Concept Guide
ESG: the core ideas
ESG looks at environmental, social and governance issues that can change a company's cash flows, risks and cost of capital. The core ideas, the Indian rules, and the limits of ESG data.
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ESG foundations
47 pages carry this tag.
Concept Guides
Concept Guide
ESG, CSR, sustainability and impact: four different things
ESG, CSR, sustainability and impact are often used as if they mean the same thing. They do not. The four terms, who uses each, and how to tell them apart in an annual report.
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Concept Guide
Materiality: financial, impact, double and dynamic
Materiality decides which ESG issues matter for a company. The four types of materiality, how a materiality assessment works, and how to read one in an annual report.
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Concept Guide
The global climate framework: UNFCCC, Paris Agreement, NDCs and COPs
How the world agrees on climate action. The UN Framework Convention, the Kyoto Protocol, the Paris Agreement, national climate plans (NDCs) and the yearly COP meetings, and why they matter to investors.
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Concept Guide
India's climate commitments: Panchamrit, NDCs and net zero by 2070
India's climate targets, from the Panchamrit goals announced at COP26 to the 2035 NDC submitted in 2026. What India has promised, what it has achieved, and what it means for Indian companies.
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Concept Guide
The UN Sustainable Development Goals
The 17 Sustainable Development Goals are the world's shared to-do list for 2030. The goals, how companies and investors use them, and how to spot SDG-washing.
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Concept Guide
Greenwashing and its relatives
Greenwashing means making a company or product look better for the environment than it really is. The common forms, India's rules against it, its relatives (greenhushing, social washing, impact washing) and a red flag checklist.
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Concept Guide
The ESG debate: the case for and the case against
ESG has strong supporters and strong critics. The best arguments on both sides, the recent backlash, and a practical position for analysts that does not depend on which side wins.
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Concept Guide
Stakeholders and stakeholder mapping
Stakeholders are the people and groups who affect or are affected by a company. The main stakeholder groups, two simple mapping tools, and how stakeholder issues turn into financial risk.
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Interactive Lessons
Lesson
Spot the greenwashing
Eight claims from hypothetical company reports, adverts and bond documents. Decide whether each is likely greenwashing, needs more detail, or is credible.
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Glossary
Glossary
Greenwashing
Making a company, product or investment look better for the environment than it really is.
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Glossary
ESG (environmental, social and governance)
A framework for analysing environmental, social and governance issues that can affect a company's cash flows, risks and cost of capital.
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Glossary
Sustainability
Meeting today's needs without reducing the ability of future generations to meet theirs.
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Glossary
Stakeholder capitalism
The view that companies should serve the interests of all their stakeholders, not only shareholders.
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Glossary
Shareholder primacy
The view that a company's main purpose is to maximise value for its shareholders.
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Glossary
Triple bottom line
An approach that measures company performance on three dimensions: people, planet and profit.
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Glossary
Materiality
The test of whether an issue matters enough to influence decisions about a company.
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Glossary
Financial materiality
An ESG issue is financially material if it could affect a company's cash flows, risk or cost of capital.
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Glossary
Impact materiality
An issue is impact-material if the company has a significant effect on people or the environment through it.
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Glossary
Double materiality
Treating an issue as material if it passes either the financial materiality test or the impact materiality test.
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Glossary
Dynamic materiality
The idea that an issue's materiality changes over time, often moving from impact-only to financially material.
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Glossary
Sustainable Development Goals (SDGs)
Seventeen goals adopted by UN member countries in 2015 as part of the 2030 Agenda for Sustainable Development.
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Glossary
Paris Agreement
The 2015 international climate treaty that aims to keep warming well below 2°C and to pursue a 1.5°C limit.
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Glossary
Nationally determined contribution (NDC)
A country's own climate plan and targets submitted under the Paris Agreement, updated every five years.
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Glossary
COP (Conference of the Parties)
The yearly meeting of countries that are parties to the UN climate convention, where climate rules and targets are negotiated.
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Glossary
1.5°C goal
The Paris Agreement aim of limiting global warming to 1.5°C above pre-industrial levels.
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Glossary
Net zero
A state where the greenhouse gases put into the atmosphere are balanced by the amount removed from it.
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Glossary
Carbon neutral
A claim that a company's or product's emissions have been fully balanced, usually by buying carbon offsets.
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Glossary
Climate positive
A claim that a company removes or offsets more greenhouse gases than it emits.
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Glossary
Just transition
Moving to a low-carbon economy in a way that protects the workers and communities who depend on high-carbon industries.
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Glossary
Greenhushing
Deliberately saying little or nothing about climate targets or progress, to avoid scrutiny or criticism.
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Glossary
Social washing
Overstating a company's or fund's social credentials, such as labour standards, diversity or community benefits.
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Glossary
Impact washing
Claiming measurable social or environmental impact without evidence, or for results that would have happened anyway.
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Glossary
Value chain
All the activities and partners involved in making and delivering a product, from raw materials to end use and disposal.
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Glossary
Upstream
The part of a company's value chain before its own operations, including suppliers and raw materials.
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Glossary
Downstream
The part of a company's value chain after its own operations, including distribution, product use and disposal.
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Glossary
Stakeholder
Any person or group that affects, or is affected by, a company's activities.
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Glossary
UNFCCC (United Nations Framework Convention on Climate Change)
The 1992 UN treaty that sets the overall framework for international climate negotiations.
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Glossary
Kyoto Protocol
A 1997 climate treaty that set binding emission cuts for developed countries only.
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Glossary
IPCC (Intergovernmental Panel on Climate Change)
The UN body that assesses the science of climate change and publishes major reports for policy makers.
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Glossary
CBDR-RC (common but differentiated responsibilities and respective capabilities)
The principle that all countries share responsibility for climate change, but richer, higher-emitting countries should do more.
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Glossary
CSR (corporate social responsibility)
A company's spending on social and environmental causes outside its core business; in India, a legal requirement for larger companies.
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Glossary
Article 6 (Paris Agreement)
The part of the Paris Agreement that allows countries to cooperate on emission cuts, including by trading carbon credits.
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Glossary
Global Stocktake
A review under the Paris Agreement, held every five years, of collective progress towards its climate goals.
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Glossary
Emissions intensity of GDP
A country's greenhouse gas emissions per unit of economic output, the main form of India's national emissions target.
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Glossary
Non-fossil capacity
Installed electricity generating capacity from sources other than fossil fuels: renewables, large hydro and nuclear.
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Related topics: Valuation, DCF, Relative valuation, Cost of capital, Financial statements, Cash flow, Earnings quality, Red flags