This article first appeared in The Edge Malaysia Weekly on December 25, 2023 - January 7, 2024

The acronyms and jargon used in the environmental, social and governance (ESG) and sustainability world can be confusing to outsiders and present a learning curve to industry players.

Obviously, this page cannot fit all the words, which is a testament to how ESG and sustainability have become a trend. Fortunately, some of these terms have been covered in the glossary pages of previous ESG issues, which can be found online.

Here are some of the most popular buzzwords in conference halls, meeting rooms and reports in 2023:

1. Energy transition

The shift from one source of energy production to other sources. In today’s context, this is done to reduce carbon emissions from the energy sector, so it implies moving from energy sources such as fossil fuels that generate high emissions to clean energy sources such as solar and wind.

2. Just transition

A concept conceived in the 1980s by US trade unions to protect workers affected by new water and air pollution regulations. Now, it is used to describe how all communities and countries must be brought along in the decarbonisation journey.

For instance, this means that upskilling opportunities must be given to oil and gas workers so they are not stranded in the transition.

Another example is to highlight that developed nations have been responsible for most of the emissions in the past and have more resources to meet climate targets now. This is not the same for developing countries, which are affected more significantly by climate change, need to develop their economies and have fewer resources.

(Source: United Nations Development Programme)

1. Sustainable finance

Refers to the consideration of ESG factors when making investment and financing decisions. For example, financing for solar panel adoption falls under the environmental category while a loan for affordable housing falls under the social category.

Green bonds, social bonds and sustainability-linked bonds, which tie key performance indicators to loan requirements, are other examples.

2. Blended finance

Mobilising private finance alongside public funding for projects that are typically riskier and harder to fund.

1. Nature-based solutions

Actions to protect, manage and restore nature to address societal challenges and support human well-being. For instance, restoring wetlands can protect local communities from rising floodwaters; and conserving mangrove forests provides nurseries for fish and protects neighbouring villages from storm damage.

(Source: WWF)

2. Biodiversity

The variety of life — animals, plants, fungi and even microorganisms — that can be found in one area. Each species and organism works together in ecosystems to maintain balance and support life, for instance, by providing food, clean water, medicine and shelter to humans.

(Source: WWF)

1. Greenwashing

Environmental claims on a product or practice that are false or misleading. Common strategies include using nature-based imagery in product packaging or advertisements to imply sustainability without real action to back such claims and the use of buzzwords such as “natural” and “eco-friendly”, with little details on the practices.

(Source: Natural Resources Defense Council)

2. Greenhushing

Companies deliberately under-reporting their ESG or sustainability goals to avoid scrutiny.

3. Greencrowding

A method of distraction by joining a group initiative and hiding one’s slow progress.

4. Greenlighting

Advertisements or communications that highlight green initiatives, which are only a small part of an organisation’s overall strategy, to divert attention.

5. Greenshifting

Companies that shift responsibility onto consumers to be more sustainable rather than reducing their own carbon footprint.

1. ESG

A framework that is used to consider ESG factors in an organisation’s business practices, investments, financing and performance.

2. Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their own needs.

3.Sustainable Development Goals (SDGs)

A blueprint to achieve a better and more sustainable future for all by addressing global challenges related to poverty, inequality, climate change, peace and justice, and others.

4. Circular economy

A model of production and consumption that extends the lifetime of materials and products as long as possible. This reduces waste produced or turns waste materials into raw materials again. Sharing, reusing, repairing, leasing, refurbishing and recycling are among the key strategies.

(Source: European Parliament)

1. ISSB

The International Sustainability Standards Board, which released its inaugural standards for sustainability-related disclosures earlier this year.

2.TCFD

The Task Force on Climate-related Financial Disclosures, which developed a framework to help companies disclose climate-related risks and opportunities.

3. DEI

Diversity, equity and inclusion are programmes that promote the representation of different groups of individuals.

4. REC

Renewable Energy Certificate, which is proof of the production of one megawatt-hour of renewable energy.

5. CGPP

The Corporate Green Power Programme allows eligible corporate consumers to enter into agreements with solar power producers to purchase renewable energy virtually.

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