Glossary

An entity that has one or more subsidiaries (WRI & WBCSD, 2011).

Legally binding international treaty on climate change adopted within the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015. The Paris Agreement commits participating countries to limit global temperature rise to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C, adapt to changes already occurring, and regularly increase efforts over time.

A passenger-kilometer, abbreviated as “pkm”, is the unit of measurement representing the transport of one passenger by a defined mode of transport (road, rail, air, sea, inland waterways etc.) over one kilometer.

A quantitative trajectory of change in a climate-relevant metric over time, based on an internally consistent set of assumptions about key drivers, such as patterns of economic and population growth and technology development.

Payments for ecosystem services is the name given to a variety of arrangements through which the beneficiaries of environmental services, from watershed protection and forest conservation to carbon sequestration and landscape beauty, reward those whose lands provide these services with subsidies or market payments (WWF, 2024).

In the context of science-based targets, performance refers to the assessment of metrics specified in approved targets - between target and base years - against multiple parameters, which include: target boundaries, target language, applicable criteria valid at the time of target approval, target setting methods, data quality, GHG accounting requirements and sector-specific requirements.

The longevity of a carbon pool and the stability of its stocks, given the management and disturbance environment in which it occurs.

Phase-out indicates the time bound commitment to cessation of additional new infrastructure related to the resource as well as the reduction of production from an asset to zero over a period of time.

A metric describing the emissions per physical unit of an activity (e.g., tonne CO2e / tonne of cement production).

The polluter pays principle set out in the 1992 Rio Declaration signifies that those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment.

A company or entity invested in or loaned to by a financial institution.

An overarching statement that guides SBTi’s technical developments.

This asset class includes all loans to private companies (i.e., those that do not have equity listed and traded on a stock exchange, including financial institutions) as well as investments in debt securities without known use of proceeds (regardless of how they are traded) that are issued by private companies.

This asset class includes all investments in equity securities (regardless of how they are traded) that are issued by private companies (i.e., those that do not have equity listed and traded on a stock exchange, including financial institutions).The term is also used to refer to the private equity fund management industry, which is the raising and investment of funds consisting principally of third-party institutional capital into the share capital of private companies. A private equity fund, distinct from a venture capital fund, will typically take large minority (30%+) or majority equity positions in relatively mature companies.

A private equity fund management firm. Private equity fund manager, private equity firm, and general partner are terms that are commonly used interchangeably.

Medium to long-term finance provided in return for an equity stake in unlisted companies. As well as investment in more mature companies through buyouts, private equity direct investments can be broken down into growth capital and venture capital, for less mature and/or smaller businesses (British Private Equity and Venture Capital Association, 2021).

Advancement towards achieving an established target prior to the target year and after the base year. Progress refers to actions and/or improvements in performance that demonstrate, or serve as credible proxies for, positive change towards fulfilling commitments (SBTi & EY, 2023).

Asset class that includes loan or equity with known use of proceeds that is designated for a clearly defined activity or set of activities, such as the construction of a gas-fired power plant, a wind or solar project, or energy efficiency projects.

Countries established the “REDD+” framework to protect forests as part of the Paris Agreement. “REDD” stands for reducing emissions from deforestation and forest degradation in developing countries. The “+” stands for additional forest-related activities that protect the climate, namely sustainable management of forests and the conservation and enhancement of forest carbon stocks. Under the framework with these REDD+ activities, developing countries can receive results-based payments for emission reductions when they reduce deforestation.

Property consisting of land and resources attached to it. In the context of the Financial Sector Guidance and Private Equity Sector Guidance, real estate refers to loans and/or investments related to service and residential buildings (Investopedia, 2022).

The most common real estate debt strategy is direct lending for real estate acquisitions. This includes buying and selling securitized real estate loans in the secondary market (PitchBook, 2023).

The regrowth of forests after a temporary (less than 10 years) condition with less than 10% canopy cover due to human-induced or natural perturbations.

Refrigerated bulk is a type of maritime vessel. It includes:

• Refrigerated cargo ship

Presenting data to internal management and external users, such as regulators, shareholders, the general public or specific stakeholder groups, of GHG and non-GHG metrics associated with a science-based target or targets (adapted from (WRI & WBCSD, 2004).

Residual emissions represent the emissions that cannot be completely eliminated despite implementing all available mitigation measures contemplated in pathways that limit warming to 1.5°C with no or limited overshoot. In the context of science-based targets, residual emissions refer to the company’s scope 1, scope 2 and scope 3 emissions that remain once its long-term emissions reduction target has been achieved.

An emission from a carbon pool that stores carbon associated with a removal that was previously reported by the reporting company (Greenhouse Gas Protocol, 2022).

Roll on/off (RoRo) is a type of maritime vessel. It includes:

• Container/RoRo cargo ship
• Infantry landing craft
• Landing craft
• Landing ship (dock type)
• Rail vehicles carrier
• RoRo cargo ship
• RoRo cargo ship, inland waterways

The specific process for validation of science-based targets for SMEs.

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.

A process of analyzing future events by considering alternative possible outcomes.

A carbon price that represents the economic value of GHG emissions. The SBTi considers science-based carbon prices to be those which are based on: 

(a) robust scientific assessment of the external cost of GHG emissions (the costs of emissions that the public pays for, such as damage to crops, health care costs from heat waves and droughts, and loss of property from flooding and sea level rise); 

(b) robust scientific assessment of the expected costs associated with achieving a 1.5°C pathway, and/or 

(c) the true and complete cost to fully and permanently abate a given GHG emission.

Corporate targets to mitigate GHG emissions that are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to pursue efforts to limit warming to 1.5°C.

Advisory body to the SBTi consisting of recognized experts in climate change mitigation, integrated assessment modeling, energy system and land-use dynamics, and other topics contributing to developing the SBTi’s scientific foundations.

Term used in GHG accounting to indicate the classification of an organization’s GHG emissions according to the GHG Protocol Corporate Standard (WRI & WBCSD, 2004).

Direct GHG emissions from operations owned or controlled by the reporting company.

Indirect GHG emissions associated with the generation of purchased or acquired electricity, steam, heating or cooling consumed by the reporting company.

Fifteen distinct categories as defined by the Greenhouse Gas Protocol (WRI & WBCSD, 2011) intended to provide companies with a systematic framework to organize, understand, and report on the variety of scope 3 activities within a corporate value chain.

Indirect GHG emissions (other than those covered in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

A secondary interest is an ownership position in an existing fund which may or may not be fully invested but has not been fully exited and wound up. Such interests are usually transferable, subject to certain conditions, and a secondary market has grown up to cater for such transactions, a number of specialist firms having been set up for the purpose (Fraser-Sampson, 2010).

The sector-specific absolute reduction method assigns to companies the same percentage of absolute emission reductions as is required for the sector selected within a given time period.

Method used to calculate emissions intensity targets based on the principle of converging to a sector-wide physical emissions intensity in a future year of a mitigation pathway. Also referred to as “physical intensity convergence” or “Sectoral Decarbonization Approach (SDA)”.

An energy or carbon intensity metric that uses a physical unit as a denominator and is applicable to a specific sector. Examples include kgCO2/MWh (power), MWh/m2 (real estate), etc.

Absolute emissions or emissions intensity pathways for a specific sector that may be used for calculating near-term and long-term intensity targets—as well as long-term absolute targets, in most cases.

A qualitative and/or quantitative criterion used to define any significant change to the data, inventory boundary, methods, or any other relevant factors (WRI & WBCSD, 2004).

Any biological or technological process, activity or mechanism that removes GHGs from the atmosphere (Greenhouse Gas Protocol, 2022).

Businesses that maintain revenues, assets, or a number of employees below a certain threshold.

Estimated as the net present value of climate change impacts over the next 100 years (or longer) of one additional metric ton of carbon emitted to the atmosphere today; the marginal global damage costs of carbon emissions (Defra, 2005).

Document that provides a set of criteria and/or guidelines established by an authority, organization, or consensus, to ensure uniformity, consistency, and interoperability in a particular context.

Statistical land use change (sLUC) is a measure of carbon stock loss due to recent (previous 20 years or more) land conversion, related to a specific land use, within an area or jurisdiction. sLUC can serve as a proxy for dLUC where specific sourcing lands are unknown or when there is no information on the previous states of the sourcing lands.

A change in the organizational or operational boundaries of a company that results in the transfer of ownership or control of emissions from one company to another. Structural changes usually result from a transfer of ownership of emissions, such as mergers, acquisitions and divestitures, but can also include outsourcing/insourcing (WRI & WBCSD, 2004).