Sustainability Fundamentals
1. Sustainability
Sustainability is the ability to meet present needs without compromising the ability of future generations to meet their own needs. In a business context, sustainability involves managing economic, environmental, and social impacts, risks, and opportunities in a manner that supports long-term value creation and resilience.
Primary References: Brundtland Commission, Our Common Future (1987)
2. Sustainable Development
Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It seeks to balance economic growth, environmental protection, and social well-being to achieve long-term prosperity.
Primary References: Brundtland Commission, Our Common Future (1987)
3. Triple Bottom Line (TBL)
Triple Bottom Line is a framework that evaluates organizational performance across three dimensions: economic prosperity, environmental stewardship, and social responsibility—often referred to as “People, Planet, and Profit.” The concept encourages organizations to measure success beyond financial performance alone.
Primary References: John Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (1997)
4. Corporate Social Responsibility (CSR)
Corporate Social Responsibility refers to an organization’s commitment to operate ethically and contribute to economic development while improving the quality of life of employees, communities, and society. CSR often encompasses voluntary initiatives that address social and environmental impacts beyond legal requirements.
Primary References: ISO 26000 Guidance on Social Responsibility; World Business Council for Sustainable Development (WBCSD)
5. Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) refers to a set of factors used to assess an organization’s management of sustainability-related risks, opportunities, and impacts. Environmental factors relate to the natural environment, social factors relate to people and communities, and governance factors relate to leadership, oversight, ethics, and accountability.
Primary References: ISSB; SASB Standards; UN Principles for Responsible Investment (PRI)
6. Stakeholder Engagement
Stakeholder Engagement is the process by which an organization identifies, communicates with, and considers the perspectives of individuals or groups that can affect, or are affected by, its activities, decisions, and performance. Effective stakeholder engagement supports informed decision-making, accountability, and sustainability outcomes.
Primary References: AA1000 Stakeholder Engagement Standard; GRI Standards
7. Materiality
Materiality is the principle used to determine which information is sufficiently important to influence the decisions of intended users. In sustainability reporting, material topics are those that significantly affect an organization’s performance, prospects, risks, opportunities, or stakeholders’ assessments and decisions.
Primary References: IFRS Sustainability Disclosure Standards; GRI Standards
8. Double Materiality
Double Materiality is an approach that considers both: (1) how sustainability matters affect an organization’s financial position, performance, and enterprise value (financial materiality), and (2) how an organization’s activities impact the environment, society, and people (impact materiality). A sustainability matter may be material from either or both perspectives.
Primary References: European Sustainability Reporting Standards (ESRS); Corporate Sustainability Reporting Directive (CSRD)
9. Circular Economy
Circular Economy is an economic model that seeks to eliminate waste, keep products and materials in use for as long as possible, and regenerate natural systems. It contrasts with the traditional linear model of “take, make, use, and dispose” by emphasizing reuse, repair, refurbishment, remanufacturing, and recycling.
Primary References: Ellen MacArthur Foundation; ISO 59004 Circular Economy Vocabulary
Reporting and Disclosure
10. Sustainability Reporting
Sustainability Reporting is the process of disclosing information about an organization’s sustainability-related impacts, risks, opportunities, governance, strategy, and performance. It enables stakeholders to understand how the organization creates, preserves, or erodes value over time in relation to environmental, social, and governance matters.
Primary References: IFRS Foundation; GRI Standards
11. Integrated Reporting (IR)
Integrated Reporting is a reporting approach that communicates how an organization’s strategy, governance, performance, and prospects lead to value creation over the short, medium, and long term. It seeks to connect financial and non-financial information to provide a holistic view of organizational performance.
Primary References: International Integrated Reporting Framework; IFRS Foundation
12. Sustainability-Related Financial Disclosure
Sustainability-Related Financial Disclosures are disclosures about sustainability-related risks and opportunities that could reasonably be expected to affect an organization’s cash flows, access to finance, cost of capital, or enterprise value over the short, medium, or long term.
Primary References: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
13. IFRS Sustainability Disclosure Standards
IFRS Sustainability Disclosure Standards are a set of globally applicable standards issued by the International Sustainability Standards Board (ISSB) to provide investors and capital market participants with consistent, comparable, and decision-useful sustainability-related financial information.
Primary References: IFRS Foundation; International Sustainability Standards Board (ISSB)
14. Global Reporting Initiative (GRI)
The Global Reporting Initiative (GRI) Standards are a globally recognized set of reporting standards that help organizations disclose their most significant economic, environmental, and social impacts, as well as how they manage those impacts.
Primary References: GRI Standards
15. Sustainability Accounting Standards Board (SASB) Standards
The SASB Standards are industry-specific standards that identify sustainability-related risks and opportunities most likely to affect the financial performance and enterprise value of organizations within a particular industry.
Primary References: IFRS Foundation; SASB Standards
16. Task Force on Climate-related Financial Disclosures (TCFD)
The Task Force on Climate-related Financial Disclosures developed recommendations for organizations to disclose climate-related governance, strategy, risk management, and metrics and targets. The TCFD framework has significantly influenced global climate reporting requirements.
Primary References: TCFD Recommendations; IFRS S2 Climate-related Disclosures
17. Connectivity of Information
Connectivity of Information refers to the linking of related information across sustainability-related risks and opportunities, governance, strategy, risk management, metrics and targets, and financial reporting to provide users with a coherent and complete understanding of an organization’s circumstances and prospects.
Primary References: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
18. Enterprise Value
Enterprise Value refers to the total value of an organization, reflecting expectations about the amount, timing, and uncertainty of future cash flows and the cost of obtaining capital. Sustainability-related risks and opportunities may influence enterprise value by affecting an organization’s financial performance and prospects.
Primary References: IFRS Foundation; IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
Climate and Environment
19. Climate Risk
Climate Risk refers to the potential adverse effects of climate change on an organization. Climate risks generally include physical risks arising from climate-related events and transition risks arising from the shift toward a lower-carbon economy.
Primary References: IFRS S2 Climate-related Disclosures; TCFD Recommendations
20. Greenhouse Gas (GHG) Protocol
The Greenhouse Gas Protocol is the world’s most widely used framework for measuring and managing greenhouse gas emissions. It establishes accounting and reporting standards for organizations to quantify and disclose emissions consistently and transparently.
Primary References: Greenhouse Gas Protocol Corporate Accounting and Reporting Standard
21. Scope 1 Emissions
Scope 1 Emissions are direct greenhouse gas emissions from sources that are owned or controlled by an organization, such as fuel combustion in company facilities and vehicles.
Primary References: Greenhouse Gas Protocol Corporate Accounting and Reporting Standard
22. Scope 2 Emissions
Scope 2 Emissions are indirect greenhouse gas emissions associated with the generation of purchased or acquired electricity, steam, heating, or cooling consumed by an organization.
Primary References: Greenhouse Gas Protocol Corporate Accounting and Reporting Standard
23. Scope 3 Emissions
Scope 3 Emissions are all other indirect greenhouse gas emissions that occur across an organization’s value chain, including both upstream and downstream activities, that are not included in Scope 1 or Scope 2 emissions.
Primary References: Greenhouse Gas Protocol Corporate Accounting and Reporting Standard
24. Net Zero
Net Zero refers to a state in which greenhouse gas emissions released into the atmosphere are balanced by an equivalent amount of emissions removed or avoided, resulting in no net increase in atmospheric greenhouse gases.
Primary References: Intergovernmental Panel on Climate Change (IPCC); United Nations
25. Climate Change Mitigation
Climate Change Mitigation refers to actions taken to reduce greenhouse gas emissions or enhance greenhouse gas removals in order to limit the magnitude and rate of climate change.
Primary References: Intergovernmental Panel on Climate Change (IPCC)
26. Climate Change Adaptation
Climate Change Adaptation refers to adjustments in natural or human systems in response to actual or expected climate change and its effects, with the aim of reducing vulnerability and enhancing resilience.
Primary References: Intergovernmental Panel on Climate Change (IPCC)
Sustainability Governance
27. Sustainability Governance
Sustainability Governance refers to the system of oversight, decision-making, policies, processes, and controls through which an organization directs and manages sustainability-related risks, opportunities, impacts, and performance. It includes the roles and responsibilities of the board of directors, management, and other governance bodies in integrating sustainability into organizational strategy and operations.
Primary References: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; GRI Standards
28. Board Oversight
Board Oversight refers to the responsibility of a governing body, such as a board of directors, to oversee an organization’s strategy, risk management, internal controls, performance, and disclosures, including those related to sustainability. Effective board oversight helps ensure that sustainability-related risks and opportunities are appropriately considered in decision-making and aligned with the organization’s long-term objectives and accountability to stakeholders.
Primary References: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; IFRS S2 Climate-related Disclosures; OECD Principles of Corporate Governance (2023)
29. Sustainability Risk Management
Sustainability Risk Management refers to the processes used by an organization to identify, assess, prioritize, monitor, and manage sustainability-related risks and opportunities that may affect its strategy, operations, financial performance, stakeholders, or long-term value creation. These processes are often integrated into the organization’s broader risk management framework.
Primary References: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; IFRS S2 Climate-related Disclosures; COSO Guidance on Applying Enterprise Risk Management to ESG-related Risks
30. Sustainability Assurance
Sustainability Assurance is an engagement in which an independent practitioner evaluates and expresses a conclusion on the reliability, accuracy, completeness, and quality of sustainability-related information disclosed by an organization against defined criteria. Sustainability assurance enhances the credibility and trustworthiness of sustainability disclosures.
Primary References: International Standard on Sustainability Assurance (ISSA) 5000; International Standard on Assurance Engagements (ISAE) 3000 (Revised)