Glossary

Internal carbon pricing is a tool an organization uses internally to guide its decision-making process in relation to climate change impacts, risks and opportunities (The World Bank, 2017).

Intervention (or project) accounting methods which measure system-wide GHG impacts relative to a counterfactual baseline scenario or performance benchmark that represent the conditions most likely to occur in the absence of the mitigation project that generates the credit (Greenhouse Gas Protocol, 2022).

The term "investment" (unless explicitly stated otherwise) is used in the broad sense: “Putting money into activities or organizations with the expectation of making a profit.” Most forms of investment involve some form of risk taking, such as investment in equities, debt, property, projects, and even fixed interest securities which are subject to inflation risk, among other risks (PCAF, 2022a).

Business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity (Investopedia, 2023).

A just transition incorporates key principles, such as respect and dignity for vulnerable groups, the creation of decent jobs, social protection, employment rights, fairness in energy access and use, and social dialogue and democratic consultation with the relevant stakeholders, while coping with the effects of asset-stranding and the transition to net-zero (IPCC, 2022).

Greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind (International Labour Organization (ILO), 2023).

La Niña refers to the periodic cooling of ocean surface temperatures in the central and east-central equatorial Pacific Ocean. Typically, La Niña events occur every three to five years, but on occasion can occur over successive years, affecting patterns of rainfall, atmospheric pressure, and global atmospheric circulation. (National Weather Service & NOAA, 2012).

Transformation from one land use category (e.g., cropland, grassland, forest/woodland, urban/industrial, wetland/tundra) to another category (e.g., transformation from natural forest to cropland).

The total time required between conception and commissioning of a facility (International Energy Agency, 2023).

When a mitigation activity carbon crediting project or program displaces emission-creating activities outside the project or program boundary rather than halting them in actual terms. Leakage of GHG emissions can occur when mitigation activities: (a) shift location (activity-shifting leakage); (b) indirectly affect areas that are hydrologically connected (ecological leakage); (c) impact the supply or demand of an emissions-intensive product or service (market leakage); or (d) impact upstream or downstream emissions (upstream/downstream emissions leakage) (ICVCM, 2023).

The firm lending capital to the borrower via credit or loans.

A private equity fund’s acquisition of a portfolio company using relatively significant levels of debt finance to meet the cost of acquisition. A leveraged buyout usually sees the buyer take a majority stake and gain control of the portfolio company.

Compilation and evaluation of the inputs, outputs, and potential environmental impacts of a product system throughout its life cycle (International Organization for Standardization, 2006). LCA is a tool for the analysis of the environmental burden of products at all stages in their life cycle - from the extraction of resources, through to the production of materials, product parts and the product itself, and the use of the product to the management after it is discarded, either by reuse, recycling or final disposal (Guinee, 2002).

Investors in private equity funds are also known as limited partners, since most private equity funds take the form of limited partnerships

Percentage of emissions that, on average, must be reduced annually to be consistent with an emissions pathway from a fixed base year.

Liquified gas tanker is a type of maritime vessel. It includes:

• CO2 tanker
• Combination gas tanker (liquefied natural gas, LNG/liquefied petroleum gas, LPG)
• LNG tanker
• LPG tanker
• LPG tanker, inland waterways
• LPG/Chemical tanker

Asset class that includes all investments in equity securities (regardless of how they are traded) that are issued by listed companies (i.e., those that have equity listed and traded on a stock exchange, including financial institutions).

A method to quantify scope 2 GHG emissions based on average energy generation emission factors for defined locations, including local, subnational, or national boundaries (WRI & WBCSD, 2015).

GHG reduction targets that are in line with what the latest climate science deems necessary to reach net-zero and limit warming to 1.5°C above pre-industrial levels at the global or sector level and that are achieved by 2050 at the latest.

While there is no internationally agreed upon definition for loss and damage, it usually refers to the negative effects of climate change that go beyond what people can adapt to (“hard limits” to adaptation), or where adaptation options exist but a community doesn’t have the resources to access or utilize them (“soft limits” to adaptation) (adapted from (WRI, 2022).

Targets that maintain the same emissions reductions reached after achieving a science-based target over time .

A method to quantify the scope 2 GHG emissions of a reporter based on GHG emissions emitted by the generators from which the reporter contractually purchases electricity bundled with contractual instruments, or contractual instruments on their own (WRI & WBCSD, 2015).

The accounting of companies’ GHG and non-GHG metrics associated with science-based targets. This may entail direct physical measurement of GHG emissions, estimating emissions or emissions reductions utilizing activity data and emission factors, calculating changes relevant to sustainable development, and collecting information about support for climate change mitigation (WRI, 2016).

A merger is an agreement that unites two existing companies into one new company.

A specific, unambiguous rule that must be met by a pathway, method, or criterion/standard to be compliant with a principle.

A mathematical formula or algorithm used to calculate benchmarks, expressed in terms of a target metric, which serves as the reference for entities to set targets.

Subordinated debt repaid after senior debtors are repaid in full. Mezzanine debt is often used in buyouts and thus can include embedded equity instruments (PitchBook, 2021).

A human intervention to reduce emissions or enhance the sinks of GHGs (IPCC, 2018).

The mitigation hierarchy consists of a hierarchy of steps, in the following order of priority: avoidance, GHG emissions reduction, contribution to climate mitigation beyond the value chain, and counterbalancing residual GHG emissions. An organization should prioritize actions to avoid releasing GHG emissions into the atmosphere and reduce GHG emissions when avoidance is not possible (GRI, 2023).

A set of measures planned and implemented by a company to avoid and reduce emissions or to remove and store GHG emissions from the atmosphere. Mitigation can occur within or beyond a company’s value chain.

This is a method for determining the scale of a beyond value chain mitigation (BVCM) pledge. Using this method, a company would allocate a share of revenue or profit towards funding climate mitigation beyond the value chain. The volume of finance deployed towards BVCM would be determined by the chosen denominator (e.g., profit or revenue) and the chosen percentage.

This is a method for determining the scale of a beyond value chain mitigation (BVCM) pledge. Using this method, a company would channel finance into BVCM based on predefined reference price of the unabated GHG emissions of that company in a defined period (e.g., in a given year or since the inception of the company). The volume of finance deployed towards BVCM would be determined by the chosen cost of carbon (e.g., a social cost of carbon or otherwise) and the unabated emissions in that defined period.

On-balance sheet loans used to purchase residential property, including multifamily properties with no limit on the number of units. This definition implies that the property is used for residential purposes.

Loans that are used to finance one or several motor vehicles.

Multi-strategy funds engage in a variety of investment strategies (Eurekahedge, 2021).

In contrast to headline claims, narrative claims are descriptive claims made to convey more detailed progress or status-based achievements, for example, describing actions undertaken or planned and sharing data about achievements made (Gold Standard, 2023).

Organizations that have the largest shares of their value held by their parent governments (Al-Fattah, 2013). Many large oil-producing countries have NOCs that control most or all of the oil industry activities in their domestic markets (McKinsey & Company, 2024).

A forest that is a natural ecosystem. Natural forests possess many or most of the characteristics of a forest native to the given site, including species composition, structure and ecological function. Natural forests include:(i) Primary forests that have not been subject to major human impacts in recent history.(ii) Regenerated (second growth) forests that were subject to major impacts in the past (for instance by agriculture, livestock raising, tree plantations or intensive logging) but where the main causes of impact have ceased or greatly diminished and the ecosystem has recovered much of the species composition, structure and ecological function of prior or other contemporary natural ecosystems. (iii) Managed natural forests where much of the ecosystem’s composition, structure, and ecological function exist in the presence of activities such as: harvesting of timber or other forest products, including management to promote high-value species and low intensity, small-scale cultivation within the forest, such as less-intensive forms of swidden agriculture in a forest mosaic. iv) Forests that have been partially degraded by anthropogenic or natural causes (e.g., harvesting, fire, climate change, invasive species, or others) but where the land has not been converted to another use and where degradation does not result in the sustained reduction of tree cover below the thresholds that define a forest or sustained loss of other main elements of ecosystem composition, structure and ecological function” (Accountability Framework initiative, 2019).

Nature-based Solutions (NbS) are "actions to protect, sustainably manage and restore natural and modified ecosystems in ways that address societal challenges effectively and adaptively, to provide both human well-being and biodiversity benefits” (IUCN, 2020). In some cases NbS can be Natural Climate Solutions (NCS) and be a form of land-based emissions reductions and/or removals. As such, NbS could count towards FLAG (forestry, land, and agriculture) targets or as BVCM (Beyond Value Chain Mitigation).

GHG reduction targets that are in line with what the latest climate science deems necessary to limit warming to 1.5°C above pre-industrial levels and that are achieved within a 5-10 year timeframe from the date of submission to the SBTi.

Removal of GHGs from the atmosphere by deliberate human activities, i.e., in addition to the removal that would occur via natural carbon cycle processes (IPCC, 2018).

Net zero emissions are achieved when anthropogenic emissions of GHGs to the atmosphere are balanced by anthropogenic removals over a specified period (IPCC, 2018).

A net-zero science-based target is a GHG mitigation target that implies:

• Reducing scope 1, 2, and 3 emissions to zero or a residual level consistent with reaching global net-zero emissions or at a sector level in eligible 1.5°C-aligned pathways; and
• Permanently neutralizing any residual emissions at the net-zero target year and any GHG emissions released into the atmosphere thereafter.

Measures that companies take to counterbalance the climate impact of unabatable (i.e., residual) GHG emissions which are released into the atmosphere at and after net-zero target date through permanent removal and storage of CO2 from the atmosphere.

The term “offsetting” refers to actions that a company takes to deliver mitigation outside of its value chain as a substitute for abatement of value chain emissions.

Oil tanker is a type of maritime vessel. It includes:

• Asphalt/Bitumen tanker
• Oil tanker
• Coal/Oil mixture tanker
• Crude oil tanker
• Crude/Oil products tanker
• Oil tanker, inland waterways
• Products tanker
• Shuttle tanker
• Tanker (unspecified)

The boundaries that determine the direct and indirect emissions associated with operations owned or controlled by the reporting company. This assessment allows a company to establish which operations and sources cause direct and indirect emissions, and to decide which indirect emissions to include that are a consequence of its operations (WRI & WBCSD, 2004).

A consolidation approach used for GHG inventories defined in the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard. A company has operational control over an operation if the former or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation (WRI & WBCSD, 2004).

Emissions associated with the operation of a building in its use stage.

취한 통합 접근 방식(자본, 운영 통제 또는 재무 통제 접근 방식)에 따라 보고 회사가 소유하거나 통제하는 운영을 결정하는 경계 (WRI & WBCSD, 2004).

An other liquid tanker is a type of maritime vessel. It includes:

• Alcohol tanker
• Caprolactam tanker
• Effluent carrier
• Fruit juice carrier, refrigerated
• Molasses tanker
• Water tanker
• Water tanker, inland waterways