Terms, Guidelines and Standards
… for sustainable business
Terms
Carbon Offsetting is the offsetting or compensation of CO2 emissions. This can be done internally or through outsourcing, i.e. with the help of carbon offset programs by other organizations with the help of reforestation, for example.
The Circular Economy describes a coherent system in which the use of resources and the use of waste are interrelated in a kind of recyclable material cycle. The aim is to reduce or conserve the use of raw materials by using more or only recycled materials. It also includes other aspects such as repair instead of direct disposal.
These are the two types of action measures on how we humans can cope or manage climate change.
Climate Mitigation refers to the mitigation of factors that cause and drive climate change, mainly greenhouse gas emissions. Here, the focus is on preventing climate change from occurring (i.e., to "take precautions"). Emissions are either prevented, reduced or offset by specific measures (i.e. carbon offsetting).
Climate Adaptation is about adapting to the climate damage and changes that are already occurring. If the climate in a region has already changed drastically, measures for adaptation here would be, for example, adequate house construction (e.g. due to more flooding) or adaptation of local agriculture with more suitable crops.
Mitigation should always be seen as a priority, because it is intended to prevent damage from occurring while the damage has already occurred during adaptation.
The concept of Climate Neutrality describes the state in which human activities have no effect (neither negative nor positive) on the Earth's climate system. This implies that remaining emissions (of all harmful substances) are removed and thus neutralized (Greenhouse Gas Neutrality) and that, in addition, account is taken of the regional and local natural effects of human activities (e.g. influence on vegetation changes, droughts due to significant water consumption), for example on the local climate.
Corporate Social Responsability (CSR) is the social responsibility of companies in the sense of sustainable business. It is based on the idea of maximizing positive effects for society and stakeholders and minimizing negative influences.
Environment, Social and Governance (ESG) is often used in analogy to the term sustainability or CSR and is based on the three areas of environment, social and governance. There are no generally applicable laws or guidelines for all companies; which criteria or indicators fall under the three areas must be determined and defined in each case. There are various guidelines and manuals for this purpose (see Standards & Guidelines).
ESG originally comes from the financial and investment sector and is used here to evaluate sustainable investments on the basis of various criteria.
The most common Greenhouse Gases are those defined by the Kyoto Protocol (1997):
- Carbon Dioxide (CO2)
- Methane (CH4)
- Nitrous Oxide (N2O)
- Halogenated Hydrofluorocarbons (H-FKW)
- Hydrofluorocarbons (FKW)
- Sulfur Hexafluoride (SF6)
These are gases that provide the Earth's greenhouse gas effect and are largely responsible for the rise in global temperatures. There are other greenhouse gases as well, but the six mentioned are the most relevant. All gases have a different effect on global warming (Global Warming Potential GWP). The effect is expressed in CO2 equivalents. Methane, for example, would be around 30 CO2 equivalents (depending on the source), which is 30 times more GWP than CO2.
Human Rights Due Diligence. Compliance with human rights in all operations of the company. Also occurs in the CSRD (see Standards & Guidelines) of the EU Commission.
Life Cycle Assessment (LCA) is a procedure to record and evaluate environmentally relevant processes. Originally developed primarily to evaluate products, it is now also applied to processes, services and behaviors. It is defined internationally in the ISO standards (1404) and is one of the most important instruments for quantifying the environmental impact (of various kinds) of a product, service, etc. The advantage is that the entire product life cycle and value chains are included (also: product life cycle analysis).
The objective of the Materiality Assessment is to identify key issues, problems, challenges, measures, etc., for the company in question. The topics are arranged in a matrix in which the relative importance for the stakeholders is shown on the Y-axis and the impact or importance for the company is shown on the X-axis. This method is used to illustrate and prioritize the topics, especially in the area of sustainability, in order to be able to define subsequent strategies and precise measures. The materiality analysis is a mandatory part of the GRI Reporting Guidelines and also of the CSRD.
Brundtland Report of 1987
The 1987 Report of the Brundtland Commission (also known as the World Commission on Environment and Development) was the first to formulate and define the concept of Sustainable Development. This report laid the foundation for worldwide conversations and brought the issue of Sustainability to public attention.
The Brundtland Commission defined the term "sustainable development" even then as follows:
"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs and choose their own lifestyles."
Enquete Commission "Protection of People and the Environment: Goals and Framework Conditions" from 1998
The Commission's guiding principle for sustainable and future-compatible development provides for three dimensions (three pillars) for which the Commission recommends and developed basic rules. These are composed of the ecological, economic and social dimensions.
The procedure for integrating these areas should no longer, as in the past, consider only one sub-area and ignore the others, but should identify and take into account the interrelationships and interactions between the three dimensions and the objective.
Guidelines and Standards
The Corporate Sustainability Reporting Directive (CSRD) is an EU directive on CSR reporting. The draft was published on 04/21/2021. This is an edit of the "Non-Financial Reporting Directive" (NFRD). After adoption at EU level, the directive must be converted into national law by 12/01/2022. In the future, material issues are to be determined both by their significance for the company and by the impact of its own business activities.
It applies:
- from January 1, 2024 for companies already subject to the NFRD (first reporting in 2025)
- from January 1, 2025 for large companies not currently subject to the NFRD (first report in 2026)
- from January 1, 2026 for listed SMEs and small and non-complex credit institutions and captive insurance companies (first report 2027) with an opt-out until 2028
The European Green Deal includes the European Commission's goal and actions to become the first climate neutral continent by 2050. It was published in December 2019. Among other things, it also includes a goal of decoupling economic growth from resource use as part of a resource-efficient and competitive economy.
The German Sustainability Code includes guidelines for the structure of a sustainability report and the creation of sustainability strategies. The Code includes 20 disclosure criteria, including strategy, human and labor rights, resources, compliant behavior, and more.
The criteria and indicators were selected from GRI and EFFAS.
The Greenhouse Gas Protocol is an international and globally recognized framework for calculating and reporting greenhouse gas emissions. It can be used at the corporate level and includes:
- Scope 1 – emissions produced in-house from manufacturing operations
- Scope 2 – emissions from purchased energy
- Scope 3 – emissions that occur along the value chain
Scope 1 and 2 emissions are mandatory, Scope 3 is optional. It is the most widely used Greenhouse Gas Accounting Framework worldwide.
Global Reporting Initiative (GRI, Reporting Standards) provide guidelines for any organization for understanding and disclosing economic, environmental and social impacts. It is the most globally recognized and standardized guide and can be applied to any company or organization.
The three Universal Standards (Foundation, General Disclosure and Management Approach) apply to all reporting entities. In addition, there are "Sector Standards" for specific industries. Many of these are still under development.
There are also the "Topic Standards"
- economic topics (governance, taxes, corruption, etc.)
- environmental topics (energy, use of raw materials, emissions, etc.)
- social and societal topics (education, health & safety, right of assembly, etc.)
The Intergovernmental Panel on Climate Change (IPCC) is an institution of the United Nations. In its regular reports, the current state of knowledge on climate change is compiled and evaluated by international experts. It forms the scientific basis for many (political) decisions.
International Labour Organization (ILO) is an international organization that brings together companies, governments and workers to develop global labor standards and policies and to fight for decent working conditions.
ISO 1400-X standards: Environmental Management Systems
ISO 1402-X standards: Environmental labels, declarations and labels:
- Type I environmental labels: ISO 14024
Certain third-party environmental labels that distinguish particular environmental performance and effects, e.g. "Blue Angel" or "natureplus".
Aimed mostly at (end) consumers. - Type II environmental labels: ISO 14021
These are non-binding and flexible self-declarations by companies and manufacturers.
They choose themselves which environmental information they declare, and there is no verification by a third party. - Type III eco-label: ISO 14025
Regulates environmental product declarations, a standardized third-party verified declaration of a product's environmental impact (mainly applied in Germany in the construction industry).
ISO 1404-X standards: Life Cycle Assessment
ISO 26000: Social Responsibility
The Kyoto Protocol was the first international legally binding limit on greenhouse gas emissions. The industrialized countries concerned were supposed to reduce their GHG emissions by 5.2% in the period from 2008 to 2012 compared to 1990. In the meantime, 191 countries and the EU as an economic organization have ratified ("put into force") the Protocol.
The Paris Agreement (or Paris Climate Agreement) was adopted in 2015 at the United Nations Climate Change Conference (COP 21). Under the agreement, 195 countries pledged to curb climate change and transform the global economy in a climate-friendly way. Specifically, the agreement states that the global temperature increase should be limited to 1.5 degrees Celsius if possible, but in any case to well below two degrees Celsius compared to the pre-industrial era.
Guideline from Social Accountability International (SAI), which focuses on social compliance in companies. Audit by the non-governmental organization for compliance with human rights in the workplace.
Accordingly, the following categories are audited:
- Child Labor
- Forced or Compulsory Labor
- Health and Safety
- Freedom of Association and Right to Collective Bargaining
- Discrimination
- Disciplinary Measures
- Working Hours
- Compensation
- Management System
The Supply Chain Act regulates corporate responsibility for human rights compliance in supply chains for the first time. It obliges companies with their registered office or branch in Germany to implement defined due diligence requirements. The core element is risk management to identify and avoid the risks of human rights violations and damage to the environment. The due diligence obligations relate to the company's own business operations, as well as to contractual partners and other (indirect) suppliers. The law will apply from 2023 to companies with at least 3,000 employees and from 2024 to companies with at least 1,000 employees.
On September 25, 2015, the UN Summit in New York adopted the "Agenda 30 for Sustainable Development", which includes the 17 Sustainable Development Goals (17 SDGs).
The 17 goals to be aimed for by 2030 are:
- No Poverty
- Zero Hunger
- Good Health and Well-being
- Quality Education
- Gender Equality
- Clean Water and Sanitation
- Affordable and Clean Energy
- Decent Work and Economic Growth
- Industry, Innovation and Infrastructure
- Reduced Inequality
- Sustainable Cities and Communities
- Responsible Consumption and Production
- Climate Action
- Life Below Water
- Life on Land
- Peace and Justice Strong Institutions
- Partnerships to achieve the Goal
The UN Global Compact is a network of the United Nations, with 12,000+ member companies, which focuses on sustainable corporate governance and strategy. A global initiative that calls on companies to adhere to the ten Universal Principles (human rights, labor, environment and anti-corruption) and thus contribute sustainably to the 17 SDGs of the United Nations.
FAQ
Häufig gestellte Fragen
Was ist Greenwasching?
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Klimaneutral oder klimapositiv sein, geht das?
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