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
Adaptation	Any efforts to adjust economies to the physical impacts of climate change
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 order is not important
The year column indicates when the initiative was formally launched. Many principles have evolved organically without a clearcut date.
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	Year	Definition	Scope	Link
COP21	Paris Agreement	2015	The first-ever universal, legally binding global climate change agreement, adopted at the Paris climate conference in December 2015	General	EU Site
CSR	Corporate Social Responsibility	N/A	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 (criteria) 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	2015	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	N/A	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	2005	An international network of investors working together to put the six principles into practice	General Investments	UNEPFI Site
PSI	Principles for Sustainable Insurance	2012	A global framework for the insurance industry toaddress environmental, social and governance (ESG) risks and opportunities and a global initiative to strengthen the insurance industry’s contribution as risk managers, insurers and investors to building resilient, inclusive and sustainable communities and economies	Insurance	UNEPFI Site
PRB	Principles for Responsible Banking	2019	Six Principles for Responsible Banking (Signed by an international network of banks)	General Banking	UNPRI Site
PCAF	Partnership for Carbon Accounting Financials	2015	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	2009	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	1988	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	2017	Group of Central Banks and Financial Supervisors	Micro/Macro prudential policy development	Banque de France Website
GCF	Green Climate Fund	2010	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	2014	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
C40	Cities Climate Leadership Group	2005	A group of 96 cities around the world focused on tackling climate change and driving urban action that reduces greenhouse gas emissions and climate risks	Rechnical assistance; facilitation of peer-to-peer exchange; and research, knowledge management & communications	C40 Website
CFLI	Climate Finance Leadership Initiative	2018	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	2010	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	2019	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	2019	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	2015	Voluntary climate-related financial risk disclosures for use by companies	Financial Reports	FSB-TCFD
NFRD	Non-Financial Reporting Directive	2014	The directive lays down the rules on disclosure of non-financial and diversity information by large companies operating in the European Union	Disclosures	EC Website
EP4	Equator Principles	2003	A risk management framework for determining, assessing and managing environmental and social risk in project finance (2019 Update)	Project Finance	Equator Principles Site
NCP	Natural Capital Protocol	2016	A standardised framework for organisations to identify, measure and value their direct and indirect impacts and dependencies on natural capital	General	NCP Site
PP	Poseidon Principles	2019	A framework for assessing and disclosing the climate alignment of ship finance portfolios	Shipping Finance	Poseidon Principles Site
SOE	Sustainable Ocean Economy	N/A	An economy where humanity effectively safeguards marine and coastal ecosystems, uses ocean resources such as seafood in a sustainable way, and ensures that benefits from the ocean and ocean industries are shared fairly and can last into the future
ARISE	Association for Responsible Investment Services	N/A	A voluntary quality standard for sustainability research providers	Sustainability Research	ARISE Website
GRI	Global Reporting Initiative	1997	An independent international organization promoting standards around sustainability reporting	Sustainability Reporting	GRI Website
SFDR	Sustainable Finance Disclosure Regulation	2019	Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector	Sustainability Disclosures	EUR-Lex
SBTi	Science Based Targets initiative	2018	The initiative’s overall aim is that by 2020, science-based target setting will become standard business practice and corporations will play a major role in driving down global greenhouse gas emissions.	Sustainability Targets by Corporations	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
Stakeholder Capitalism Metrics	A set of disclosed metrics that can be used by businesses to align their reporting on performance against ESG indicators and track their contributions towards the SDGs on a consistent basis.	WEF

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 Risks	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

Forums

Glossary of Sustainable Finance

Contents