Term Description Source
Biodiversity offset Measurable conservation outcomes designed to compensate for adverse and unavoidable impacts of projects on biodiversity, in addition to prevention and mitigation measures already implemented. Cooper and Trémolet (2019)
Blended finance The strategic use of development finance and philanthropic funds to mobilize private capital flows to emerging and frontier markets. Cooper and Trémolet (2019)
Bond A debt security, under which the issuer owes the bond holders a debt and (depending on the terms of the bond) is obliged to pay them a fixed or variable interest rate and to repay the principal when the bond matures. Cooper and Trémolet (2019)
Blue bond A bond to finance projects that support marine reserves and sustainable fisheries, which also classify as green assets. Cooper and Trémolet (2019)
Carbon credit A credit awarded to projects that prevent or avoid the emission of greenhouse gases. Each credit represents one tonne of carbon dioxide. Cooper and Trémolet (2019)
Carbon footprint The sum of greenhouse gas (GHG) emissions for a given company or group of companies comprising a portfolio. Cooper and Trémolet (2019)
Carbon neutrality Achieving net zero carbon emissions by balancing GHG emissions with an equivalent amount sequestered or offset or buying enough carbon credits to make up the difference. Cooper and Trémolet (2019)
Clean energy Energy from non-polluting sources, including solar, wind and water. Cooper and Trémolet (2019)
Climate change A change in global or regional climate patterns, attributed largely to the increased levels of atmospheric carbon dioxide produced by the use of fossil fuels. Cooper and Trémolet (2019)
Climate risks Risks stemming from climate change that have the potential to affect companies, industries and whole economies. including growing natural resource scarcity, impact on availability of key inputs (such as water and agricultural products), regulatory developments, and potential reputational damage. Cooper and Trémolet (2019)
Corporate engagement Using shareholder power to directly influence corporate behaviour or decision-making. This includes actions such as communicating with company management, filing shareholder proposals and proxy voting. Cooper and Trémolet (2019)
Corporate Social Responsibility (CSR) A self-regulating business model that helps a company be socially accountable— to itself, its stakeholders, and the public. A company practicing CSR operates, in the ordinary course of its business, in ways that enhance society and the environment, instead of contributing negatively to them. Cooper and Trémolet (2019)
Divestment The sale or disposal of securities or other assets based on corporate behaviour that is not aligned with specific environmental, social and governance objectives, values or convictions. Cooper and Trémolet (2019)
Ecosystem A community of plants, animals and microorganisms and their physical environment. Cooper and Trémolet (2019)
Ecosystem services The benefits that people obtain from ecosystems. These include provisioning services such as food and water; regulating services such as climate and flood control; cultural services such as spiritual, recreational, and cultural benefits; and supporting services such as nutrient cycling that maintain the conditions for life on earth. Cooper and Trémolet (2019)
Environmental, social and governance (ESG) The factors and issues investors consider regarding a firm’s sustainable business practices. Cooper and Trémolet (2019)
ESG-focused funds Originally known as socially responsible investing (SRI) funds, portfolios that explicitly apply environmental, social and governance (ESG) criteria in their investment decision-making process. Cooper and Trémolet (2019)
ESG investing Investing based on a company’s exposure to ESG-related risks and opportunities, focusing on the ones most likely to have a material impact on investment performance. Cooper and Trémolet (2019)
Exclusionary screening Avoiding companies involved in controversial businesses such as fossil fuels, oil, and tobacco, or other ESG-related criteria. Cooper and Trémolet (2019)
Green bond A fixed income security whose proceeds are ringfenced for projects that deliver positive environmental outcomes. Cooper and Trémolet (2019)
Green infrastructure A subset of nature-based solutions that intentionally and strategically preserves, enhances or restores elements of a natural system to help produce higher quality, more resilient and lower cost infrastructure services. Cooper and Trémolet (2019)
Green investing An investment philosophy that considers the environmental impact of an underlying investment. Cooper and Trémolet (2019)
Green loan Any type of loan instrument made available exclusively to finance or re-finance, in whole or in part, new and/ or existing eligible green projects. Cooper and Trémolet (2019)
Impact investing Intentionally seeking positive environmental and social outcomes alongside financial returns. Cooper and Trémolet (2019)
Low-carbon economy An economy based on low-carbon power sources that has a minimal output of greenhouse gas (GHG) emissions. Cooper and Trémolet (2019)
Nature-based solutions Actions that protect, manage and restore natural capital in ways that address societal challenges effectively and adaptively. These include structural and nonstructural actions, ranging from ecosystem restoration to integrated resource management, green infrastructure and more. Cooper and Trémolet (2019)
Natural Capital Declaration A commitment by financial institutions to work towards integrating natural capital criteria into financial products and services. It was launched at the Rio+20 Earth Summit in June 2012. Cooper and Trémolet (2019)
Natural capital The stock of renewable and non-renewable resources (e.g. plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to people. Cooper and Trémolet (2019)
Negative screening A strategy of avoiding investing in companies that match pre-determined criteria – for example, if business practices are considered harmful to individuals or the environment. Cooper and Trémolet (2019)
Net-zero carbon Achieved by balancing a measured amount of carbon released with an equivalent amount sequestered or offset. Cooper and Trémolet (2019)
Paris Agreement An accord within the United Nations Framework Convention on Climate Change addressing GHG emissions reductions, climate change adaptation, and finance, beginning in 2020. It is the first-ever universal, legally binding global climate deal and was adopted by 195 countries at the December 2015 UNFCCC conference in Paris. The agreement sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to below 2°C. Cooper and Trémolet (2019)
Positive screening A strategy of identifying investible companies that match predetermined criteria – for example, having a culture of strong corporate social responsibility. Cooper and Trémolet (2019)
Principles for Responsible Investment (PRI) A UN-supported organisation that works to understand the investment implications of environmental, social and governance factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. Cooper and Trémolet (2019)
Socially responsible investing (SRI) Originally, a term used interchangeably with environmental, social and governance (ESG) investing. Typically, legacy SRI approaches have emphasized exclusionary screening. Cooper and Trémolet (2019)
Sustainable development The concept of meeting present needs without compromising future generations. It encompasses social welfare, protection of the environment, efficient use of natural resources, and economic well-being. Cooper and Trémolet (2019)
Sustainable Development Goals (SDGs) A set of United Nations goals with a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. Cooper and Trémolet (2019)
Sustainable investing Long-term investment in a company, asset or sector that makes a positive contribution to the environment, economy or society, in order to support or boost that positive contribution over time. Cooper and Trémolet (2019)