Reference materials and notes laid out on a desk

Glossary

The terminology — defined plainly.

ESOS, CSRD, SECR, TCFD, ISSB, SBTi, BVCM. The acronyms make sense once they're named. Use this as the reference whenever a brief, a tender or a board paper uses something you'd like cleaner ground on.

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Regulation

ESOS: UK mandatory energy assessment scheme for large undertakings. Phase 4 introduces a mandatory action plan alongside the four-yearly audit, with a December 2027 compliance deadline.
PSDS: UK capital grant scheme administered by Salix funding heat-decarbonisation, energy-efficiency and low-carbon technology projects in the public sector.
SECR: UK requirement for large companies to disclose energy use, GHG emissions and energy-efficiency actions within their annual report.
SHDF: UK funding scheme supporting fabric-first retrofit of social housing toward EPC C or higher.

Reporting

CSRD: EU directive mandating sustainability disclosure against the European Sustainability Reporting Standards (ESRS). Catches UK groups with EU subsidiaries.
Double materiality: Assessment that considers both how sustainability matters affect the organisation (financial materiality) and how the organisation's activities affect people and the environment (impact materiality). Core CSRD concept.
ISSB: Body under the IFRS Foundation that issues the global baseline for investor-focused sustainability disclosure. IFRS S1 covers general sustainability; S2 covers climate.
TCFD: Investor-focused climate disclosure framework structured around governance, strategy, risk management and metrics & targets. Mandatory for UK premium-listed companies since 2021.

Accounting

M&V: Practice of measuring actual energy or carbon savings against a modelled baseline using a recognised protocol (commonly IPMVP) — the evidence trail behind performance claims.
Scope 1, 2, 3: Direct emissions from owned sources (Scope 1), indirect emissions from purchased energy (Scope 2), and value-chain emissions both upstream and downstream (Scope 3).

Targets

BVCM: Investment in emissions reductions or removals outside an organisation's own value chain — distinct from in-value-chain reduction and from offsetting residual emissions.
MACC: Decision tool ranking decarbonisation interventions by cost per tonne of CO₂e saved, used to sequence capital toward the highest-leverage measures first.
Residual emissions: The emissions remaining after an organisation has reduced its value-chain emissions in line with a 1.5°C pathway. Net-zero requires these to be neutralised through permanent carbon removal.
SBTi: Partnership defining and promoting best practice in setting science-based emissions-reduction targets aligned to a 1.5°C warming limit.

Buildings

BREEAM: UK-led building sustainability assessment widely used in investor and public-sector procurement.
EPC: Mandatory UK certificate rating a building's energy efficiency (A to G), required at the point of sale or letting, and the basis for MEES compliance.
MEES: UK regulation setting minimum EPC ratings for let property. Commercial sector tightening to EPC B by 2030; residential proposed EPC C.
Passivhaus / EnerPHit: Performance-based ultra-low-energy building standards from the Passive House Institute. Passivhaus applies to new-build; EnerPHit applies to retrofit.

Risk

NGFS pathways: Climate scenarios published by the Network for Greening the Financial System, used for TCFD and ISSB scenario analysis. Range from Net Zero 2050 through to Current Policies.
Physical risk vs transition risk: Two categories of climate-related financial risk. Physical risk is direct (extreme weather, sea level, heat stress); transition risk is indirect (policy, technology, market and reputational change as the economy decarbonises).

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