Did you know that although the majority of companies see climate change as a significant risk to their business operations, revenue, and costs, when it comes to navigating sustainability language, it often feels like trying to decode a secret message?
It is not that CEOs don’t consider sustainability crucial for their company success. But fully understanding these terms that accompany sustainability is a complicated necessity for business leaders and professionals alike. Who wouldn’t choose to lead more sustainable lives? Yet the struggle with complex terminology is real, and it dominates discussions about sustainability and climate action.
From ESG to Net Zero, from Scope 3 emissions to CSRD, the sustainability landscape is filled with acronyms and technical terms that can be overwhelming. These aren’t argot. They represent frameworks and concepts that drive real business decisions, especially when acknowledging how consumers believe in the dynamics of sustainable business practices.
Fortunately, you don’t need an environmental science degree to understand sustainability language. This guide is put together to help you cut through the jargon, explain key concepts in plain English, and equip you with the knowledge to confidently participate in sustainability conversations—whether you’re reading a corporate sustainability report or developing your company’s environmental strategy.
Sustainability language has become a labyrinth of technical terms, making it burdensome for both businesses and consumers to navigate. All consumers can read “carbon offsetting”—it is one of the primary methods businesses rely on for achieving net-zero goals, after all. However, only 11% of them fully grasp the term.
The sustainability field has developed what many experts call an “alphabet soup” of acronyms. When encountering terms like ESG, SDG, CSR, GRI, CDP, DJSI, GHG, KPI, LEED, and SASB for the first time, many professionals admit they “don’t know where to start”. This abundance of technical terminology creates immediate barriers to understanding, let alone any engagement.
Additionally, the problem extends beyond just business contexts. Although “single-use plastics” has received widespread media coverage and recent legislation, only 47% of consumers can confidently define what the term means. This disconnect highlights a significant gap between industry professionals and the general public.
Consequently, this technical language barrier impacts meaningful action. While 90% of consumers believe it’s important for brands to discuss their sustainability initiatives, more than half don’t believe businesses are acting sincerely in their efforts. This skepticism stems partly from the inability to understand the terminology being used.
Furthermore, the complexity becomes even more pronounced in multinational contexts. Research into linguistic injustice revealed that non-native English speakers are 2.5 times more likely to have their scientific papers rejected because they find it harder to express their ideas in English. In corporate settings, similar challenges may lead to reluctance in sharing local sustainability initiatives.
Perhaps more troubling than the proliferation of acronyms is the lack of consistent definitions. The term “sustainability” itself, despite becoming a political and social buzzword, remains ambiguously defined. Different industries and stakeholders interpret sustainability concepts in vastly different ways.
For instance, the concept of sustainable development is often used interchangeably with sustainability, even in academic and scientific fields. Nevertheless, different schools of thought argue that sustainable development is contradictory due to the impossibility of sustaining infinite economic growth on a finite planet.
This situation creates fundamental contradictions between stated environmental goals and the operational mechanisms of systems—what experts call “systemic inconsistencies.” These aren’t merely isolated incidents of mismanagement but reflect a fundamental misalignment between aspirational language and systemic support.
The absence of clear parameters has serious implications. For example, the EU’s Sustainable Finance Disclosure Regulation (SFDR) lacks a universally agreed-upon definition of “sustainable investments.” This ambiguity has pushed market participants to make judgment calls, leading to diverging investor approaches and potential greenwashing concerns.
Moreover, the English lexicon of sustainability is dominated by terms like “reduction” and “efficiency,” which focus on what we have to lose in moving to a lower-carbon world. This framing makes the transition feel difficult and unappealing rather than highlighting opportunities.
The speed of modern communication has exacerbated these issues, causing many words to be “abused or used superficially.” Concepts like sustainability are repeated across domains until they lose meaning, importance, and credibility. As one expert notes, “We live in the era of sustainability, or at least it seems that way.”
Understanding the core sustainability frameworks helps decode the seemingly complex language surrounding environmental action. Let’s break down three fundamental concepts that form the foundation of sustainability discussions in business.
ESG stands for Environmental, Social, and Governance—a framework that evaluates how companies manage risks and opportunities related to sustainability. According to KPMG, more than 90% of the world’s largest companies now report on their sustainability performance through various frameworks and standards.
The components of ESG include:
ESG originated in 2005 when the United Nations Environment Program Finance Initiative coined the term in the Freshfields Report. Beyond ethical considerations, ESG helps identify and manage business risks. Indeed, from consumers to employees to investors, more stakeholders are choosing companies that prioritize these concerns.
Investors particularly value ESG as a risk assessment tool. Companies with robust ESG criteria avoid risky practices that can damage reputation and shareholder value. Major financial institutions, including Goldman Sachs and JPMorgan Chase, now publish annual reports reviewing companies’ ESG approaches.
Although “net zero” and “carbon neutral” are frequently used as if they mean the same thing, they actually represent different commitments with distinct implications.
Carbon neutrality refers to balancing emitted carbon dioxide with an equivalent amount removed from the atmosphere. Companies achieve this through both reducing emissions and investing in carbon offset projects like reforestation. The focus here is specifically on carbon dioxide.
Net zero is broader and more ambitious. It addresses all greenhouse gasses—including methane, nitrous oxide, and fluorinated gasses—not just carbon dioxide. To reach net zero, the SBTi (Science-Based Targets Initiative) requires companies to abate at least 90% of their emissions, with only the remaining 10% reduced through permanent removals.
Currently, 45% of Fortune Global 500 companies plan to be net zero by 2050—dramatically up from just 8% in 2020. Notably, this target aligns with what’s needed to limit global warming to 1.5°C, as exceeding this threshold could lead to catastrophic climate impacts.
Corporate Social Responsibility (CSR) represents one of the earliest frameworks for business sustainability, dating back to the 1970s. CSR refers to a company’s commitment to operate ethically, considering impacts beyond just profit-making.
Unlike ESG, which provides specific measurable criteria, CSR has traditionally been more self-directed, allowing companies to determine their own priorities for benefiting society. Similarly, while ESG is data-driven and designed primarily for financial decision-making, CSR focuses on balancing current stakeholder interests.
The business case for CSR has strengthened over time. Morgan Stanley reports that more than 80% of companies see potential financial opportunities aligned with sustainability goals, with 79% saying it will drive higher revenue. Furthermore, research from McKinsey shows that top performers incorporating sustainable practices are more than twice as likely as peers to grow revenue by more than 10%.
As sustainability becomes increasingly important, understanding these frameworks helps you navigate the terminology and evaluate companies’ commitments more effectively. The relationship between these concepts continues to evolve, with ESG emerging partly as a response to the need for more standardized, measurable sustainability criteria than CSR could provide.
The foundation of measuring and reducing environmental impact lies in understanding how greenhouse gas (GHG) emissions are categorized. To take effective climate action, you need to grasp the different types of emissions your organization produces or influences.
The Greenhouse Gas Protocol, which provides the most widely recognized accounting standards globally, categorizes emissions into three distinct “scopes.” This framework helps organizations understand their total carbon footprint by distinguishing between emissions they directly control and those they indirectly influence.
Scope 1: Direct Emissions These emissions come from sources that an organization owns or controls directly. Essentially, they’re the GHGs released into the atmosphere as a direct result of your activities. Scope 1 includes:
Scope 2: Indirect Energy Emissions These represent indirect emissions from the generation of purchased electricity, steam, heating, or cooling consumed by your organization. While these emissions physically occur at facilities where energy is generated—not at your own—you’re still responsible for them as the energy consumer. McKinsey notes that Scope 2 emissions are essentially “the Scope 1 emissions of another company” (such as a power station).
Meanwhile, both Scope 1 and 2 emissions are relatively straightforward to measure and manage. Organizations typically have direct access to the source data needed to convert purchases of gas and electricity into greenhouse gas values.
Scope 3 encompasses all other indirect emissions that occur in your value chain—both upstream and downstream. These emissions are not produced by your company itself nor from assets you control directly, yet they result from your activities. Accordingly, they present unique challenges.
Primarily, Scope 3 emissions dominate most corporate carbon footprints. McKinsey estimates they typically represent around 90% of a company’s total emissions, while other research indicates supply chain emissions are, on average, 11.4 times higher than operational emissions—approximately 92% of an organization’s total GHG emissions.
The complexity stems from several factors. First, the GHG Protocol identifies 15 different categories of Scope 3 emissions, ranging from purchased goods and business travel to the use and disposal of sold products. Second, these emissions involve an intricate web of supplier and customer relationships across extended business work streams.
Furthermore, data collection presents significant hurdles. The difficulty varies considerably across categories—information about business travel and employee commuting may be relatively accessible, whereas gathering emissions data from suppliers is substantially more challenging. Current emissions calculations often lack flexibility and are prone to errors, making them potentially inaccurate.
Despite these challenges, addressing Scope 3 emissions is crucial. For most businesses, the majority of their GHG emissions and cost reduction opportunities exist outside their own operations. Companies serious about sustainability cannot ignore this category, given that Scope 3 typically constitutes the largest portion of their carbon footprint.
Organizations seeking to tackle these emissions often start by identifying which Scope 3 categories are most relevant to their operations, estimating emissions using available data, and subsequently improving their measurement approaches over time. This process of continuous improvement helps companies gain a more comprehensive understanding of their environmental impact and identify meaningful opportunities for reduction.
Navigating the complex landscape of sustainability reporting requires understanding a variety of frameworks and standards that often appear as an overwhelming alphabet soup of acronyms. This fragmentation presents significant challenges for companies, with approximately 10-15 internationally established sustainability reporting standards currently in existence.
The Global Reporting Initiative (GRI) stands as one of the oldest and most widely adopted reporting frameworks. Established in 1997, GRI provides a universal language for sustainability reporting. Its influence is considerable—78% of the world’s top 250 companies and an average of 68% of the top 100 companies across 58 countries use GRI Standards. Through its modular structure of universal, sector-specific, and topic-based standards, GRI helps organizations communicate their environmental, social, and economic impacts.
In contrast, the Sustainability Accounting Standards Board (SASB) focuses specifically on financially material sustainability information. Created in 2011, SASB developed industry-specific standards across 77 sectors, helping companies identify sustainability factors most critical to their specific business activities. First, SASB merged with the International Integrated Reporting Council to form the Value Reporting Foundation in 2021. Second, this foundation was subsequently absorbed by the IFRS Foundation in 2022.
The Task Force on Climate-related Financial Disclosures (TCFD) takes a more focused approach. Established in 2015 by the Financial Stability Board, TCFD developed recommendations specifically for climate-related financial risk disclosures. Its framework addresses four core elements: governance, strategy, risk management, and metrics and targets. Over time, more than 4,000 companies declared support for the TCFD recommendations, highlighting its significance in shaping climate reporting practices.
Interestingly, TCFD’s influence extended beyond its own existence—after its recommendations were incorporated into the IFRS disclosure standards, the task force disbanded in October 2023.
The landscape of sustainability reporting is evolving rapidly with the emergence of more comprehensive global standards. The Corporate Sustainability Reporting Directive (CSRD) represents a significant shift in the European Union’s approach to sustainability reporting. Effective January 2023, CSRD replaces the Non-Financial Reporting Directive and significantly expands mandatory EU sustainability reporting standards.
At the heart of CSRD lies the concept of double materiality, requiring companies to report on both financial materiality (impact on the company’s financial position) and impact materiality (the company’s effect on the environment and society). Once fully implemented, CSRD will expand the number of companies required to report sustainability information from approximately 11,600 to nearly 50,000 EU companies.
On the international front, the International Sustainability Standards Board (ISSB) was established in November 2021 at COP26 in Glasgow. The ISSB aims to create a global baseline of sustainability disclosures focused on the needs of investors and financial markets. In June 2023, the ISSB issued its first two standards: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures).
Unlike CSRD’s double materiality approach, ISSB focuses on single materiality—emphasizing sustainability-related financial disclosures relevant to investors. However, both frameworks aim to address the fragmented landscape of voluntary sustainability-related standards that currently add cost, complexity, and risk to both companies and investors.
Currently, jurisdictions representing over half the global economy by GDP have announced steps to use the ISSB standards or fully align their sustainability disclosure requirements with them. These include Australia, China, Brazil, Canada, Japan, Mexico, and the United Kingdom.
To help organizations reporting under both frameworks, the IFRS Foundation and the European Financial Reporting Advisory Group published interoperability guidance in May 2024, aiming to streamline disclosure processes and improve transparency in this increasingly complex reporting landscape.
Turning sustainability knowledge into meaningful action requires more than just memorizing terminology. First and foremost, companies must connect these concepts to concrete business practices that deliver genuine environmental and social benefits.
Moving beyond just compliance, modern companies integrate sustainability language into their strategic decision-making. A key starting point is conducting a materiality assessment to identify the most significant ESG issues relevant to the business and stakeholders. This process helps organizations prioritize sustainability initiatives based on their potential impact on financial performance and reputation.
Once priorities are established, businesses can incorporate sustainability terms into their core operations. Organizations that include sustainability in their strategy experience tangible benefits—research shows companies with high ESG ratings consistently outperform the market in both medium and long term. The most effective strategies avoid trying to tackle too many issues simultaneously. Scattered sustainability efforts often fail to generate either business results or meaningful impact. In extreme cases, this approach can lead stakeholders to assume the company is greenwashing.
Meaningful stakeholder engagement forms an essential foundation for sustainable business practices. Unlike one-way information dissemination, effective engagement involves two-way communication based on good faith from both parties. This dialog should be proactive, responsive, and ongoing—often conducted before decisions are made.
The benefits of proper stakeholder engagement are substantial:
Transparency fundamentally underpins successful stakeholder relationships. In reality, 86% of Americans view transparency in business as “more important than ever before”. Even after a negative experience, 86% of respondents said they would be more likely to give a company a second chance if it has a history of transparency.
To prevent miscommunication and accusations of greenwashing, clear language is crucial. You should avoid broad, unsubstantiated sustainability-related statements or jargon without providing clarifying information. Terms like “socially responsible,” “ethical investing,” or “impact investing” mean different things to different people and require adequate explanation.
The World Economic Forum recommends seven guidelines for effective sustainability communication:
Ultimately, effective communication builds on actual sustainability accomplishments. In today’s environment of increasing scrutiny, businesses must prioritize transparency and accountability in their messaging to build lasting trust with consumers, investors, and regulators.
Several practical tools exist to help you navigate the complex world of sustainability terminology and put these concepts into action. As you build your environmental literacy, these resources can transform abstract ideas into tangible results.
Online sustainability glossaries serve as quick reference guides for decoding industry jargon. These resources compile definitions for hundreds of terms, from basic concepts to specialized acronyms. Glossaries often categorize terms by topic area, allowing you to quickly find relevant definitions.
Carbon footprint calculators help quantify environmental impact in measurable terms. The EPA’s Household Carbon Footprint Calculator estimates emissions in three areas: home energy, transportation, and waste. These calculations vary based on location, habits, and personal choices. For perspective, the average carbon footprint for a person in the United States is 16 tons—one of the highest rates globally—compared to the global average of 4 tons.
For businesses, more comprehensive tools track emissions across scopes 1, 2, and 3, covering facilities, vehicles, people, products, purchases, waste, and water.
Life Cycle Assessment (LCA) evaluates environmental impacts throughout a product’s entire existence—from raw material extraction through materials processing, manufacturing, distribution, use, and disposal. This methodology considers multiple impact categories beyond just emissions, including resource use, biodiversity, and pollution.
Product Carbon Footprint (PCF) analysis focuses specifically on a product’s global warming potential by measuring greenhouse gas emissions. While narrower in scope than LCA, PCF provides a clear metric that’s easier to communicate to stakeholders.
The choice between these tools depends on your resources, goals, and industry norms.
When examining sustainability reports, first locate the downloadable PDF version rather than website summaries. Pay attention to the report title, as terminology choices (“impact report” versus “sustainability report”) often signal the company’s approach.
Focus on the commitments and goals sections, comparing year-over-year to evaluate consistency and ambition. Examine how companies break down environmental impacts by area (packaging, production, logistics) and look for assurance statements from auditors that validate the report’s claims.
Sustainability language certainly presents a challenge for professionals and businesses alike. Throughout this guide, you’ve seen how terms like ESG, Net Zero, and CSR form the foundation of corporate sustainability efforts. Additionally, understanding emissions categories and reporting frameworks provides the knowledge needed to evaluate environmental claims effectively.
The complexity of sustainability terminology stems not just from the abundance of acronyms but also from inconsistent definitions across industries. Nevertheless, this shouldn’t discourage your sustainability journey. After all, research shows companies that embrace sustainable practices outperform their peers financially while building stronger stakeholder relationships.
Clear communication remains essential when discussing sustainability initiatives. Rather than relying on vague buzzwords, focus on specific, measurable actions your organization is taking. Transparency builds trust—particularly important considering 86% of Americans view business transparency as more critical than ever before.
Remember to utilize available resources such as glossaries, carbon calculators, and LCA tools to put sustainability concepts into practice. These practical instruments transform abstract terminology into actionable insights that drive genuine environmental and social benefits.
Sustainability language will undoubtedly continue evolving as reporting standards become more unified through frameworks like CSRD and ISSB. Therefore, staying informed about these developments helps you navigate disclosure requirements confidently while avoiding potential greenwashing accusations.
The journey toward sustainability literacy takes time, but the benefits—both for business success and environmental impact—make it worthwhile. Armed with this knowledge, you can now approach sustainability discussions with greater confidence, turning complex terminology into meaningful action.
