Sustainability lexicon – All terms relating to CSRD explained
Want to quickly understand what CSR, ESG and Net Zero mean? Our sustainability lexicon explains terms such as CBAM and SFDR simply and concisely.
- CSRD, ESRS, ESG, GRI, SBTi: sustainability reporting comes with a lot of abbreviations. This lexicon explains the most important ones.
- The CSRD now applies only to companies with more than 1,000 employees AND more than €450m net turnover (both criteria, since 18 March 2026).
- Double materiality is the core assessment concept under CSRD: companies must look at both their impact on the world and the world's impact on their finances.
- The ESRS are the reporting standards that specify what companies must actually disclose under the CSRD.
- This lexicon is a quick reference. Bookmark it and come back whenever you encounter an unfamiliar term.
CSRD, ESRS, CSDDD, SBTi. Do you know all these abbreviations? New sustainability regulations are slowly taking shape, and companies are constantly coining new terms in this area. In the jungle of sustainability reporting, it is difficult to maintain an overview. This article serves as your sustainability lexicon through the maze of abbreviations relating to sustainability and the Corporate Sustainability Reporting Directive (CSRD), explaining key terms and putting them into context.
Your sustainability lexicon from A to Z
Sustainability terms from A to D
CBAM (Carbon Border Adjustment Mechanism): The CBAM is an EU mechanism that levies import duties on CO2-intensive goods in order to create a level playing field and support global climate protection efforts. It aims to prevent carbon leakage and promotes environmentally friendly production methods worldwide.
CCF (Corporate Carbon Footprint): The CCF measures the total amount of greenhouse gas emissions generated directly and indirectly by a company's activities. It is a key indicator of an organisation's environmental impact and serves as the basis for strategies to reduce emissions and promote sustainability.
CDP (Carbon Disclosure Project): The CDP is an international non-profit organisation that encourages companies and cities to disclose their environmental data, particularly with regard to CO2 emissions, forest and water management. Through this transparency, the CDP supports investors, companies and cities in making environmentally conscious decisions and promoting sustainable practices.
CSDDD (Corporate Sustainability Due Diligence Directive): The CSDDD, also known as CS3D, is a European Union directive that requires companies to conduct due diligence on sustainability in their supply chain. It aims to protect human rights and environmental standards by encouraging companies to identify, prevent and mitigate potential and actual impacts of their business activities on these areas. This directive has significantly stricter regulations in several areas compared to the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG).
CSR (Corporate Social Responsibility): CSR stands for the voluntary responsibility of companies for the social, ecological and economic aspects of their actions, which goes beyond legal requirements. It includes measures to promote ethical behaviour, environmental protection, social justice and economic sustainability, whereby companies make a positive contribution to society.
CSRD (Corporate Sustainability Reporting Directive): The CSRD is an EU directive that places extended requirements on corporate sustainability reporting. It obliges companies to report in detail on their environmental, social and governance (ESG) impacts, and on what effects environmental changes can have on the company. The aim is to increase transparency and consistency in sustainability reporting and thus contribute to a more sustainable economy. Since 18 March 2026, the reporting obligation applies only to companies with more than 1,000 employees AND more than €450m net turnover (both criteria must be met).
DNK (German Sustainability Code): The DNK is a framework for sustainability reporting by companies in Germany. It defines standards for transparency and comparability in the areas of environment, social affairs and corporate governance. The Code serves as a guideline for companies to effectively communicate their sustainability performance and thus promotes the integration of sustainability into core business.
Double materiality: The term "double materiality" refers to an important concept in CSRD sustainability reporting that takes into account both the financial and non-financial (ESG-related) impacts of a company. This concept is applied through the implementation of a Materiality Assessment and recognises that certain aspects that are material to a company's sustainability and social responsibility can also have a significant impact on its financial performance. Double materiality emphasises the need to integrate both types of impacts in reporting to provide a complete picture of the company's performance.
Sustainability terms from E to I
EFRAG (European Financial Reporting Advisory Group): EFRAG is an organisation that provides advice and expertise in the field of financial reporting in Europe. Its main role is to make recommendations for the adoption of International Financial Reporting Standards (IFRS) and CSRD in the EU and to contribute to improving the quality of financial and sustainability reporting. EFRAG also plays an important role in the development of sustainability reporting standards by advising and supporting the European Commission in these matters.
EmpCo Directive (Empowering Consumers for the Green Transition): With the EmpCo Directive, the EU is taking a strong stance against greenwashing. It has been in force across the EU since March 2024 and must be transposed into national law by 2026. The EmpCo aims to empower consumers by preventing misleading environmental and sustainability claims and promoting informed purchasing decisions. In the future, companies may only make "green" promises if they are clear, verifiable, and substantiated.
ESG (Environmental, Social and Governance): ESG refers to three central factors for assessing the sustainability and ethical impact of investments in companies. "Environmental" stands for environmental aspects such as climate protection and resource use, "social" covers social responsibility, for example in relation to working conditions and diversity, and "governance" relates to corporate management, including transparency and the fight against corruption. ESG criteria are essential for investors and companies that want to promote sustainable and responsible business practices.
ESRS (European Sustainability Reporting Standards): The ESRS are a set of standards for sustainability reporting, developed as part of the EU strategies for sustainable finance. These standards are intended to enable consistent and comparable reporting on environmental, social and governance (ESG) aspects of companies. They aim to improve the transparency and reliability of sustainability information used by investors and other stakeholders to make informed decisions.
EU taxonomy: The EU taxonomy is a classification system that defines which investments can be considered environmentally sustainable. It is part of the EU Sustainable Finance Strategy and aims to prevent greenwashing by providing clear criteria and definitions for sustainability in different sectors of the economy. The taxonomy helps investors, companies and policy makers to identify which activities can be considered sustainable, thus encouraging investment in green projects and helping the EU achieve its climate goals.
GHG (Greenhouse Gas Protocol): The Greenhouse Gas Protocol is an internationally recognised standard for the recording and management of greenhouse gas emissions. It provides a framework and guidelines for companies and governments to systematically measure and report their emissions. This standard helps to identify sources of emissions, promotes transparency in reporting and supports efforts to reduce greenhouse gas emissions in the fight against climate change.
Greenwashing: Greenwashing is a practice in which companies make misleading or exaggerated claims about their environmental friendliness or sustainability in order to create a positive image without actually taking substantial measures for environmental protection or social responsibility. This can be done through false advertising, unverifiable claims or the deliberate concealment of environmental impacts. Greenwashing deceives consumers and investors and can lead them to make the wrong decisions because they assume that a company is acting sustainably when this is not the case.
GRI (Global Reporting Initiative): The GRI is an international organisation that develops standards for sustainability reporting. These standards provide companies and organisations with a framework for reporting on their impact on the environment, society and the economy. The GRI guidelines aim to improve the transparency and comparability of sustainability information worldwide and support companies in communicating their responsibility to stakeholders and society.
IFRS (International Financial Reporting Standards): IFRS are international accounting standards developed by the International Accounting Standards Board (IASB). They serve as a framework for the preparation of financial reports by companies worldwide. IFRS sets out principles and rules for the recognition, measurement and disclosure of financial information. Their aim is to improve the comparability of financial reports and to provide investors, analysts and other interest groups with accurate and consistent information. IFRS are mandatory in many countries, particularly in the European Union.
ISSB (International Sustainability Standards Board): The ISSB is an international body set up by the International Financial Reporting Standards (IFRS) Foundation. Its main objective is to develop global standards for corporate sustainability reporting. The ISSB aims to create a uniform framework for reporting on ESG issues in order to promote transparency and comparability in sustainability reporting.
Sustainability terms from J to Z
LkSG (Supply Chain Due Diligence Act): The LkSG is a German law that obliges companies with more than 1,000 employees to ensure compliance with human rights and environmental standards in their global supply chain. It stipulates that companies must analyse risks, take preventive measures and submit regular reports on their supply chain activities.
Net zero: Net zero refers to the state in which the greenhouse gases emitted by a given source are fully offset by emission reductions or compensation measures, leaving no net greenhouse gas emissions. This goal is crucial in the fight against climate change and is often pursued by governments, companies and organisations. To achieve net zero, emissions must be drastically reduced and remaining emissions offset through measures such as reforestation or carbon sequestration. Net zero is a key element of the Paris Agreement, which aims to limit global warming to below 2 degrees Celsius.
NFRD (Non-Financial Reporting Directive): The NFRD is an EU directive on non-financial reporting by companies. It obliges large companies with more than 500 employees to disclose information on environmental, social and employee matters, respect for human rights and the fight against corruption and bribery. The aim of the NFRD is to increase transparency and comparability in non-financial reporting and to enable investors and other interest groups to better assess the sustainability performance of companies. The CSRD expands on the NFRD and significantly extends its scope of application.
PCF (Product Carbon Footprint): The PCF is a method for calculating the total greenhouse gas emissions generated during the entire life cycle of a product. This life cycle includes the manufacture, transportation, use and disposal of the product. The PCF enables companies and consumers to assess the environmental impact of products and make decisions that help to reduce emissions. It is an important approach to promoting sustainable production and consumption practices.
SBTi (Science Based Targets Initiative): The SBTi is an initiative that supports companies in setting science-based climate targets. These targets aim to limit the global temperature increase to below 2 degrees Celsius compared to pre-industrial times, as set out in the Paris Agreement. The SBTi provides companies with scientific criteria and methods to ensure that their emission reduction targets are compatible with current climate goals. By implementing science-based targets, companies can contribute to reducing greenhouse gas emissions while achieving long-term sustainability goals.
SFDR (Sustainable Finance Disclosures Regulation): SFDR is an EU regulation designed to promote sustainability in the financial sector. It requires market participants such as asset managers and investment funds to disclose information on how they integrate ESG factors into their investment processes and risk management. SFDR aims to provide investors with transparency on the sustainability aspects of financial products and services to enable them to make more informed investment decisions. It is part of the EU's broader efforts to align financial markets with sustainable development goals and tackle climate change.
TCFD (Task Force on Climate-related Financial Disclosures): The TCFD is a working group set up by the Financial Stability Board (FSB) in 2015. Its task is to develop recommendations for the disclosure of climate-related financial information by companies. The TCFD recommendations set standards for reporting on climate risks and opportunities in order to provide investors, companies and other stakeholders with sound information. Implementing the TCFD recommendations helps to improve transparency and understanding of climate-related financial impacts and promotes adaptation to climate change.
Further abbreviations and terms are explained in Appendix 2 "Abbreviations and Glossary" of the European Sustainability Reporting Standards (ESRS).
This sustainability lexicon provides a comprehensive overview of key terms in the field of CSRD and sustainability reporting. It is intended as a quick reference or as a resource to bookmark and return to whenever you encounter an unfamiliar term.
Knowing the terms is one thing. Knowing which data points you actually need to report is another. Our ESRS data points template maps all relevant disclosure requirements so you can plan your reporting efficiently.
Frequently asked questions about the sustainability lexicon
What is the difference between CSRD and ESRS?
The CSRD is the EU directive that legally obliges certain companies to report on sustainability. The ESRS are the technical reporting standards that specify exactly what information must be disclosed and how. Think of the CSRD as the "law" and the ESRS as the "rulebook" that gives it substance.
Which companies are required to report under the CSRD?
Since 18 March 2026, the CSRD obligation applies to companies with more than 1,000 employees AND more than €450m net turnover. Both criteria must be met at the same time. This is a significant change from earlier rules that used a lower threshold based on any two out of three criteria.
What does double materiality mean in practice?
Double materiality means you assess sustainability topics from two directions. First, you look at how your company affects the environment and society (impact materiality). Second, you assess how sustainability-related developments affect your company's finances (financial materiality). Topics that are significant in either direction must be reported under the CSRD. Our materiality analysis template can help you work through this process.
What is the difference between ESG and CSR?
CSR (Corporate Social Responsibility) is a broader concept describing a company's voluntary commitment to acting responsibly towards society and the environment. ESG (Environmental, Social and Governance) is a more structured framework used primarily by investors and analysts to measure and compare that responsibility using specific criteria. In practice, the two terms often overlap, but ESG is more data-driven and measurable.
