Learn the Language

With sustainability moving to center stage in the investment arena, it is important for advisors and professionals to understand various terminology and acronyms used by the sustainability community. Key acronyms include:

CDP: With the goal of a sustainable economy, the CDP (formerly the Climate Disclosure Project) shapes global environmental reporting through voluntary disclosure by companies, state and local governments, investors, and others to manage their environmental impacts.
ESG: Environmental, Social, and Corporate Governance refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. Analysis of these criteria is thought by some to help to better determine the future financial performance of companies.
FSB: An international body, the Financial Stability Board (FSB) works to stabilize and strengthen financial systems and global financial markets by assessing vulnerabilities, establishing guidelines, developing best practices, and more.
RCP: A set of climate scenarios that model future paths based on different assumptions around renewable energy use, efforts to curb carbon emissions, and more, Representative Concentration Pathways (RCPs) range from RCP 2.6 to RCP 8.5 with RCP 8.5 representing the highest concentration of greenhouse gases in the atmosphere in the year 2100 and 2.6 representing the lowest.
PRI: The Principles of Responsible Investing work to understand the investment implications of ESG factors; to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. Over the last decade, the number of signatories to the Principles for Responsible Investment (PRI) has grown from 100 to more than 3,000.
SASB: Used to guide the disclosure of financially material sustainability information by companies to their investors, Sustainability Accounting Standards Board (SASB) Standards identify the subset of ESG issues "most relevant to financial performance in each of 77 industries."

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