Glossary of terms
This glossary provides definitions and key acronyms used in sustainability reporting and compliance. Use it as a quick reference guide to understanding European standards, directives, and reporting requirements.
Acronym
Full form
Full formAR
Application requirement
BSR
Baltic Sea Region
CE
Circular economy
CSRD
Corporate Sustainability Reporting Directive
DMA
Double materiality assessment
DR
Disclosure requirement
EFRAG
European Financial Reporting Advisory Group
ESG
Environmental, social, and governance
ESRS
European sustainability reporting standards
EU
European Union
E1
ESRS standard for Climate change
E2
ESRS standard for Pollution
E3
ESRS standard for Water and marine resources
E4
ESRS standard for Biodiversity and ecosystems
E5
ESRS standard for Resource use and circular economy
EUSBSR PA
EU Strategy for the Baltic Sea Region policy area
GOV
Governance (disclosure requirement category under ESRS 2)
G1
ESRS standard for Business conduct
IRO
Impact, risk, and opportunity
LSME
Listed small and medium enterprises
MDR-A
Management disclosure requirement - actions
MDR-M
Management disclosure requirement - metrics
MDR-P
Management disclosure requirement - policies
MT
Management disclosure requirement - targets
NDA
Non-disclosure agreement
NFRD
Non-financial Reporting Directive
NGO
Non-governmental organization
PDF
Portable document format
SBM
Strategy-based management
SFDR
Sustainable Finance Disclosures Regulation
SME
Small and medium-sized enterprise
S1
ESRS standard for Own workforce
S2
ESRS standard for Workers in the value chain
S3
ESRS standard for Affected communities
S4
ESRS standard for Consumers and end users
TBC
To be clarified
VSME
Voluntary standard for non-listed small and medium enterprises
XLSX
Excel spreadsheet file format
Term
Definition
DefinitionValue chain
The full range of activities that organisations go through to bring a product or service from conception to delivery. It includes all stakeholders, from suppliers to end-users, that affect or are affected by the company's operations.
Impact materiality
A concept in sustainability that refers to the significance of the actual or potential positive or negative impacts of a company's activities on people or the environment over the short, medium, or long term.
Financial materiality
The significance of risks and opportunities deriving from sustainability matters that have or could have a financial effect on a company's development, financial position, performance, or cash flows.
Double materiality
A concept under the CSRD where organisations need to report on both the financial materiality of sustainability issues (impacting the company’s financial performance) and the impact materiality (impacting society and the environment).
Sustainability matters
Topics related to environmental, social, and governance (ESG) aspects that are identified as material in a company's sustainability assessment process.
Disclosure requirements (DR)
Specific pieces of information that organisations are required to disclose in their sustainability reports as defined by ESRS standards.
ESG Tool
A methodological tool used by organisations to assess, manage, and report on their environmental, social, and governance (ESG) performance.
Stakeholder mapping
The process of identifying and evaluating the individuals, groups, or organizations that are affected by or can affect a company's operations. This is crucial for understanding and prioritizing stakeholder interests and concerns.
Governance (GOV)
A category in sustainability reporting that covers policies, procedures, and practices related to corporate governance, including business conduct, ethics, and compliance.
Circular economy (CE)
An economic system aimed at eliminating waste and the continual use of resources through principles like reusing, recycling, and refurbishing materials and products.
Non-financial Reporting Directive (NFRD)
An EU directive that requires large organisations to disclose certain non-financial information related to environmental, social, and employee matters, human rights, and corruption.
Sustainable Finance Disclosures Regulation (SFDR)
An EU regulation that establishes harmonized rules for financial market participants on sustainability-related disclosures.
Listed small and medium enterprises (LSME)
SMEs that are publicly traded on stock exchanges and subject to specific reporting standards like the ESRS LSME.
Voluntary standard for non-listed small and medium enterprises (VSME)
A set of sustainability reporting standards specifically designed for non-listed SMEs, which are voluntary in nature.
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