gas (GHG): GHGs are gases that trap heat in the atmosphere, contributing to global warming and climate change.
    
10. Greenhouse Gas Protocol (GHG Protocol): A standard for measuring and managing greenhouse gas emissions, guiding organizations to calculate their carbon emissions.
     
11. Intergovernmental Panel on Climate Change (IPCC): A United Nations body responsible for assessing the science related to climate change and providing policymakers with regular scientific assessments.
     
12. Kyoto Protocol: An international treaty signed in 1997 at COP3, committing industrialized countries to reduce greenhouse gas emissions.
     
13. Nationally Determined Contributions (NDCs): Climate action plans submitted by countries under the Paris Agreement, outlining their efforts to reduce national emissions and adapt to climate change.
     
14. Non-Financial Reporting Directive (NFRD): An EU directive that required large companies to disclose information on their environmental and social impacts, replaced by the CSRD.
     
15. Paris Agreement: An international treaty signed in 2015 at COP21, committing countries to limit global warming to well below 2°C, preferably to 1.5°C.
     
16. Science-Based Targets Initiative (SBTi): An initiative that provides companies with a framework to set greenhouse gas reduction targets in line with the latest climate science.
     
17. Task Force on Climate-Related Financial Disclosures (TCFD): An organization that develops voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, and insurance underwriters.
     
18. United Nations Framework Convention on Climate Change (UNFCCC): An international environmental treaty adopted in 1992 to combat climate change by limiting average global temperature increases and coping with the impacts.

Being familiar with this climate reporting terminology will help you better understand the frameworks and standards guiding climate disclosure practices.

To learn more about climate reporting and disclosure, read "From Past to Present: The Evolution of Climate Reporting & Disclosure."   It is a brief history lesson that covers key milestones and developments, enhancing your understanding of the past, helping you better prepare for the future, and contributing to a more sustainable and transparent world.  

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