Difference between revisions of "Glossary of Sustainable Finance"

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== Glossary of Sustainable Finance ==
 
== Glossary of Sustainable Finance ==
A collection of brief definitions of conceptual frameworks, tools or policy initiatives from public or private sectors that touch on the subject of [[Sustainable Finance]].  
+
A collection of definitions of conceptual frameworks, standards, tools and/or policy initiatives from public or private sectors that touch on the subject of [[Sustainable Finance]].  
  
''NB: The focus is strictly on terms and concepts that relate to financial activity, not the more general concept sustainability''
+
''NB: The focus is strictly on terms and concepts that relate to sustainable financial activities and not the quite more general concept of sustainability''
  
=== Named Initiatives, Classifications or Standards ===
+
=== High Level Concepts ===
* The scope column indicates the primary domain where the entry is operational
+
High level concepts around sustainable finance. There is substantial overlap between concepts (and some intrinsic vagueness).
 +
 
 +
{| class="wikitable sortable"
 +
|-
 +
!  Name !! Definition !!  Link
 +
|-
 +
|  Circular Economy    ||    A circular economy is an economic system aimed at eliminating waste and the continual use of resources    || [[wikipedia:Circular economy]]
 +
|-
 +
|  Green Finance    ||    Incorporating in the financial system the financial risks and opportunities presented by climate change and other environmental  challenges    ||          [https://www.gov.uk/government/publications/green-finance-strategy UK Green Finance]
 +
|-
 +
|  Blended Finance    ||  Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries  ||          [http://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/blended-finance.htm OECD]
 +
|-
 +
|  Sustainable Finance      ||    The provision of finance to investments taking into account environmental, social and governance considerations  ||      [https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance_en EU Sustainable Finance] 
 +
|-
 +
|  Sustainable Investment    ||  An approach to investment where environmental, social and governance factors, in combination with financial considerations, guide the selection and management of investments. The term overlaps strongly with Sustainable Finance  ||    GSI Alliance
 +
|-
 +
|  Impact Investment    ||    Investment made with the intention to generate positive, measurable social and environmental impact alongside a financial return ||    GIIN
 +
|-
 +
|  Triple Bottom Line    ||    A phrase first coined by John Elkington in 1994, it describes the separate financial, social and environmental ‘bottom lines’ of companies. In principle it is designed for companies to value their social and environmental profits and losses, as well as the financial ones. It consists of three Ps: profit, people and planet. Measures financial, social and environmental performance of a corporation over a period of time.  ||    [[wikipedia:Triple bottom line]]
 +
|}
 +
 
 +
=== Named Initiatives and Principles ===
 +
* The scope column indicates the primary domain where an entry is applicable
 
* The link provided aims to be to a definitive resource for each concept (if such exists), otherwise to the wikipedia entry. Usual disclaimers apply
 
* The link provided aims to be to a definitive resource for each concept (if such exists), otherwise to the wikipedia entry. Usual disclaimers apply
  
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|  GABV          ||  Global Alliance for Banking on Values  ||    A network of banking CEO's from around the world committed to advancing positive change in the banking sector  ||  Promotion of ESG themes ||  [http://www.gabv.org/  GABV Site]
 
|  GABV          ||  Global Alliance for Banking on Values  ||    A network of banking CEO's from around the world committed to advancing positive change in the banking sector  ||  Promotion of ESG themes ||  [http://www.gabv.org/  GABV Site]
 
|-  
 
|-  
| IPCC          ||  Intergovernmental Panel on Climate Change  ||    An intergovernmental body of the United Nations, dedicated to providing the world with an objective, scientific view of climate change, its natural, political and economic impacts and risks, and possible response options  ||  General  ||  [https://www.ipcc.ch/  IPCC Site]
+
| IPCC          ||  Intergovernmental Panel on Climate Change  ||    An intergovernmental body of the United Nations, dedicated to providing the world with an objective, scientific view of climate change, its natural, political and economic impacts and risks, and possible response options  ||  General  ||  [https://www.ipcc.ch/  IPCC Site]
 
|-  
 
|-  
| NGFS  ||  Network for Greening the Financial System    ||  Group of Central Banks and Financial Supervisors    ||  Micro/Macro prudential policy development    || [https://www.banque-france.fr/en/financial-stability/international-role/network-greening-financial-system/about-us Banque de France Website ]  
+
| NGFS  ||  Network for Greening the Financial System    ||  Group of Central Banks and Financial Supervisors    ||  Micro/Macro prudential policy development    || [https://www.banque-france.fr/en/financial-stability/international-role/network-greening-financial-system/about-us Banque de France Website ]  
 
|-  
 
|-  
| GCF  ||  Green Climate Fund    ||  A global fund created to support the efforts of developing countries to respond to the challenge of climate change    ||  The Fund’s investments can be in the form of grants, loans, equity or guarantees    || [https://www.greenclimate.fund/who-we-are/about-the-fund GCF Website ]  
+
| GCF  ||  Green Climate Fund    ||  A global fund created to support the efforts of developing countries to respond to the challenge of climate change    ||  The Fund’s investments can be in the form of grants, loans, equity or guarantees    || [https://www.greenclimate.fund/who-we-are/about-the-fund GCF Website ]  
 
|-  
 
|-  
| CCFLA ||  Cities Climate Finance Leadership Alliance    ||  A multi-level and multi-stakeholder coalition aimed at closing the investment gap for urban subnational climate projects and infrastructure    ||  Knowledge exchange around urban development, climate action, and/or financing    || [https://www.citiesclimatefinance.org CCFLA Website ]  
+
| CCFLA ||  Cities Climate Finance Leadership Alliance    ||  A multi-level and multi-stakeholder coalition aimed at closing the investment gap for urban subnational climate projects and infrastructure    ||  Knowledge exchange around urban development, climate action, and/or financing    || [https://www.citiesclimatefinance.org CCFLA Website ]
 +
|-
 +
| CFLI ||  Climate Finance Leadership Initiative || Senior executives of seven major private-sector institutions from across the investment chain. Supporting global mobilization of private finance in response to the challenge of climate change || General Investments ||  [https://www.bloomberg.com/cfli Bloomberg CFLI Page]
 +
|-
 +
| GBI ||  Green Bonds Initiative  ||  The Climate Bonds Initiative is an international organisation working to mobilize  bond market, for climate change solutions ||  Bond Markets || [https://www.climatebonds.net/about Green Bonds Initiative Website]
 
|-  
 
|-  
 
|  GISD ||  Global Investors for Sustainable Development Alliance  ||  Group of 30 CEOs of major financial institutions and corporations spanning all the regions of the world    ||  Mobilization    || [https://www.un.org/esa/ffd/ffd-follow-up/global-investors-for-sustainable-development-alliance.html UN Website ]  
 
|  GISD ||  Global Investors for Sustainable Development Alliance  ||  Group of 30 CEOs of major financial institutions and corporations spanning all the regions of the world    ||  Mobilization    || [https://www.un.org/esa/ffd/ffd-follow-up/global-investors-for-sustainable-development-alliance.html UN Website ]  
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|-  
 
|-  
 
|  EP            || Equator Principles      ||    A risk management framework  for determining, assessing and managing environmental and social risk in project finance                ||    Project Finance        || [https://equator-principles.com/ Equator Principles ]
 
|  EP            || Equator Principles      ||    A risk management framework  for determining, assessing and managing environmental and social risk in project finance                ||    Project Finance        || [https://equator-principles.com/ Equator Principles ]
|-
 
|  ISO 26000  || Guidance on social responsibility      ||    A voluntary guidance standard on how businesses and organizations can operate in a socially responsible way              ||    Social Responsibility          ||  [https://www.iso.org/iso-26000-social-responsibility.html ISO 26000]
 
|-
 
|  ISO 14001  || Environmental management systems      ||    A standard intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability  || Environmental Standards Certification    ||  [https://www.iso.org/iso-14001-environmental-management.html ISO 14001]
 
|-
 
| ISO 14090  || Adaptation to climate change      ||    Principles, requirements and guidelines  || Environmental Standards Certification    ||  [https://www.iso.org/standard/68507.html ISO 14090]
 
 
|-  
 
|-  
 
| ARISE  || Association for Responsible Investment Services    ||  A voluntary quality standard for sustainability research providers  || Sustainability Research    ||  [http://www.aristastandard.org/content/home.html  ARISE Website]
 
| ARISE  || Association for Responsible Investment Services    ||  A voluntary quality standard for sustainability research providers  || Sustainability Research    ||  [http://www.aristastandard.org/content/home.html  ARISE Website]
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|}
 
|}
  
=== High Level Concepts ===
+
=== Standards ===
High level concepts around sustainable finance. There is substantial overlap between concepts (and some intrinsic vagueness).
 
  
 
{| class="wikitable sortable"
 
{| class="wikitable sortable"
 
|-  
 
|-  
! Name !! Definition !!  Link
+
! Acronym !! Name !! Definition !! Scope !!  Link
 
|-  
 
|-  
Circular Economy    ||    A circular economy is an economic system aimed at eliminating waste and the continual use of resources     || [[wikipedia:Circular economy]]
+
ISO 26000  || Guidance on social responsibility      ||    A voluntary guidance standard on how businesses and organizations can operate in a socially responsible way              ||     Social Responsibility          || [https://www.iso.org/iso-26000-social-responsibility.html ISO 26000]
 
|-  
 
|-  
Green Finance    ||    Incorporating in the financial system the financial risks and opportunities presented by climate change and other environmental  challenges    ||         [https://www.gov.uk/government/publications/green-finance-strategy UK Green Finance]
+
ISO 14001  || Environmental management systems      ||    A standard intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability || Environmental Standards Certification    ||  [https://www.iso.org/iso-14001-environmental-management.html ISO 14001]
 
|-  
 
|-  
Blended Finance    ||   Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries  ||         [http://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/blended-finance.htm OECD]
+
| ISO 14090 || Adaptation to climate change      ||     Principles, requirements and guidelines || Environmental Standards Certification    || [https://www.iso.org/standard/68507.html ISO 14090]
|-
 
| Sustainable Finance      ||   The provision of finance to investments taking into account environmental, social and governance considerations  ||     [https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance_en EU Sustainable Finance] 
 
|-
 
|  Sustainable Investment    ||  An approach to investment where environmental, social and governance factors, in combination with financial considerations, guide the selection and management of investments. The term overlaps strongly with Sustainable Finance  ||    GSI Alliance
 
|-
 
|  Impact Investment    ||    Investment made with the intention to generate positive, measurable social and environmental impact alongside a financial return ||    GIIN
 
|-
 
|  Triple Bottom Line    ||    A phrase first coined by John Elkington in 1994, it describes the separate financial, social and environmental ‘bottom lines’ of companies. In principle it is designed for companies to value their social and environmental profits and losses, as well as the financial ones. It consists of three Ps: profit, people and planet. Measures financial, social and environmental performance of a corporation over a period of time.  ||    [[wikipedia:Triple bottom line]]
 
 
|}
 
|}
  
 
=== Tools ===
 
=== Tools ===
Concrete metrics, financial products or other tools that are already implemented / available in some form ('''NB: VERY INCOMPLETE'. WIP.'')
+
Concrete Metrics, Financial Products or other Tools that are implemented / available in some form ('''NB: VERY INCOMPLETE'. WIP.'')
  
 
{| class="wikitable sortable"
 
{| class="wikitable sortable"
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!  Name !! Description  !!  Link
 
!  Name !! Description  !!  Link
 
|-  
 
|-  
|  [https://www.climatebonds.net/about Green Bonds Initiative]   ||   Climate Bonds Initiative is an international organisation working to mobilize  bond market, for climate change solutions
+
[[Green Bond Principles]]    ||  Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits  ||    [https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ International Capital Market Association ]
|  [[Green Mortgage]]   ||   Initiatives that link real estate financing terms to its ecological footprint
+
|-
 +
|  [[Green Loan Principles]]   || The green loan market aims to facilitate and support environmentally sustainable economic activity ||    [https://www.lma.eu.com/documents-guidelines/documents/category/green--sustainable-finance Loan Market Association ]
 
|-  
 
|-  
 
|  Positive Screening    ||  Investment in sectors, companies or projects selected from a defined universe for positive ESG performance relative to industry peers  ||    GSI Alliance
 
|  Positive Screening    ||  Investment in sectors, companies or projects selected from a defined universe for positive ESG performance relative to industry peers  ||    GSI Alliance
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|-  
 
|-  
 
|  Norms-Based Screening    ||  Screening of investments based on compliance with international norms and standards such as those issued by the OECD, ILO, UN and UNICEF; may include exclusions of investments that are not in compliance with norms or standards or over and underweighting.  ||    GSI Alliance
 
|  Norms-Based Screening    ||  Screening of investments based on compliance with international norms and standards such as those issued by the OECD, ILO, UN and UNICEF; may include exclusions of investments that are not in compliance with norms or standards or over and underweighting.  ||    GSI Alliance
 +
|-
 +
|  [[Green Mortgage]]  ||  Initiatives that link real estate financing terms to its ecological footprint ||
 
|}
 
|}
  

Revision as of 17:05, 15 January 2020

Glossary of Sustainable Finance

A collection of definitions of conceptual frameworks, standards, tools and/or policy initiatives from public or private sectors that touch on the subject of Sustainable Finance.

NB: The focus is strictly on terms and concepts that relate to sustainable financial activities and not the quite more general concept of sustainability

High Level Concepts

High level concepts around sustainable finance. There is substantial overlap between concepts (and some intrinsic vagueness).

Name Definition Link
Circular Economy A circular economy is an economic system aimed at eliminating waste and the continual use of resources wikipedia:Circular economy
Green Finance Incorporating in the financial system the financial risks and opportunities presented by climate change and other environmental challenges UK Green Finance
Blended Finance Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries OECD
Sustainable Finance The provision of finance to investments taking into account environmental, social and governance considerations EU Sustainable Finance
Sustainable Investment An approach to investment where environmental, social and governance factors, in combination with financial considerations, guide the selection and management of investments. The term overlaps strongly with Sustainable Finance GSI Alliance
Impact Investment Investment made with the intention to generate positive, measurable social and environmental impact alongside a financial return GIIN
Triple Bottom Line A phrase first coined by John Elkington in 1994, it describes the separate financial, social and environmental ‘bottom lines’ of companies. In principle it is designed for companies to value their social and environmental profits and losses, as well as the financial ones. It consists of three Ps: profit, people and planet. Measures financial, social and environmental performance of a corporation over a period of time. wikipedia:Triple bottom line

Named Initiatives and Principles

  • The scope column indicates the primary domain where an entry is applicable
  • The link provided aims to be to a definitive resource for each concept (if such exists), otherwise to the wikipedia entry. Usual disclaimers apply


Acronym Name Definition Scope Link
CSR Corporate Social Responsibility International private business self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature or by engage in or support volunteering or ethically-oriented practices Corporate Supply Chains wikipedia:Corporate social responsibility
ESG Environmental, Social and Governance A set of factors measuring the sustainability and ethical impact of an investment in a company or business Investments wikipedia:Environmental, social and corporate governance
SDG Sustainable Development Goals A collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030 General Sustainable Development
SRI Socially Responsible Investing Investments strategies that avoid certain sectors and favor certain other sectors or practices Investments (esp Funds) wikipedia:Socially responsible investing
PRI Principles for Responsible Investment An international network of investors working together to put the six principles into practice General Investments UNEPFI Site
PRB Principles for Responsible Banking Six Principles for Responsible Banking (Signed by an international network of banks) General Banking UNPRI Site
PCAF Partnership for Carbon Accounting Financials An industry-led partnership to facilitate transparency and accountability of the financial sector to the Paris Agreement A range of bank held assets (focus on GHG accounting) PCAF Site
GABV Global Alliance for Banking on Values A network of banking CEO's from around the world committed to advancing positive change in the banking sector Promotion of ESG themes GABV Site
IPCC Intergovernmental Panel on Climate Change An intergovernmental body of the United Nations, dedicated to providing the world with an objective, scientific view of climate change, its natural, political and economic impacts and risks, and possible response options General IPCC Site
NGFS Network for Greening the Financial System Group of Central Banks and Financial Supervisors Micro/Macro prudential policy development Banque de France Website
GCF Green Climate Fund A global fund created to support the efforts of developing countries to respond to the challenge of climate change The Fund’s investments can be in the form of grants, loans, equity or guarantees GCF Website
CCFLA Cities Climate Finance Leadership Alliance A multi-level and multi-stakeholder coalition aimed at closing the investment gap for urban subnational climate projects and infrastructure Knowledge exchange around urban development, climate action, and/or financing CCFLA Website
CFLI Climate Finance Leadership Initiative Senior executives of seven major private-sector institutions from across the investment chain. Supporting global mobilization of private finance in response to the challenge of climate change General Investments Bloomberg CFLI Page
GBI Green Bonds Initiative The Climate Bonds Initiative is an international organisation working to mobilize bond market, for climate change solutions Bond Markets Green Bonds Initiative Website
GISD Global Investors for Sustainable Development Alliance Group of 30 CEOs of major financial institutions and corporations spanning all the regions of the world Mobilization UN Website
EU Taxonomy EU Sustainable Finance Taxonomy A list of economic activities which can make a substantial contribution to climate change mitigation and criteria to do no significant harm to other environmental objectives Asset Manager Disclosures EC Website
TCDF Task Force on Climate-related Financial Disclosures Voluntary climate-related financial risk disclosures for use by companies Financial Reports FSB-TCFD
EP Equator Principles A risk management framework for determining, assessing and managing environmental and social risk in project finance Project Finance Equator Principles
ARISE Association for Responsible Investment Services A voluntary quality standard for sustainability research providers Sustainability Research ARISE Website
GRI Global Reporting Initiative An independent international organization promoting standards around sustainability reporting Sustainability Reporting GRI Website

Standards

Acronym Name Definition Scope Link
ISO 26000 Guidance on social responsibility A voluntary guidance standard on how businesses and organizations can operate in a socially responsible way Social Responsibility ISO 26000
ISO 14001 Environmental management systems A standard intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability Environmental Standards Certification ISO 14001
ISO 14090 Adaptation to climate change Principles, requirements and guidelines Environmental Standards Certification ISO 14090

Tools

Concrete Metrics, Financial Products or other Tools that are implemented / available in some form ('NB: VERY INCOMPLETE'. WIP.)

Name Description Link
Green Bond Principles Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits International Capital Market Association
Green Loan Principles The green loan market aims to facilitate and support environmentally sustainable economic activity Loan Market Association
Positive Screening Investment in sectors, companies or projects selected from a defined universe for positive ESG performance relative to industry peers GSI Alliance
Negative Screening The exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria. GSI Alliance
Norms-Based Screening Screening of investments based on compliance with international norms and standards such as those issued by the OECD, ILO, UN and UNICEF; may include exclusions of investments that are not in compliance with norms or standards or over and underweighting. GSI Alliance
Green Mortgage Initiatives that link real estate financing terms to its ecological footprint

Risks

Risks associated with (un)-Sustainable Finance.

Name Definition Link
Climate-Related Risk The potential negative impacts of Climate Change on a financial institution FSB-TCFD
Stranded Assets The premature writeoff of assets incompatible with a sustainable economy
ESG Risk Risk derived from noncompliance with environmental, social, or governance criteria GIIN
Impact Risk The possibility that the investment does not achieve the desired social or environmental benefits GIIN
Greenwashing Green themed public relations or marketing that ideceptively used to promote the perception an organization's products, aims or policies are environmentally friendly. wikipedia:Greenwashing Wikipedia

Other Glossaries


Contributors to this article

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