Glossary

Scope 1 Emission refers to the Green House Gas (GHG) emissions that a company makes directly — for example, while running its boilers and vehicles.

Scope 2 Emission are the emissions company makes indirectly, such as electricity or energy it buys for heating and cooling buildings. 

Scope 3 Emission refers to all emissions associated, not with the company itself, but that the organization is indirectly responsible for, up and down its value chain (e.g., transportation, etc.)   

Shareholder Primacy is defined as a business prioritizing the well-being of the shareholder (the owner) above any other business area.

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Investopedia defines a social enterprise or business as a business with specific social objectives that serve its primary purpose. Social enterprises seek to maximize profits while maximizing benefits to society and the environment. The profits are principally used to fund social programs.

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Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

Social responsibility is an ethical framework in which an individual is obligated to work and cooperate with other individuals and organizations to benefit the community that will inherit the world that the individual leaves behind.

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Stakeholder Capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. The key stakeholders are customers, suppliers, employees, shareholders, and local communities. Under this system, a company's purpose is to create long-term value and not to maximize profits and enhance shareholder value at the cost of other stakeholder groups.

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ESG Standards provide specific, detailed, and replicable requirements for what should be reported for each topic, including metrics to measure your ESG initiatives.

Supply chain due diligence is a process in which a company researches and investigates potential suppliers to identify any risks associated with those businesses. Typically these risks will range from legislative and governance issues to ethical and environmental concerns. For example, companies may need to ensure that the suppliers they work with are not involved in practices such as money laundering, child labor, human trafficking, corruption and bribery, and environmental damage.

By implementing a supply chain due diligence policy, companies can identify any risks from working with different suppliers. Increasingly, supply chain due diligence is used to ascertain whether proposed suppliers align with the company's ESG goals and requirements. As a result of this due diligence, companies can then decide whether to work with specific suppliers and whether suppliers should be asked to take any corrective action before carrying out work for the company.

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