Glossary – Explaining Sustainability

Carbon neutrality is defined by an internationally valid standard (PAS 2060) that specifies requirements for the measurement, reduction, and offsetting of greenhouse gases. This set of rules was first published by the British Standards Institution in 2010. It defines a carbon-neutral footprint as a state in which an activity (e.g. production, flight, etc.) has no impact on the global CO₂ emissions into the atmosphere. The standard specifies a certain period of time to be considered for this status.

The non-governmental organization (NGO) Ceres was formed as a result of the disastrous Exxon Valdez oil spill in 1989. Joan Bavaria, then President of Trilium Asset Management, saw the need to create a non-profit, sustainability-focused organization with the goal of changing corporate environmental practices for the better. The NGO is named after the Roman goddess of agriculture and fertility, who is also regarded as a legislator. Ceres is also the acronym for “Coalition for Environmentally Responsible EconomieS.”

The principle of the circular economy is based on maintaining the life cycle of products for as long as possible. Existing materials and products should be used for as long as possible through durable construction, maintenance, repair, reuse, remanufacturing, refurbishing or recycling, thus reducing resource consumption, emissions, and waste.

The opposite of the circular economy is usually referred to as a linear economy or throwaway economy. It is the currently dominant principle of industrial production. Here, a large part of the goods and materials used are dumped and incinerated after use and only a small proportion is reused.

Along with the equity share approach, the control approach is one of the two consolidation approaches proposed by the GHG Protocol. If the control approach is chosen, the company takes full responsibility for all emissions from all its operations in one year. With the equity share approach, on the other hand, the company reports the emissions on the basis of its share of equity in the respective operation. As part of the respective control approach, the company can choose either the financial control approach, which records the proportion of emissions according to the ownership structure, or the operational control approach, which records all of the emissions.  

Corporate citizenship (CC) describes companies’ social commitment that goes beyond their own business activities. This primarily includes donations, sponsorships, and foundation activities, but also the promotion of employees’ involvement in volunteering.

The legal and factual regulatory framework for the management and supervision of companies for the goodwill of all relevant stakeholders is largely determined by legislators and owners. The specific arrangement of this framework is the responsibility of the supervisory board and the company management. The company-specific corporate governance system consists of the entirety of relevant laws, policies, codes, declarations of intent, and corporate mission statements, as well as the practices of the company management and supervisory bodies.

The C2C concept is based on a principle that was developed by the German chemist Professor Michael Braungart and the American architect William McDonough in the 1990s. Ideally, perfect cycles are created in which waste is no longer produced, since all raw materials and other materials can be reused because they are chemically harmless and recyclable.

In this context, diversity refers to the conscious management of diversity in society. It aims to recognize and value all people regardless of their origin, gender or sexual orientation, religious affiliation, physical or psychological abilities or other characteristics. It should not primarily address differences, but instead focus on discovering similarities. The goal is to reduce discrimination and promote equity of opportunity.

The three main strategies of ecodesign are an optimized use of resources, environmentally friendly technologies, and renewable energies combined with a longer usage phase. The aim is to use these strategies to achieve the greatest possible benefit from a product for all the players along the value chain, while also minimizing the environmental impact and ensuring socially fair conditions.

Emission refers to the release of substances such as gases or of energy such as radiation or heat into the environment, mostly into the earth’s atmosphere. 

The emission factor is an expression of the ratio of the mass of a released (emitted) substance to the energy unit produced. The emission factor depends on the starting material, the process, and the (emitted) substance to be considered.

A social order should enable fair conditions and enable people to get training, have careers, and enjoy societal and social development regardless of their social background. Moreover, it should ensure fair access to social goods and positions.

Environmental, social, and governance (ESG) criteria are a set of standards that investors in the capital markets often use to assess the behavior of companies and evaluate their financial potential. Only a system that takes equal account of all three areas is really sustainable. For us, sustainability therefore means a balanced pursuit of environmental, social, and corporate responsibility. 

Greenhouse gases (GHGs) are gases that contribute to the greenhouse effect and ultimately also to the warming of the earth’s surface. The Kyoto Protocol defines six greenhouse gases: 

• Carbon dioxide (CO₂)
• Methane (CH₄)
• Nitrous oxide (N₂O)
• Hydrochlorofluorocarbons (HCFCs)
• Chlorofluorocarbons (CFCs) 
• Sulfur hexafluoride (SF₆)

Sunlight, or solar radiation, easily penetrates through these gases in the earth’s atmosphere. This radiation is absorbed by the earth’s surface and mostly given off again as heat. Due to the increase in CO₂ in the earth’s atmosphere, less and less of the accumulated heat can escape into space. The result is a further warming of the earth.

The GHG Protocol is considered the most widespread standard for creating greenhouse gas inventories. It is a private transnational series of standards for greenhouse gas accounting and reporting by companies. It provides companies with a transparent, consistent, and holistic framework for disclosing their emissions.

The aim of the GRI (Global Reporting Initiative) is to offer companies and organizations transparent guidelines for preparing sustainability reports. The GRI was founded in 1997 by Ceres in partnership with the United Nations Environment Program. The GRI guidelines are intended to promote sustainable development worldwide and enable uniform transparent standards for sustainability reporting.

The Kyoto Protocol was adopted in 1997 by the Third Conference of the Parties to the United Nations Framework Convention on Climate Change. It came into force in 2005 and is the world’s first treaty to mitigate climate change that is binding under international law. It obliges the participating countries to reduce the emissions of gases that are harmful to the climate.

A product’s impact on the environment should be reduced along its entire value chain, starting with the extraction of raw materials, design, manufacture, logistics, and use to the product’s disposal or recycling. The socio-economic performance should also be improved over the entire life cycle.

The materiality analysis is an evaluation tool that is used as part of the strategic analysis. It serves to determine the sustainability issues that are important for a company and its stakeholders. If a sustainability report is prepared according to the Global Reporting Initiative (GRI), such a materiality analysis is mandatory.

The concept behind net zero is to remove as much carbon dioxide from the atmosphere as is produced. The term is a response to the growing demand for ambitious climate protection commitments. Only Scope 1 and Scope 2 emissions had to be offset in order to achieve “carbon neutrality.” The aim of net zero is to raise the standard and close the gaps that are left by the definition of carbon neutrality. These include the definition of a minimum target for CO₂ reduction, which refers to the majority of Scope 3 emissions within a specified time frame, as well as the gradual further development of climate protection projects that offset CO₂ emissions in order to make them carbon removal projects.

The Paris Agreement is an international treaty that 195 contracting parties adopted on the occasion of the United Nations Framework Convention on Climate Change on December 12, 2015. The agreement aims to mitigate climate change by limiting man-made global warming to below 2°C compared to pre-industrial values.

A joint initiative of CDP, UNGC, WRI, and WWF. It validates corporate goals and has developed methods and criteria for effective climate protection at companies. Such targets must take into account Scope 1 and 2 emissions according to the Greenhouse Gas Protocol standard. If a company’s Scope 3 emissions account for more than 40% of its total Scope 1, Scope 2, and Scope 3 emissions, the targets must also cover Scope 3. The Net-Zero Standard, launched in October 2021, provides companies with a science-based framework for setting ambitious and effective climate targets with the long-term goal of net-zero emissions.

https://sciencebasedtargets.org

Scope 1 includes all emissions that emanate directly from a company. Scope 2 encompasses emissions from purchased energy such as electricity and gas. Scope 3 encompasses the company’s indirect emissions and divides them into a total of 15 categories. These are emissions that arise in the upstream and downstream stages of the value chain. They include, for example, emissions from purchased goods, from logistics, and from the use of the company’s products and services.

Germany’s law on corporate due diligence in supply chains will take effect on January 1, 2023. It obliges German companies with 3,000 or more employees in Germany to conduct human rights due diligence within their supply chains. The law is based on the United Nations Guiding Principles on Business and Human Rights.

At Körber, the term “sustainability” is used synonymously with the term “CSR” (corporate social responsibility). Although CSR is defined more narrowly in theory, because it refers to the specific contribution that companies make to sustainability, at Körber we use the term “sustainability” to express our social responsibility as a company in a concise and simple way.

This includes all measures and methods that a company imposes on itself with the aim of sustainable development in order to meet its environmental, social, and corporate responsibilities.

The 17 Sustainable Development Goals were defined as part of the United Nations’ 2030 Agenda. They combine the principle of sustainability with economic, environmental, and social development in equal measure. The goals are universal and apply to developing countries, emerging markets, and industrialized countries.

https://sdgs.un.org/goals

The system boundaries determine which locations, emission sources, and greenhouse gases are included in the emissions calculation. They thus ensure transparency with regard to the scope of the inventory. On the one hand, a distinction is made between operational system boundaries, which include the decision about the emission sources and greenhouse gases that are to be included in the emission calculation. On the other, the determination of the organizational system boundaries includes the definition of the consolidation approach to be used and thus the relevant locations for data collection and emission calculation as well as the years covered by the calculation. 

Value engineering is a process-oriented and structured method of thinking for the development of innovations or also in construction projects. The aim is to achieve the highest possible value or benefit for the customer, in relation to resources, at the lowest possible cost and resource input. The approach can be applied to specific components or an entire product.