Glossary

Question 1

Define: Accounting metrics

Answer 1

Quantitative and/or discussion and analysis metrics intended to measure performance on a sustainability disclosure topic

Question 2

Define: Activity metrics

Answer 2

Metrics used to quantify the scale of a business. They are used in conjunction with accounting metrics to normalize data and facilitate comparison.

Question 3

Define: Actual impacts

Answer 3

A form of financial impact that is actively observable and measurable. They rpresent actual trends, events, or upcoming changes that are occurring or will occur with a high degree of certainty.

Question 4

Define: Acute impacts

Answer 4

Impacts on a company’s financial condition or operating performance that may be rare or unlikely but can have significant consequences, such as extreme weather events or unanticipated accidents.

Question 5

Define Alliance organizations

Answer 5

A formal association formed for the mutual benefit of member organizations in association with specific shared interests or goals. Member organizations benefit from a communication network, shard resources, and collaboration.

Question 6

Define: Alpha

Answer 6

The return on an investment in excess of a market index or benchmark

Question 7

Define: Assurance readiness:

Answer 7

Assessed through internal audits or other internal disclosure procedures, assurance readiness seeks to determine the appropriate level of external assurance and overall preparedness of a company to smooth the assurance process and control related assurance expenses.

Question 8

Define: Assurance

Answer 8

A service performed by external, independent professional(s) to declare the credibility of disclosed data, statements, and other information, typically accompanied by an assurance report and/or assurance statement.

Question 9

Define: Audit committee

Answer 9

A committee of the board of directors charged with overseeing financial reporting and disclosure, including disclosure related to financially material sustainability information.

Question 10

Define: Audits

Answer 10

An official, independent examination of an organization’s financial and/or non-financial statements to ensure they fairly and accurately represent the transactions/activities of the company.

Question 11

Define: Benchmarks

Answer 11

A standard or point of reference used to evaluate the performance of a security, portfolio, fund, or investment manager. Stock and bond indexes are often used as benchmarks.

Question 12

Define: Boilerplate

Answer 12

Nonspecific wording that does not describe the realities of a company’s particular operating context.

Question 13

Define Certifications

Answer 13

For public companies, disclosure regulations often require executive certifications of internal controls where an executive, typically the CEO and/or CFO must certify the accuracy and completeness of disclosed information.

Question 14

Define: Coalitions:

Answer 14

A formal group of companies and organizations formed, sometimes temporarily, in pursuit of combined action towards a specific outcome. Coalition members often collaborate and collectively communicate goals and developments related to the particular topic of their coalition.

Question 15

Define: Company (or security) valuation

Answer 15

The process of determining the economic value of an entire business. Company valuation may consider factors such as future earnings, management, capital structure, asset value, risks, and other factors.

Question 16

Define: Company-tailored narrative

Answer 16

Specific language in a disclosure that can be understood only in the context of the reporting company

Question 17

Define: Comparative analysis

Answer 17

Often part of fundamental analysis, comparative analysis aims to compare industry peers or security values to assess their intrinsic value, which may or may not be accurately reflected by market capitalization or stock prices.

Question 18

Define: Comply-or-explain

Answer 18

Provisions that require disclosure of particular information, but allow reporting entities to omit the information and provide an explanation for the omission.

Question 19

Define: Conceptual framework

Answer 19

A document that defines the principles and characteristics of the standard-setting process, ensuring all standards are developed consistently, providing a framework to resolve questions that emerge throughout the standard-setting process, and allowing users of the standards to understand the process and have confidence in the quality of the standards.

Question 20

Define: Corporate Governance Codes

Answer 20

Rules, either mandatory or voluntary, that define standards and responsibilities for corporate boards to protect shareholder investments, including standards for ethical behavior and responsible decision making.

Question 21

Define: Credit risk

Answer 21

The risk of a borrower defaulting on its ability to make required payments (interest or principal) resulting in a loss to the lender

Question 22

Define: Data aggregators

Answer 22

Organizations that compile raw data, often presenting it in a format to support analysis

Question 23

Define: Disclosure platforms

Answer 23

A software-based interface that supports ESG report preparation and disclosure by establishing workflows and supporting data management

Question 24

Define: Disclosure topics

Answer 24

The topics in SASB Standards that represent the industry-specific impacts of general sustainability issue categories. Metrics are used to measure company performance on a disclosure topic.

Question 25

Define: Discussions and Analysis (D&A) metrics

Answer 25

Narrative data used to explain processes, practices, risks, past events, or to otherwise provide important context to quantitative metrics.

Question 26

Define: Double materiality

Answer 26

Materiality has two components; financial materiality, or that which applies to the value of the company; and environmental and social materiality, or that which applies to a company’s impacts on a broader society.

Question 27

Define: Dynamic materiality

Answer 27

Information that is material can change over time. An ESG issue that is not critical to a company’s success may become critical as markets, resource availability, regulation, customer awareness, or other factors shift over time.