Glossary

De-jargoned: Glossary of ESG terms

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There are currently 7 relevant ESG terms in this directory beginning with the letter T.
Tag-along Rights
Rights that grant minority shareholders the ability to dispose of shares on the same terms as majority shareholders. [Source: Stanford: Corporate Governance Research Initiative]

TCFD - Task Force on Climate-related Financial Disclosures
TCFD is a powerful organization tasked by the global Financial Stability Board with bringing uniformity to climate-related corporate risk disclosure. It released a voluntary reporting framework for companies in G20 countries in financial and four non-financial industry groups. The four other industry groups are energy, transportation, materials and buildings, and agriculture (both food and forest products.) Investors, lenders and underwriters are the primary audience. TCFD emphasizes the use of climate risk scenario analysis to assess the resiliency of business strategies. TCFD prefers integrated disclosure in financial filings but leaves the option to companies as to where to disclose. The other frameworks, including GRI, SASB, CDP, and CDSB aligned their reporting frameworks to the TCFD recommendations. [Source: Global Affairs Associates]

Thematic Investing
Investment in businesses contributing to sustainable solutions both in environmental or social topics (or themes). In the environmental segment this includes investments in renewable energy, energy efficiency, clean technology, low-carbon transportation infrastructure, water treatment and resource efficiency. In the social segment this includes investments in education, health systems, poverty reduction and solutions for an ageing society. [Source: Swiss Sustainable Finance]

Thun Group of Banks
The "Thun Group of Banks" is an informal group of bank representatives that have been discussing the meaning of the "Guiding Principles for the implementation of the United Nations 'Protect, Respect and Remedy' Framework on Business and Human Rights" ("Guiding Principles") in regards to universal banks and how they could be applied in relation to banking activities. [Source: Swiss Sustainable Finance]

Tin Parachute
A severance agreement that allows every employee in a company who is terminated without cause following a change in control to receive both a cash payment and immediate vesting of all unvested stock options and restricted shares. [Source: Stanford: Corporate Governance Research Initiative]

Transition Risk
The financial risks that could result from significant policy, legal, technology and market changes as we transition to a lower-carbon global economy and climate resilient future. [Source: Allianz]

Triple Bottom Line
An accounting framework originally developed in an effort to measure sustainability. Triple bottom line is also referred to as TBL or 3BL. TBL goes beyond traditional measures to incorporate three additional dimensions of performance: social, environmental (or ecological) and economic. Michael Porter has more recently popularized a Shared Value framework that has similar elements and emphasizes the importance of expanding the value created for shareholders to all stakeholders. [Source: Schroders]

Sources:

  1. Allianz Global Investors, ESG Glossary, Retrieved: September 12,2020
  2. First Affirmative Financial Network, Glossary of Responsible Investing Terms, Retrieved: September 12,2020
  3. Global Affairs Associates, ESG Glossary, Retrieved: September 12,2020
  4. Invesco Ltd., Glossary: Understanding ESG jargon, Retrieved: September 12,2020
  5. Nuveen, LLC., Glossary: Responsible investing, Retrieved: September 12,2020
  6. Schroders Investment Management North America Inc., Understanding sustainable investment and ESG investment terms, Retrieved: September 12,2020
  7. Stanford Graduate School of Business, Corporate Governance Research Initiative, Retrieved: September 12,2020
  8. Swiss Sustainable Finance, Glossary, Retrieved: September 12,2020

Disclaimer: This glossary is NOT intended to be an authoritative reference document. All information in this glossary is for educational use only. This glossary has been compiled based on public domain information available on the websites of the mentioned sources. While due care has been taken in compiling this glossary, ESGSense does not assume any liability for any inaccuracy or factual error. Any term or definition mentioned here does NOT constitute financial or investment advice. ESGSense assumes no liability for any financial decisions and/or investments made on the basis of information gained from this glossary.