ABCD – ESG? 7 Key Sustainability Abbreviations Explained
CSR
Corporate Social Responsibility
CSR is an overarching concept that refers to an organisation’s responsibility for its impact on society, the environment and the economy. It includes everything from reducing emissions and investing in recycling, to ensuring fair working conditions and supporting local communities.
Organisations that take CSR seriously often find that it strengthens their brand and builds trust among customers and employees alike.
ESG
Environmental, Social & Governance
ESG is a globally used framework for sustainability reporting. It focuses on three key areas when assessing a company’s sustainability: environmental impact, social responsibility, and corporate governance. Each pillar encompasses various sustainability issues that companies should address and report on.
Structuring sustainability efforts and reporting according to ESG creates transparency and gives investors, customers and stakeholders a clear picture of a company’s sustainability performance.
UNGC
United Nations Global Compact
UNGC is the world’s largest corporate sustainability initiative. Launched in 1999 by then UN Secretary-General Kofi Annan, it aims to accelerate sustainable business practices.
Companies that sign up commit to ten principles across human rights, labour, the environment, and anti-corruption – and must report transparently on their sustainability progress annually.
SBTi
Science-Based Targets initiative
SBTi is a collaboration between UNGC, the World Resources Institute (WRI), Carbon Disclosure Project (CDP), and WWF. It helps companies reduce greenhouse gas emissions by setting scientifically grounded climate targets.
SBTi evaluates and validates whether an organisation’s climate goals align with what the science says is needed to limit global warming to 1.5°C, in line with the Paris Agreement.
CSRD
Corporate Sustainability Reporting Directive
CSRD is not to be confused with CSR. CSRD is an EU directive that mandates more companies to report their sustainability efforts in a standardised format.
From 2024, large and publicly relevant companies are required to report sustainability data according to CSRD. This increases transparency and makes it easier to compare companies from a sustainability perspective.
ESRS
European Sustainability Reporting Standards
While CSRD outlines that companies must report in a certain way, ESRS defines what and how they must report. Like CSRD, the goal is to increase transparency and provide comparable sustainability data.
A key principle in ESRS is "double materiality": companies must report both how they impact the world and how sustainability issues affect them.
SDG
Sustainable Development Goals
Most people have come across the SDGs – the UN’s 17 global goals for sustainable development to be achieved by 2030. They cover areas such as climate, health, equality, and sustainable consumption.
These goals serve as a reference point for businesses that want to contribute to a better world. By linking their operations to specific goals, such as "sustainable cities and communities" (Goal 11), companies can clearly show how they support sustainable development.
