|
Defined term
|
Definition
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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.
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Actor in the value chain
|
Individuals or entities in the upstream or downstream
value chain
. The
actor
is considered downstream from the undertaking (e.g., distributors, customers) when it receives products or services from the undertaking; it is considered upstream from the undertaking (e.g.,
suppliers
) when it provides products or services that are used in the production of the undertaking’s own products or services.
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Adequate wage
|
A
wage
that provides for the satisfaction of the needs of the worker and his / her family in the light of national economic and social conditions.
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Administrative, management and supervisory bodies
|
The governance bodies with the highest decision-making authority in the undertaking including its committees. If in the governance structure, there are no members of the
administrative, management or supervisory bodies
of the undertaking, the CEO, and if such function exists, the deputy CEO, should be included. In some jurisdictions, governance systems consist of two tiers, where supervision and management are separated. In such cases, both tiers are included under the definition of
administrative, management and supervisory bodies
.
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Affected Communities
|
People or group(s) living or working in the same area that have been or may be affected by a reporting undertaking’s operations or through its upstream and downstream
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
.
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Annual total remuneration
|
Annual total remuneration
to
own workforce
includes salary, bonus, stock awards, option awards, non-equity incentive plan compensation, change in pension value, and nonqualified deferred compensation earnings provided over the course of a year.
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Anticipated financial effects
|
Financial effects
that do not meet the recognition criteria for inclusion in the financial statement line items in the reporting period and that are not captured by the
current financial effects
.
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Area at water risk
|
A water catchment, where several physical aspects related to water:
i. lead to one or more water bodies to be in less than good status and / or deteriorate in status (as defined in Directive 2000/60/EC of the European Parliament and of the Council (1)), thus pointing to significant issues as regards water availability, quality, quantity (including high water-stress); and/or
ii. lead to issues as regards 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 supplier(s).
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Area of high-water stress
|
Regions where the percentage of total water withdrawn is high (40-80%) or extremely high (greater than 80%) in the Aqueduct Water Risk Atlas tool of the World Resources Institute (WRI). See also
water scarcity
.
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Associated process materials
|
Materials that are needed for the manufacturing process but are not part of the final product, such as lubricants for manufacturing machinery.
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Best Available Techniques (BAT) conclusions
|
A document containing the parts of a
BAT
reference document laying down the conclusions on
best available techniques
, their description, information to assess their applicability, the
emission
levels associated with the
best available techniques
, the environmental performance levels associated with the
best available techniques
, the minimum content of an environmental management system including benchmarks associated with the
best available techniques
, associated monitoring, associated consumption levels and, where appropriate, relevant
site
remediation
measures (2).
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Best Available Technique-Associated Emission Level (BAT-AEL)
|
The range of
emission
levels obtained under normal operating conditions using a best available technique or a combination of
best available techniques
, as described in
BAT conclusions
, expressed as an average over a given period of time, under specified reference conditions, i.e., the
emission
level that is associated with a
BAT
.
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Best Available Technique-Associated Environmental Performance Level (BAT-AEPL)
|
The range of environmental performance levels, except
emission
levels, obtained under normal operating conditions using a
BAT
or a combination of
BAT
s (3).
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Best Available Techniques (BAT) (4)
|
The most effective and advanced stage in the development of activities and their methods of operation which indicates the practical suitability of particular techniques for providing the basis for
emission
limit values and other permit conditions designed to prevent and, where that is not practicable, to reduce
emissions
and the impact on the environment as a whole:
i. ‘techniques’ includes both the technology used and the way in which the
installation
is designed, built, maintained, operated and decommissioned;
ii. ‘available techniques’ means those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages, whether or not the techniques are used or produced inside the Member State in question, as long as they are reasonably accessible to the operator; and
iii. ‘best’ means most effective in achieving a high general level of protection of the environment as a whole.
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Biodiversity loss
|
The reduction of any aspect of
biological diversity
(i.e., diversity at the genetic, species and
ecosystem
levels) in a particular area through death (including extinction), destruction or physicalmanual removal; it can refer to many scales, from global extinctions to population extinctions, resulting in decreased total diversity at the same scale.
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Biodiversity or biological diversity
|
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
.
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Biodiversity sensitive area
|
Natura 2000 network of
protected areas
, UNESCO World Heritage sites and
Key Biodiversity Areas
(‘KBAs’), as well as other
protected areas
, as referred to in Appendix D of Annex II to Commission Delegated Regulation (EU) 2021/2139 (5).
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Biosphere integrity or ecological integrity
|
The ability of an
ecosystem
to support and maintain ecological processes and a diverse community of organisms.
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Blue economy
|
The
blue economy
encompasses all industries and sectors related to oceans, seas and coasts, whether they are based in the marine environment (e.g., shipping, fisheries, energy generation) or on land (e.g. ports, shipyards, land-based aquaculture and algae production, coastal tourism).
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BREF or EU Best Available Techniques reference documents
|
A document resulting from the exchange of information organised pursuant to Article 13 of Directive 2010/75/EU of the European Parliament and of the Council (6) on industrial
emissions
, drawn up for defined activities and describing, in particular, applied techniques, present
emissions
and consumption levels, techniques considered for the determination of
best available techniques
as well as
BAT conclusions
and any emerging techniques, giving special consideration to the criteria listed in Annex III of Directive 2010/75/EU.
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Bribery
|
Dishonestly persuading someone to act in your favour by giving them a gift of money or another inducement.
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Business model
|
The undertaking’s system of transforming inputs through its activities into outputs and outcomes that aims to fulfil the undertaking’s strategic purposes and create value over the short-, medium- and long-term. ESRS use the term ‘
business model
’ in the singular, although it is recognised that undertakings may have more than one business model.
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Business relationships
|
The relationships the undertaking has with business partners, entities in its
value chain
, and any other non-State or State entity directly linked to its business operations, products or services. Business relationships are not limited to direct contractual relationships. They include indirect
business relationships
in the undertaking’s
value chain
beyond the first tier, and shareholding positions in joint ventures or investments.
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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:
i. further use of the
substance
or object is certain;
ii. the
substance
or object can be used directly without any further processing other than normal industrial practice;
iii. the
substance
or object is produced as an integral part of a production process; and
iv. 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
.
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Carbon credit
|
A transferable or tradable instrument that represents one metric tonne of CO2eq
emission reduction
or removal and is issued and verified according to recognised quality standards.
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Carbon dioxide (CO2) equivalent (eq)
|
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.
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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. 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.
A child is defined as a person under the age of 18. Whether or not particular forms of ‘work’ can be called ‘
child labour’
depends on the child’s age, the type and hours of work performed and the conditions under which it is performed. The answer varies from country to country, as well as among sectors within countries.
The minimum age of work should not be less than the minimum age of completion of compulsory schooling, and, in any case, should not be less than 15 years according to International Labour Organisation (ILO) Convention No. 138 on Minimum Age. 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.
National laws may permit the employment of persons 13 to 15 years of age in light work as long as it is not likely to be harmful to their health or development and does not prejudice their attendance at school or participation in vocational or training programmes. The minimum age for admission into work which by its nature or the circumstances in which it is carried out is likely to jeopardise the health, safety or morals of young persons shall not be less than 18 years.
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Circular economy
|
An economic system in which 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
.
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Circular economy principles
|
The European
circular economy
principles are:
i. usability;
ii. reusability;
iii. repairability;
iv. disassembly;
v. remanufacturing or refurbishment;
vi.
recycling
;
vii. recirculation by the biological cycle;
viii. other potential optimisation of product and material use.
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Circular material use rate
|
Recirculation of materials, components and products in practice after first use employing the following strategies (in order of preference):
i. maintenance/prolonged use;
ii.
reuse
/redistribution;
iii. refurbishment/remanufacturing;
iv.
recycling
, composting, or anaerobic digestion.
The
use rate
is defined as the ratio of circular use of materials to overall use of materials.
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Classified information
|
EU
classified information
as defined in Council Decision 2013/488/EU (7) on the security rules for protecting EU
classified information
or classified by one of the Member States and marked as per Appendix B of that Council decision.
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Climate change adaptation
|
The process of adjustment to actual and expected climate change and its
impacts
.
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Climate change mitigation
|
The process of reducing
GHG
emissions
and holding the increase in the global average temperature to 1,5 °C above pre-industrial levels, in line with the Paris Agreement.
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Climate resilience
|
The capacity of an undertaking to adjust to climate changes, and to developments or uncertainties related to climate change.
Climate resilience
involves the capacity to manage climate-related
Scope 1
and benefit from climate-related
opportunities
, including the ability to respond and adapt to
transition risks
and
physical risks
. An undertaking’s
climate resilience
includes both its strategic resilience and its operational resilience to climate-related changes, developments or uncertainties associated with climate change.
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Climate-related opportunity
|
Potential positive effects related to climate change for the undertaking. Efforts to mitigate and adapt to climate change can produce
opportunities
for undertakings.
Climate-related
opportunities
will vary depending on the region, market, and industry where an undertaking operates.
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Climate-related physical risk (Physical risk from climate change)
|
Risks
resulting from climate change that can be event-driven (acute) or from longer-term shifts (chronic) in climate patterns.
Acute
physical risks
arise from particular hazards, especially weather-related events such as storms, floods, fires or heatwaves. Chronic
physical risks
arise from longer-term changes in the climate, such as temperature changes, and their effects on rising sea levels, reduced water availability,
biodiversity loss
and changes in land and
soil
productivity.
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Climate-related transition risk
|
Risks
that arise from the transition to a low-carbon and climate-resilient economy. They typically include
policy
risks
, legal
risks
, technology
risks
, market
risks
and reputational
risks
.
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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 regulating relations between employers or their organisations and a workers' organisation or workers' organisations.
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Confirmed incident (child or forced labour or human trafficking)
|
Incident
of child or
forced labour
or human trafficking that has been found to be substantiated.
Confirmed
incidents
do not include
incidents
of child or
forced labour
or human trafficking that are still under investigation in the reporting period.
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Confirmed incident of corruption or bribery
|
An
incident
of
corruption
or
bribery
that has been found to be substantiated.
Confirmed incidents
of corruption
or bribery do not include
incidents
of corruption
or bribery that are still under investigation at the end of the reporting period. The determination of potential non-compliance cases as substantiated may be made either by the undertaking’s compliance officer or similar function or an authority. A determination as substantiated by a court of law is not required.
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Consumer
|
Individuals who acquire, consume or use goods and services for personal use, either for themselves or for others, and not for resale, commercial or trade, business, craft or profession purposes.
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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.
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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.
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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.
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Current financial effects
|
Financial effects
for the current reporting period that are recognised in the primary financial statements.
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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
.
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Deforestation
|
Temporary or permanent human-induced conversion of forested land to non-forested land (8).
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Degradation or degraded ecosystem
|
Chronic human
impacts
resulting in the loss of
biodiversity
and the disruption of an
ecosystem
s structure, composition, and functionality.
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Dependencies
|
The situation of an undertaking being dependent on natural, human and/or social resources for its business processes.
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Deposit in water and soil
|
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.
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Desertification
|
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.
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Discharge
|
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. Sewage effluent (or
discharge
) means treated sewage discharged from a sewage treatment plant.
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Discrimination
|
Discrimination
can occur directly or indirectly. Direct
discrimination
occurs 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.
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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.
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Durability of a product, component or material
|
The ability of a product, component or material to remain functional and relevant when used as intended.
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Ecological threshold
|
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.
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Ecosystem extent
|
The size of an
ecosystem
asset, whereas an
ecosystem
asset is the contiguous space of a specific
ecosystem
type characterised by a distinct set of biotic and abiotic components and their interactions.
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Ecosystem restoration
|
Any intentional activities that initiate or accelerate the recovery of an
ecosystem
from a degraded state.
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Ecosystem services
|
The contributions of
ecosystems
to the benefits that are used in economic and other human activity, respectively the benefits people obtain from
ecosystems
. In the Millennium Ecosystem Assessment,
ecosystem
services
can be divided into supporting, regulating, provisioning and cultural. The Common International Classification of Ecosystem Services (CICES) classifies types of
ecosystems
services.
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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.
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Emission
|
The direct or indirect release of
substances
, vibrations, heat or noise from individual or diffuse sources into air, water or
soil
(9).
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Employee
|
An individual who is in an employment relationship with the undertaking according to national law or practice.
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End-users
|
Individuals who ultimately use or are intended to ultimately use a particular product or service.
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Equal opportunities
|
Equal and non-discriminatory access, among individuals, to 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.
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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. In the context of ESRS S1, the term ‘
equal treatment
’ also refers to the principle of non-discrimination, according to which there shall be no direct or indirect
discrimination
based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation.
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Financial effects
|
Effects from
risks
and
opportunities
that affect the undertaking’s financial position, financial performance and cash flows over the short, medium or long term.
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Financial materiality
|
A sustainability matter is material from a financial perspective if it generates
risks
or
opportunities
that affect (or could reasonably be expected to affect) the undertaking’s financial position, financial performance, cash flows, access to finance or cost of capital over the short, medium or long term.
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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.
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Fossil fuel
|
Non-renewable carbon-based energy sources such as solid fuels, natural gas and oil.
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Free, Prior and Informed Consent (FPIC)
|
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.
FPIC
pertains to
indigenous peoples
and is recognized under international human rights law, notably the United Nations Declaration on the Rights of
Indigenous Peoples
(UNDRIP).
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Freshwater
|
Groundwater
and surface water, with a mean annual salinity of < 0,5 ‰ (i.e., the limit mentioned in Annex II of the Water Framework Directive).
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GHG emission reduction
|
Decrease in the undertaking’s
Scope 1, 2, 3
or total
GHG
emissions
at the end of the reporting period, relative to
emissions
in the base year.
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 operations and upstream and downstream
value chain
. Removals and avoided
emissions
are not counted as
emission reductions
.
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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 anthropogenic 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 from the atmosphere, can remove atmospheric CO2 if it is combined with bioenergy production (Bioenergy with Carbon Capture & Storage - BECCS). Removals can be subject to reversals, which are any movement of stored
GHG
out of the intended storage that re-enters the 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.
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Global warming potential (GWP)
|
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.
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Greenhouse Gases (GHG)
|
The gases listed in Part 2 of Annex V of Regulation (EU) 2018/1999 of the European Parliament and of the Council (10). These include Carbon dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Sulphur hexafluoride (SF6), Nitrogen trifluoride (NF3), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs).
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Grievance mechanism
|
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 undertaking, 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.
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Groundwater
|
All water which is below the surface of the ground in the saturation zone and in direct contact with the ground or subsoil (11).
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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.
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Habitat fragmentation
|
A general term describing the set of processes by which
habitat
loss results in the division of continuous
habitats
into a greater number of smaller patches of lesser total size and isolated from each other by a matrix of dissimilar
habitats
.
Habitat
fragmentation
may occur through natural processes (e.g., forest and grassland fires, flooding) and through human activities (forestry, agriculture, urbanisation).
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Harassment
|
A situation where an unwanted conduct related to a protected ground of
discrimination
(for example, gender under Directive 2006/54/EC of the European Parliament and of the Council (12), or religion or belief, disability, age or sexual orientation under Council Directive 2000/78/EC (13)) occurs with the purpose or effect of violating the dignity of a person, and of creating an intimidating, hostile, degrading, humiliating or offensive environment.
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Hazardous waste
|
Waste
which displays one or more of the hazardous properties listed in Annex III of Directive 2008/98/EC of the European Parliament and of the Council (14) on
waste
.
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High climate impact sectors
|
Sectors that are listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council (15) (as defined in Commission Delegated Regulation (EU) 2022/1288 (16)).
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Impacts
|
The effect the undertaking has or could have on the environment and people, including effects on their human rights, connected with its own operations and upstream and downstream
value chain
, including through its products and services, as well as through its
business relationships
. The
impacts
can be actual or potential, negative or positive, intended or unintended, and reversible or irreversible. They can arise over the short-, medium-, or long-term.
Impacts
indicate the undertaking’s contribution, negative or positive, to sustainable development.
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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.
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|
Impact materiality
|
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. A material sustainability matter from an impact perspective includes
impacts
connected with the undertaking’s own operations and upstream and downstream
value chain
, including through its products and services, as well as through its
business relationships
.
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|
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
.
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|
Incineration
|
The controlled burning of
waste
at high temperature with or without energy recovery.
|
|
Independent board member
|
Board members that exercise independent judgment free from any external influence or conflicts of interest. Independence generally means the exercise of objective, unfettered judgement. When used as the measure by which to judge the appearance of independence, or to categorise a non-executive member of the
administrative, management and supervisory bodies
or their committees as independent, it means the absence of an interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.
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|
Indigenous peoples
|
There is no single definition for
indigenous peoples
agreed on at the international level. In practice, there is convergence among international agencies on what groups can be considered
indigenous peoples
and should enjoy special protection as such. An important criteria for defining
indigenous people
is related to their connection to a traditional area, as defined in ILO Convention No. 169, Article 1, which states that the convention applies to: ‘(a) 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; (b) 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’. ILO Convention 169 also states in Article 1(2) that: ‘[s]elf-identification as indigenous or tribal shall be regarded as a fundamental criterion for determining the groups to which the provisions of this Convention apply’.
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|
Indirect GHG emissions
|
GHG
emissions
that are a consequence of the activities of an entity but occur at sources owned or controlled by another entity.
Indirect emissions
are
Scope 2 GHG emissions
and
scope 3 GHG emissions
combined.
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|
Installation
|
A stationary technical unit within which one or more activities are carried out which could have an effect on
emissions
and
pollution
.
|
|
Internal carbon price
|
Price used by an undertaking to assess the financial implications of changes to investment, production, and consumption patterns, and of potential technological progress and future
emissions
abatement costs.
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|
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).
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|
Invasive or alien species
|
Species whose introduction and/or spread by human 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.
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|
Key Biodiversity Area (KBA)
|
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
KBAs
is managed by BirdLife International on behalf of the
KBA
Partnership.
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|
Land degradation
|
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
.
|
|
Landfill
|
A
waste
disposal
site
for the deposit of the
waste
onto or into land (17).
|
|
Land-system (change)
|
The terrestrial component of the Earth system, encompassing all processes and activities related to the human use of land. These include socio-economic, technological and organisational inputs and arrangements, as well as the benefits gained from land and the unintended social and ecological outcomes of societal activities. The
land-systems
concept combines land-use (the activities, arrangements and inputs associated with land-use) with land cover (the ensemble of physical characteristics of land discernible by Earth Observation).
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|
Land-use (change)
|
The human use of a specific area for a certain purpose (such as residential; agriculture; recreation; industrial, etc.). Influenced by, but not synonymous with, land cover.
Land-use change
refers to a change in the use or management of land by humans, which may lead to a change in land cover.
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|
Legitimate representatives
|
Individuals recognised as legitimate under law or practice, such as elected trade union representatives in the case of workers, or other similarly freely chosen representatives of affected
stakeholders
.
|
|
Leverage
|
The ability of the undertaking to effect a change in the wrongful practices of another party that is connected with a negative sustainability-related impact.
|
|
Lobbying activities
|
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):
i. organising or participating in meetings, conferences, events;
ii. contributing to/participating in public consultations, hearings or other similar initiatives;
iii. organising communication campaigns, platforms, networks, grassroots initiatives;
iv. preparing/commissioning policy and position papers, opinion polls, surveys, open letters, research work as per the activities covered by transparency register rules.
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|
Locked-in GHG emissions
|
Estimates of future
GHG
emissions
that are likely to be caused by an undertaking’s key assets or products sold within their operating lifetime.
|
|
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.
|
|
Marine resources
|
Biological and non-biological resources found in the seas and oceans. Examples include but are not limited to deep sea minerals, gravels, and seafood products
|
|
Material opportunities
|
Sustainability related opportunities
with positive
financial effects
that materially affect, (or could reasonably be expected to affect) the undertaking’s cash flows, access to finance, or cost of capital over the short, medium or long term.
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|
Material risks
|
Sustainability related risks
with negative
financial effects
that materially affect (or could reasonably be expected to affect) the undertaking’s cash flows, access to finance, or cost of capital over the short, medium or long term.
|
|
Materiality
|
A sustainability matter is material if it meets the definition of
impact materiality
,
financial materiality
, or both.
|
|
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.
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|
Microplastics
|
Small pieces of plastics, usually smaller than 5mm. A growing volume of
microplastics
is found in the environment, including the sea, and in food and drinking water. Once in the environment,
microplastics
do not biodegrade and tend to accumulate, unless they are specifically designed to biodegrade in the open environment. Biodegradability is a complex phenomenon, especially in the marine environment. There are increasing concerns about the presence of
microplastics
in different environment compartments (such as water), their impact on the environment and potentially human health.
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|
Minimum Disclosure Requirement
|
A
minimum disclosure requirement
sets the required content of the information that the undertaking includes when it reports on policies,
actions
,
metrics
or
targets
, either pursuant to a Disclosure Requirement in an ESRS or on an entity-specific basis.
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|
Natural resources
|
Natural assets (
raw materials
) occurring in nature that can be used for economic production or consumption.
|
|
Nature-based solutions
|
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.
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|
Net-zero target
|
Setting a
net-zero target
at the level of an undertaking aligned with meeting societal climate goals means:
i. achieving a scale of
value chain
emissions
reductions consistent with the abatement required to reach global net-zero in 1.5°C pathways; and
ii. neutralizing the impact of any residual
emissions
(after approximately 90-95% of
GHG
emission reduction
with the possibility for justified sectoral variations in line with a recognized sectoral pathway) by permanently removing an equivalent volume of CO2.
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|
Non-employees
|
Non-employees
in an undertaking’s
own workforce
include both individual contractors supplying labour to the undertaking (‘self-employed people’) and people provided by undertakings primarily engaged in ‘employment activities’ (NACE Code N78).
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|
Non-renewable energy
|
Energy which cannot be identified as being derived from renewable sources.
|
|
Operational control
|
Operational control (over an entity,
site
, operation or asset) is the situation where the undertaking has the ability to direct the operational activities and relationships of the entity,
site
, operation or asset.
|
|
Opportunities
|
Sustainability-related opportunities
with positive
financial effects.
|
|
Overtime
|
The number of hours actually worked by a worker in excess of his or her contractual hours of work.
|
|
Own workforce/own workers
|
Employees
who are in an employment relationship with the undertaking (‘
employees
’) and
non-employees
who are either individual contractors supplying labour to the undertaking (‘self-employed people’) or people provided by undertakings primarily engaged in ‘employment activities’ (NACE Code N78).
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|
Ozone-depleting substances
|
Substances
listed in the Montreal Protocol on
Substances
that Deplete the Ozone Layer.
|
|
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
(18).
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|
Pay
|
The ordinary basic or minimum
wage
or salary and any other remuneration, whether in cash or in kind which the worker receives directly or indirectly (‘complementary or variable components’), in respect of his/her employment from his/her employer. ‘
Pay
level’ means gross annual pay and the corresponding gross hourly pay. ‘Median
pay
level’ means the pay of the
employee
that would have half of the
employees
earn more and half less than they do.
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|
Persons with disabilities
|
Persons 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.
|
|
Physical risks
|
All global economic enterprise depends on the functioning of earth systems, such as a stable climate and on
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
.
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|
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.
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|
Policy
|
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.
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|
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 (19).
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|
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 (20).
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|
Pollution of soil
|
The introduction into
soil
– independent of whether that introduction occurs at the production
site
of an undertaking or outside or through the use of the undertaking’s products and/or services – as a result of human activity, of
substances
, vibrations, heat or noise which may be harmful to human health or the environment, result in damage to material property, or impair or interfere with amenities and other legitimate uses of the environment (21).
Soil
pollutants
include
inorganic pollutants
, persistent organic
pollutants
(POPs), pesticides, nitrogen and phosphorus compounds, etc.
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|
Protected area
|
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.
|
|
Purchased or acquired electricity, heat, steam, or cooling
|
When the undertaking has received its electricity, heat, steam, or cooling 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.
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|
Raw material
|
Primary or secondary material that is used to produce a product.
|
|
Recognised quality standards for carbon credits
|
Quality standards for
carbon credits
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
and removals.
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|
Recordable work-related injury or ill health
|
Work-related injury or ill health that results in any of the following:
i. death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness; or
ii. 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.
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|
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 (22).
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|
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.
|
|
Resource regeneration
|
Promotion of self-renewal capacity of natural systems with the aim of reactivating ecological processes damaged or over-exploited by human action.
|
|
Remedy/remediation
|
To counteract or make good a negative impact. 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.
|
|
Renewable energy
|
Energy from renewable non-fossil sources, namely 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 (23).
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|
Renewable materials
|
Materials that are 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.
|
|
Resource inflows
|
Resource that enters the undertaking’s facilities.
|
|
Resource outflows
|
Resource that leaves the undertaking’s facilities.
|
|
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 optimise resource use.
|
|
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 modification.
|
|
River basin
|
The area of land from which all surface run-off flows through a sequence of streams, rivers and, possibly, lakes into the sea at a single river mouth, estuary or delta.
|
|
Risks
|
Sustainability-related risks
with negative
financial effects
arising from environmental, social or governance matters that may negatively affect the undertaking's financial position, financial performance, cash flows, access to finance or cost of capital in the short, medium or long term.
|
|
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
.
|
|
Scenario analysis
|
A process for identifying and assessing a potential range of outcomes of future events under conditions of uncertainty.
|
|
Scope 1 GHG emissions
|
Direct
GHG
emissions
from sources that are owned or controlled by the undertaking.
|
|
Scope 2 GHG emissions
|
Indirect
emissions
from the generation of
purchased or acquired electricity, steam, heat or cooling
consumed by the undertaking.
|
|
Scope 3 GHG emissions
|
All
indirect GHG emissions
(not included in
scope 2 GHG
emissions
) that occur in the
value chain
of the reporting undertaking, including both upstream and downstream
emissions
.
Scope 3
GHG
emissions
can be broken down into
scope 3 categories
.
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|
Scope 3 category
|
One of the 15 types of
Scope 3
GHG
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.
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|
Sensitive information
|
Sensitive information
as defined in Regulation (EU) 2021/697 of the European Parliament and of the Council (24) establishing the European Defence Fund.
|
|
Site
|
The location of one or more physical
installations
. If there is more than one physical
installation
from the same or different owners or operators and certain infrastructure and facilities are shared, the entire area where the physical
installation
are located may constitute a
site
.
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|
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).
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|
Social protection
|
The set of measures designed to reduce and prevent poverty and vulnerability across the life cycle.
|
|
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 (25).
|
|
Soil degradation
|
The diminishing capacity of the
soil
to provide
ecosystem
goods and services as desired by its
stakeholders
.
|
|
Soil sealing
|
Covering
soil
in a way that makes the covered area impermeable (e.g. a road). This non-permeability can create environmental
impacts
as described in Commission Regulation (EU) 2018/2026 (26).
|
|
Specific loads
|
Mass of
pollutant
released per mass of product manufactured.
Specific loads
allow for the comparison of the environmental performance of installations irrespective of their different production volumes and are not influenced by mixing or dilution (27).
|
|
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.
|
|
Stakeholders
|
Those who can affect or be affected by the undertaking. There are two main groups of
stakeholders
:
i. 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
ii.
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.
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|
Substances
|
Any chemical element and its compounds, with the exception of the following
substances
:
i. radioactive
substances
as defined in Article 1 of Council Directive 96/29/Euratom (28) laying down basic safety standards for the protection of the health of workers and the general public against the dangers arising from ionising radiation;
ii. genetically modified micro-organisms as defined in Article 2(b) of Directive 2009/41/EC of the European Parliament and the Council (29) on the contained use of genetically modified micro-organisms;
iii. genetically modified organisms as defined in point 2 of Article 2 of Directive 2001/18/EC of the European Parliament and of the Council (30) on the deliberate release into the environment of genetically modified organisms. (31)
|
|
Substances of concern
|
A
substance
that:
i. meets the criteria laid down in Article 57 and is identified in accordance with Article 59(1) of Regulation (EC) No 1907/2006 of the European Parliament and of the Council (32);
ii. is classified in Part 3 of Annex VI to Regulation (EC) No 1272/2008 of the European Parliament and of the Council (33) in one of the following hazard classes or hazard categories:
— carcinogenicity categories 1 and 2;
— germ cell mutagenicity categories 1 and 2;
— reproductive toxicity categories 1 and 2;
— endocrine disruption for human health;
— endocrine disruption for the environment;
— Persistent, Mobile and Toxic or Very Persistent, Very Mobile properties;
— Persistent, Bioaccumulative and Toxic or Very Persistent, Very Bioaccumulative properties;
— 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
iii. negatively affects the re-use and recycling of materials in the product in which it is present, as defined in relevant Union product-specific ecodesign requirements.
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|
Substances of Very High Concern (SVHCs)
|
Substances
that meet the criteria laid down in Article 57 of Regulation (EC) No 1907/2006 (REACH) and were identified in accordance with Article 59(1) of that Regulation.
|
|
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.
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|
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 and production 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
) and entities with which the undertaking has an indirect business relationship.
|
|
Surface water
|
Inland waters, except
groundwater
; transitional waters and coastal waters, except in respect of chemical status for which it shall also include territorial waters (34).
|
|
Sustainability matters
|
Environmental, social and human rights, and governance factors, including sustainability factors defined in Article 2, point (24), of Regulation (EU) 2019/2088 of the European Parliament and of the Council (35).
|
|
Sustainability statement
|
The dedicated section of the undertaking’s management report where the information about
sustainability matters
prepared in compliance with Directive 2013/34/EU of the European Parliament and of the Council (36) and the ESRS is presented.
|
|
Sustainability-related opportunities
|
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
, or strategy on 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 regard 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.
|
|
Sustainability-related risks
|
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
or strategy and on 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.
|
|
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, medium or long-term, intended or unintended, and reversible or irreversible.
Impacts
indicate the undertaking's contribution, negative or positive, to sustainable development.
|
|
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.
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Targets
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Measurable, outcome-oriented and time-bound goals that the undertaking aims to achieve in relation to material
impacts
,
risks
or
opportunities
. They may be set voluntarily by the undertaking or derive from legal requirements on the undertaking.
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Threatened species
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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 Commission Delegated Regulation (EU) 2021/2139.
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Training
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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.
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Transition plan
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A specific type of action plan that is adopted by the undertaking in relation to a strategic decision and that addresses:
i. a public policy objective; and/or
ii. 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.
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Transition plan for climate change mitigation
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An aspect of an undertaking’s overall strategy that lays out the undertaking’s
targets
,
actions
and resources for its transition towards a lower--carbon economy, including
actions
such as reducing its
GHG
emissions
with regard to the objective of limiting global warming to 1.5°C and climate neutrality.
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Transition risks
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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 the climate or to nature, such as government measures, technological breakthroughs, market changes, litigation and changing
consumer
preferences can all create or change
transition risks
.
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Users
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Users
of
sustainability statements
are 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.
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Value chain
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The full range of activities, resources and relationships related to the undertaking’s
business model
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:
i. those in the undertaking’s own operations, such as human resources;
ii. those along its supply, marketing and distribution channels, such as materials and service sourcing and product and service sale and delivery; and
iii. the financing, geographical, geopolitical and regulatory environments in which the undertaking operates.
Value chain
includes
actors
upstream and downstream from the undertaking.
Actors
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.
ESRS use the term ‘
value chain
’ in the singular, although it is recognised that undertakings may have multiple
value chains
.
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Value chain worker
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An individual performing work in the
value chain
of the undertaking, regardless of the existence or nature of any contractual relationship with the undertaking. In the ESRS, the scope of workers in the
value chain
include 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 connected to the undertaking’s own operations, and
value chain
, including through its products or services, as well as through its
business relationships
. This includes all workers who are not in the scope of ‘
Own Workforce
’ (‘
Own Workforce
’ includes people who are in an employment relationship with the undertaking (‘
employees
’) and
non-employees
who are either individual contractors supplying labour to the undertaking (‘self-employed people’) or people provided by undertakings primarily engaged in employment activities. (NACE Code N78)
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Wage
|
Gross
wage
, excluding variable components such as
overtime
and incentive
pay
, and excluding allowances unless they are guaranteed.
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Waste
|
Any
substance
or object which the holder discards or intends or is required to discard (37).
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Waste hierarchy
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Priority order in
waste
prevention and management (38):
i. prevention;
ii. preparing for re-use;
iii.
recycling
;
iv. other recovery (e.g., energy recovery); and
v. disposal.
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Waste management
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The collection, transport, recovery and disposal of
waste
, including the supervision of such operations and the after-care of disposal
sites
, and including
actions
taken as a dealer or broker (39).
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Wastewater
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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
.
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Water consumption
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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.
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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.
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Water intensity
|
A metric providing the relationship between a volumetric aspect of water and a unit of activity (products, sales, etc.) created.
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Water (recycled and reused)
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Water and
wastewater
(treated or untreated) that has been used more than once before being discharged from the undertaking’s or shared facilities’ boundary, so that water demand is reduced. This may be in the same process (recycled) or in a different process within the same facility (own or shared with other undertakings) or in another of the undertaking’s facilities (reused).
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Water scarcity
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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.
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Water withdrawal
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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.
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Workers’ representatives
|
Workers' representatives means:
i. trade union representatives, namely representatives designated or elected by trade unions or by members of such unions in accordance with national legislation and practice;
ii. 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.
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Work-life balance
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Satisfactory state of equilibrium between an individual’s work and private life.
Work-life balance
in a broader sense 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.
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Work-related hazards
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Work-related hazards
can be:
i. physical (e.g., radiation, temperature extremes, constant loud noise, spills on floors or tripping hazards, unguarded machinery, faulty electrical equipment);
ii. ergonomic (e.g., improperly adjusted workstations and chairs, awkward movements, vibration);
iii. chemical (e.g., exposure to carcinogens, mutagens, reprotoxic
substances
, solvents, carbon monoxide, or pesticides);
iv. biological (e.g., exposure to blood and bodily fluids, fungi, bacteria, viruses, or insect bites);
v. psychosocial (e.g., verbal abuse,
harassment
, bullying);
vi. related to work-organisation (e.g., excessive workload demands, shift work, long hours, night work, workplace violence).
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Work-related incident
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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’.
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(1)
Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJ L 327, 22.12.2000, p. 1).
(2)
Directive 2010/75/EU on industrial emissions (IED).
(3)
Commission Implementing Decision of 10 February 2012 laying down rules concerning guidance on the collection of data and on the drawing up of BAT reference documents and on their quality assurance referred to in Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions (OJ L 63, 2.3.2012, p. 1).
(4)
Article 3 point 10 of Directive 2010/75/EU on industrial emissions (IED).
(5)
Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives (OJ L 442, 9.12.2021, p. 1).
(6)
Directive 2010/75/EU on industrial emissions (IED).
(7)
2013/488/EU: Council Decision of 23 September 2013 on the security rules for protecting EU classified information (OJ L 274, 15.10.2013, p. 1).
(8)
Annex I point 21 of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’, specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports (OJ L 196, 25.7.2022, p. 1).
(9)
Directive 2010/75/EU on industrial emissions (IED).
(10)
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).
(11)
Article 2(20) of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
(12)
Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (OJ L 204, 26.7.2006, p. 23).
(13)
Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ L 303, 2.12.2000, p. 16).
(14)
Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p. 3).
(15)
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains (OJ L 393, 30.12.2006, p. 1).
(16)
Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’, specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports (OJ L 196, 25.7.2022, p. 1).
(17)
Article 2 point (g) of Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (OJ L 182, 16.7.1999, p. 1).
(18)
Article 3(1) of Directive 94/62/EC of the European Parliament and of the Council of 20 December 1994 on packaging and packaging waste (OJ L 365, 31.12.1994, p. 10).
(19)
Article 2(10) of Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment.
(20)
Directive 2010/75/EU on industrial emissions (IED).
(21)
Directive 2010/75/EU on industrial emissions (IED).
(22)
Article 3(15) of Directive 2008/98/EC on waste.
(23)
Article 2(1) Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).
(24)
Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing the European Defence Fund and repealing Regulation (EU) 2018/1092 (OJ L 170, 12.5.2021, p. 149).
(25)
Article 3(21) of Directive 2010/75/EU on industrial emissions (IED).
(26)
Commission Regulation (EU) 2018/2026 of 19 December 2018 amending Annex IV to Regulation (EC) No 1221/2009 of the European Parliament and of the Council on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS) (OJ L 325, 20.12.2018, p. 18).
(27)
Commission Implementing Decision of 10 February 2012 laying down rules concerning guidance on the collection of data and on the drawing up of BAT reference documents and on their quality, assurance referred to in Directive 2010/75/EU of the European Parliament and of the Council on industrial emissions.
(28)
Council Directive 96/29/Euratom of 13 May 1996 laying down basic safety standards for the protection of the health of workers and the general public against the dangers arising from ionizing radiation (OJ L 159, 29.6.1996, p. 1).
(29)
Directive 2009/41/EC of the European Parliament and of the Council of 6 May 2009 on the contained use of genetically modified micro-organisms (OJ L 125, 21.5.2009, p. 75).
(30)
Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing Council Directive 90/220/EEC (OJ L 106, 17.4.2001, p. 1).
(31)
Directive 2010/75/EU on industrial emissions (IED).
(32)
Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC (OJ L 396, 30.12.2006, p. 1)
(33)
Regulation (EC) No 1272/2008 of the European Parliament and of the Council of 16 December 2008 on classification, labelling and packaging of substances and mixtures, amending and repealing Directives 67/548/EEC and 1999/45/EC, and amending Regulation (EC) No 1907/2006 (OJ L 353, 31.12.2008, p. 1).
(34)
Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (Water Framework Directive).
(35)
Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector.
(36)
Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).
(37)
Article 3(1) of Directive 2008/98/EC on waste.
(38)
Article 4(1) of the Directive 2008/98/EC on waste.
(39)
Article 3(9) of the Directive 2008/98/EC on waste.
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