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Glossary of terms

Sustainability and supply chain management come with a language of their own—filled with technical terms and endless acronyms. With regulations evolving and data requirements increasing, keeping up can be a challenge. That’s why we’ve created this glossary—to give you clear, concise definitions of the key terms you need to know. Because in a world with as many acronyms as supply chain checkpoints, clarity is everything.

General Sustainability & ESG Terms

A framework for evaluating a company's sustainability and ethical impact.

A measure of how well a company manages its environmental, social, and governance responsibilities.

The total greenhouse gas emissions caused by an organization, product, or individual.

The three categories of emissions that businesses are responsible for:
  • Scope 1: Direct emissions from owned or controlled sources.
  • Scope 2: Indirect emissions from purchased electricity, steam, heating, and cooling.
  • Scope 3: All other indirect emissions from a company’s supply chain.

The practice of making misleading claims about a company's environmental efforts.

Key Supply Chain & Reporting Terms

The ability to track and verify sustainability data across suppliers.

The process of assessing and managing risks in a company's supply chain, including environmental and human rights risks.

A process used to determine which ESG issues are most relevant to a business and its stakeholders.

A method that evaluates both financial materiality (how sustainability issues impact a company’s financial performance) and impact materiality (how the company affects the environment and society). Required under CSRD, this approach ensures that companies consider sustainability risks from both perspectives.

A method to evaluate the environmental impact of a product from raw materials to disposal.

First-hand data collected directly from suppliers, as opposed to estimates or third-party datasets.

Important Regulations & Frameworks

Mandates that companies identify, prevent, and mitigate sustainability risks, including environmental and human rights risks in their supply chains.

Expands ESG reporting requirements for large and medium-sized companies in the EU, emphasizing double materiality and requiring detailed sustainability disclosures.

Aims to prevent products linked to deforestation (such as soy, palm oil, and beef) from entering the EU market.

A classification system defining which economic activities qualify as environmentally sustainable, helping direct investments toward sustainable business practices.

The most widely used global standard for measuring and managing greenhouse gas (GHG) emissions, covering Scope 1, 2, and 3 emissions to help businesses track and reduce their carbon footprint.

A proposed EU law aimed at preventing greenwashing by requiring companies to substantiate environmental claims with verifiable, science-based evidence. This regulation will ensure that sustainability claims are accurate, comparable, and transparent, reducing misleading or vague eco-friendly messaging.

Strengthens consumer protection laws by increasing transparency in online marketplaces, price discounts, and sustainability claims. It also enforces stricter penalties for misleading consumers, including greenwashing, and requires verification of product reviews and rankings.

A global initiative that helps companies set science-based emissions reduction targets aligned with the Paris Agreement to limit global warming to 1.5°C or well below 2°C. Many businesses use SBTi to validate their climate strategies and demonstrate real progress in reducing greenhouse gas emissions.

Requires financial market participants to disclose ESG risks and impacts, ensuring greater transparency in sustainable investing.

A voluntary initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies, based on 10 principles related to human rights, labor, environment, and anti-corruption.

A European framework aimed at helping micro and small enterprises comply with sustainability regulations, simplifying reporting obligations and reducing administrative burdens.

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