Here you will find terminology around the Sustainability Code.


A targeted supervisory review conducted by a natural person (auditor) in which facts, information, characterisations or statements about the aforementioned (actual content) are compared with suitable benchmarks (target content) and any divergences are evaluated. In order to ensure the required procedural independence, the auditor may not be personally involved in the preparation of the actual content, either directly or indirectly. This is the main difference to a control.

Biodiversity analysis

Biodiversity analyses (or biodiversity checks) can be a tool to give organisations some initial guidance regarding the impacts and dependencies of various units of the organisation on biodiversity.


In the context of the Sustainability Code, a commonwealth is to be understood as groups of persons or authorities that are linked to each other regionally or because of certain characteristics, such as legal relations, and thus form a societal structure. A commonwealth offers its members the space wherein they can undertake political action. In democratic societies, the state is the dominant organisational form of political commonwealth, particularly with the involvement of local communities as one of its elementary subsystems. Companies can have a positive or negative influence on the economic, social or ecological conditions of a commonwealth. Corporate contributions to the commonwealth are taxes paid, employment and purchasing volume across the sites of a company. Value added statements or a common good balance sheet can provide information about this.

Conduct that complies with the law

Conduct that complies with the law relates to the avoidance of corruption and cartel arrangements and the observance of statutory provisions, e.g. regarding data protection, environmental protection or occupational health and safety (compliance). In contrast, conduct that complies with policy is about an organisation observing the rules of conduct it sets itself in the form of codes of conduct etc. (integrity). This criterion therefore encompasses both legality and legitimacy.


Consistency refers to the idea that the metrics organisations choose need to be well suited for ascertaining whether or not they have achieved the goals they set. If, for example, an organisation has set itself the goal of reducing its overall energy consumption, but it is only able to measure its electricity consumption, there is information missing (e.g. on the consumption of gas for heating and hot water) and the indicator is not consistent. Additionally, your basis of assessment must remain unchanged throughout the period under review in order to make your results meaningful.

Corporate citizenship

Corporate citizenship refers to organisations’ societal engagement above and beyond their own business operations. These traditionally encompass things like monetary donations, sponsoring or foundation activities, but also include employees’ own voluntary work.


Corruption is the abuse of entrusted power for private gain or benefit. Among other things, an extensive catalogue of crimes exists in Germany that deals with topics related to corruption. These include paying/accepting a bribe, offering/accepting unlawful advantage, etc. The Business Principles for Countering Bribery are guidelines issued by Transparency International and are addressed at companies with the aim of preventing and avoiding corruption. Further guidance is given by the OECD and the ILO conventions. In Germany, the auditing standard IDW PS 980 concretely defines compliance management requirements. Furthermore, the Extractive Industries Transparency Initiative (EITI), a global coalition of national governments, companies and civil society working together to improve transparency on the exploitation of natural resources, also outlines further requirements with respect to the issue of corruption.


CR-Kompass supports SMEs in setting up their management system for corporate responsibility (CR) and in preparing a sustainability report. CR-Kompass can also be used to prepare a progress report according to the requirements of the UN Global Compact. The Web-based application supports SMEs in CR implementation and accompanies them in preparing a sustainability report. CR-Kompass is supported by the EU’s ESF programme.


Diversity relates to employees’ differences and similarities. These may be physical attributes such as gender, ethnicity, age or disability or subjective traits such as skills, lifestyle, cultural background, sexual orientation or religion.

Due diligence

Due diligence relates to exercising due care when assessing risks with a view to identifying all the risks relevant to an organisation. The negative effects that exist or could arise as a result of a company’s business activities, products and services in terms of sustainability aspects should be monitored and, in the event of violations, appropriate remedial action should be offered.

Eco-efficiency analysis

Eco-efficiency analyses determine the relationship between goal achievement (lowest possible impact on environment) and resource usage (funds). An eco-efficiency analysis thus provides indispensable information relating to the efficiency and effectiveness of a variety of alternatives and measures for products and services. While the process of preparing a life cycle assessment is described in detail in the ISO standards 14040 and 14044, no comparable standard exists for either life cycle cost analysis or eco-efficiency analysis nor is there an internationally recognised code of conduct. (cf. also:, currently under reconstruction)

Ecological footprint

The ecological footprint is the surface area on the Earth currently required to maintain a person’s lifestyle and living standards. These areas are, for example, the land used for the production of clothing, food, and energy, but also for the disposal of waste or for binding the carbon dioxide released by human activities. The values are expressed in global hectares per person per year and vary greatly by region. This was developed by the scientists Mathis Wackernagel and William Rees in 1994.

Economy for the common good

An alternative, ethically oriented economic model developed and supported by the Austrian Association to Promote the Economy for the Common Good. The model defines business success based on a system of values oriented towards the common good. The goal of an ethical market economy is thus a good life. Human dignity, global fairness and solidarity, environmental sustainability, social justice and democratic co-determination are key elements. Using the Common Good Matrix, companies prepare a Common Good Balance Sheet.

Ecosystem services

This collective term describes the benefits and advantages of functioning ecological systems that humans make use of. It relates to, for example, the soil functions, the pollination of plants, nutrient cycling and genetic diversity, natural resources such as food, water, timber, fibres, raw materials for medicines, but also to the regulatory benefits in terms of climate, soil fertility, water resources, waste disposal. Ecosystem services include the foundations of a country’s culture, leisure and recreation, as well as its aesthetic and spiritual sensibilities.


The European Federation of Financial Analysts Societies (EFFAS) is a network of European financial analysts, which, together with the German Association of Financial Analysts (DVFA), issued a guideline on integrating environmental and social aspects into financial reporting in 2010, called KPIs for ESG (Key Performance Indicators for Environmental Social & Governance Issues). In addition to the 28 GRI performance indicators, the Code also takes into account the 16 EFFAS indicators.


EMAS (Eco-Management and Audit Scheme) is an environmental management system. EMAS, or Eco-Audit for short, was developed by the EU in 1993 and aims to help businesses improve their environmental performance by voluntarily implementing comprehensive environmental management. This is checked (certified) regularly by an external body.


The term employability is understood as the ability of people to participate in working and professional life. The prerequisites for this are, for example, having the technical and social skills which are in demand in the labour market and being of a healthy constitution, in order to be able to perform the activities required. A healthy constitution encompasses not only physical but also mental aspects, with the latter requiring extra special attention as they can impact on an employee’s performance and well-being as well as on physical complaints. The structural change that the working world is currently undergoing due to digitalisation is both a blessing and a curse. You can therefore broaden your perspective in this criterion to include, for example, how you use it to establish a healthy work climate.

Employee engagement

Employee engagement is not limited to works councils and can go above and beyond the legal standards. It can be financial in nature (e.g. in the case of cooperatives or specific company pension models) or can primarily take the form of employees having the opportunity to play a part in shaping internal workflows and have an influence on important decisions.

Employees’ rights

Employees’ rights are important in Germany – many of them are statutory and are prescribed by collective agreements. The main relevant frameworks are Germany’s Basic Law and labour law. Major issues include fair pay, protection against unfair dismissal, transparent disciplinary and dismissal practices, and agreements regarding working time, holidays and parental leave. At the global level, the core labour standards of the International Labour Organization (ILO) are especially important.

Equal opportunities

In the context of organisations, equal opportunities are about how each and every person with all their differences is nurtured in such a way that they can achieve their full potential and thus contribute to the organisation’s success. Specifically, you should describe your processes that prevent discrimination when recruiting and managing staff, that integrate migrants, that improve the work-life balance, that make training and professional development possible, and that offer everyone co-determination and fair pay equally. In this context, occupational health and safety may also need to be modified, such as introducing additional visual warning signals to guarantee the safety of hearing-impaired employees.

EU Directive on Disclosure of Non-Financial Information

In December 2014, the European Commission passed a Directive that expanded reporting requirements to include non-financial aspects and aspects related to diversity (2014/95/EU). In March 2017 this directive was made German law and ratified as part of the German Commercial Code (HGB). Companies directly affected by the reporting obligation are, in particular, capital market-oriented companies, credit institutions and insurers employing more than 500 staff or with total assets of more than € 20 million or net revenue of more than € 40 million. The law also contains special requirements with regard to consolidated reporting for capital market-oriented companies, credit institutions and insurers. For all financial years beginning after 31 December 2016 the companies affected are required to publish disclosures of individual non-financial indicators such as their environmental, fair employment and social issues as well as on respecting humans rights and combating bribery and corruption. This may be satisfied either by expanding the (consolidated) management report or by publishing a separate “non-financial (consolidated) report”. Reporting is to be carried out using a legislatively mandated standard of materiality. As per Sect. 289d HGB, reports may be prepared on the basis of framework catalogues, whereby the federal government specifically names the Sustainability Code in this context within their preamble to the Act.

German Sustainable Development Strategy

Against the backdrop of Agenda 21 passed in Rio de Janeiro, a national sustainable development strategy for Germany was first agreed in 2002. It was comprehensively revised in 2016 to take account of the 2030 Agenda passed in 2015 and the Sustainable Development Goals (SDGs) contained therein and was re-adopted in 2017. Going forward, the federal government and the Federal Statistical Office will alternate publication every two years of a report on policy continuation and assessment of the sustainability strategy or, respectively, an indicator report. In 2018, a report from the peer review carried out by a group of international experts on German sustainability policy and the implementation progress made to date was published. The German Sustainable Development Strategy focuses on action at national level that is definitive for implementation of the global SDGs.

Greenhouse Gas Protocol

The Greenhouse Gas Protocol was drafted by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). Many companies already comply with it and almost all industry-specific standards are derived from it. The Greenhouse Gas Protocol calls for direct emissions to be disclosed, such as those caused by machinery in the production process or due to business trips (Scope 1), and ideally also the emissions caused as a consequence of using electricity or caused by suppliers (Scopes 2 and 3).

GRI (Global Reporting Initiative)

The Global Reporting Initiative (GRI) is an ongoing international dialogue on corporate reporting involving companies and their stakeholders. The GRI develops guidelines aimed at improving and standardising the quality of reporting and thus making it more comparable. In 2016 the GRI G4 guidelines were developed further and are replaced by the Sustainability Reporting Standards (SRS). This transition is the result of the desire for greater modularity as well as more flexibility with regard to reporting options and formats. A selection of GRI performance indicators (alternatively EFFAS KPI) supplements reporting in accordance with the Sustainability Code.

Human rights

Human rights apply to all people equally. They are universally valid and indivisible, and no one can be deprived of them. Governments and companies have a duty to protect these rights. This makes them directly responsible for the upholding of human rights. There are various globally recognised texts that lay down the various human rights, such as the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, the International Covenant on Civil and Political Rights, the Convention on the Elimination of All Forms of Discrimination Against Women, the Convention on the Rights of the Child and the ILO’s core labour standards.

ILO (International Labour Organization)

The International Labour Organization (ILO) is a special agency of the United Nations that formulates and implements international labour and social standards. Its actions are governed by four fundamental principles: freedom of association and the right to collective bargaining, the elimination of forced labour, the abolition of child labour, and protection against discrimination in employment and occupation. On this basis, a total of eight core labour standards (conventions) have been defined: freedom of association and protection of the right to freedom of association, the right to organise and the right to collective bargaining, forced labour, the abolition of forced labour, equal remuneration, discrimination in respect of employment and occupation, minimum age, and the prohibition of and effective measures to eliminate the worst forms of child labour. Among others, Sustainability Code criteria 14–16 take up the individual issues related to the fundamental principles of the ILO. 


Incentives can be financial in nature, such as bonuses for executives and employees which are tied to the achievement of specific goals. How sustainability is handled within a company can also be markedly improved by incorporating sustainability aspects into the design of existing non-monetary incentives (e.g. internal recognition) and by creating new incentives such as leave granted for voluntary work, idea management, professional development opportunities, etc.


Product and service innovations can be geared towards reducing your company’s negative impacts on the one hand, e.g. using a more environmentally friendly material for production, as well as helping users reduce their own negative impacts on the other, e.g. with a product consuming less electricity or water when used. The same goes for services: on the one hand, a service can be created in a way which is in keeping with sustainable development. For example, changing the internal organisation of work could offer employees greater flexibility, thus improving their work-life balance. In addition, a service can support customers in becoming more sustainable themselves, such as with a sustainability-oriented advisory service (e.g. offering sustainable financial services).

ISO 14001

ISO 14001 sets the criteria for a certifiable environmental management system. This standard can be applied to companies and organisations in both the producing industry and the service sector. ISO 14001 is part of a family of standards that cover, among other things, the areas of environmental auditing, communication, labelling, performance assessment and life cycle assessment as well as other environmental aspects of product development.

ISO 26000

ISO 26000 is a management guide that the International Organization for Standardization (ISO) presented in 2010. It provides companies and organisations with recommendations on how they can operate in a socially responsible way. This is not a certifiable management standard; its application is voluntary.

ISO 50001

ISO 50001 is a standard of the International Organization for Standardization (ISO) aimed at assisting organisations and companies with setting up a systematic energy management system. The aim is to tap unused energy efficiency potential, reduce energy costs and lower greenhouse gas emissions and other environmental effects of energy consumption.

ISO 9000 group of standards

The ISO 9000 group of standards from the International Organization for Standardization (ISO) defines fundamental measures to be implemented in a company's quality management. With its eight principles (customer focus, leadership, involvement of the staff, using a process approach, encouraging continual improvement, fact-based decision-making as well as mutually beneficial supplier relationships), it is also in part a suitable instrument for sustainability management.

Life cycle approach

The main objective of a life cycle approach is to reduce the environmental impacts of products and services as well as to improve their socio-economic performance throughout their life cycle, that is, from design, extraction of raw materials, production, logistics and use through to end-of-life disposal or recovery. Companies can contribute to sustainable development at all the stages by means of innovative processes instead of simply operating so as to comply with the regulatory minimums.

Lobby lists

These include the public lists covering the registration of associations and their representatives of the German Bundestag or other national parliaments and the publicly viewable Brussels transparency register for the European Parliament and the European Commission. In addition, there is the non-public list of the Bundestag Administration for the registration of individual companies in Germany. Contrary to a lobby register, a lobby list is voluntary and comprises less information than a register; in a register, budgets, customers, topics or names of the lobbyists are to be declared.

Management systems relating to aspects of sustainability

Performance requirements relating to sustainable management are set out in specific management systems. A uniform consolidated system for sustainability management does not yet exist. The following systems relate to partial aspects of the overall system: EMAS (Eco Management and Audit Scheme – European Regulation), IDW PS 980 (national auditing standard for compliance issued by the Institute of Public Auditors in Germany), ISO 14001 (international environmental management system), ISO 9001 (international quality management system), SA 8000 (international standard relating to the minimum standards of working conditions of employees, published by Social Accountability International, an international non-governmental organisation).


The principle of materiality derives from Anglo-American accounting standards. They state that all circumstances that are material must be disclosed in the annual financial statements, because, owing to their scale, they have an impact on the result for the year. In the Sustainability Code, the principle of materiality is applied to those areas of entrepreneurial activity that have significant impact on social and environmental aspects. Using this as a measure helps to set the scope of the reporting and highlight especially important information. In the context of sustainability reporting, the respective frameworks use a variety of approaches for determining which information is material and therefore subject to reporting. In the Sustainability Code, the concept of materiality applies to the entire document.

Materiality analysis and materiality matrix

A materiality analysis (also materiality assessment) and materiality matrix are a strategic analysis tool used to determine which sustainability topics have the greatest importance for an organisation and its stakeholders. It comprises an analysis of the external environment, an analysis of the organisation’s internal environment and an analysis of stakeholders’ expectations. The results are then presented in the form of a matrix. The results of the analysis of the environment and the organisation form one axis of the matrix and the results of the analysis of stakeholders’ expectations the other. By putting the topics of relevance for the organisation and for stakeholders into relation with each other, areas for action can be derived for strategic planning.

National Action Plan for Business and Human Rights

The German National Action Plan Business and Human Rights (NAP) was agreed by the federal cabinet on 21 December 2016. The plan’s aim is to realise the implementation of the UN Guiding Principles on Business and Human Rights and in particular to improve the human rights situation throughout supply and value chains in Germany and the world as a whole. In the NAP, the federal government lays out the goal of at least 50% of all companies with over 500 employees having integrated human rights due care obligations into their processes by the year 2020. A corresponding statutory obligation does not (yet) exist, however. The NAP was drawn up over a period of two years in consultation with a variety of players from civil society, the business sector and the political arena. In addition to the Federal Foreign Office (AA), acting as lead institution, the Federal Ministry of Labour and Social Affairs (BMAS), the Federal Ministry of Economic Cooperation and Development (BMZ), the Federal Ministry of Justice and Consumer Protection (BMJV), the Federal Ministry of the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) and the Federal Ministry of Economic Affairs and Energy (BMWi) were also involved. From 2018 the NAP’s implementation will be reviewed annually by the federal government.


An objective describes a desirable state which is to be achieved by a specific time in the future on the basis of corresponding behaviour. Quantitative goals are linked with a figure, such as reducing energy consumption by 20%. Qualitative goals describe a state which is to be achieved. These should likewise be formulated such that it can be clearly ascertained whether the goal was achieved or not by X point in time, e.g. setting up a company playgroup or achieving climate neutrality.

Organisation for Economic Co-operation and Development (OECD)

In 2011, the OECD formulated guidelines for the sustainable and responsible conduct of companies (especially multinational ones).They were negotiated through an extensive international consultation process between companies, trade unions, NGOs and governments and contractually agreed between the governments of the OECD countries and a few others. However, they are not binding on companies.


Operationalising means making goal achievement measurable. To do so, the objectivity, reliability and validity of the data need to be ensured. Measurable means that the goals are defined as clearly as possible and that the plan and time frame up to goal achievement are clearly stipulated. Only then can it be determined whether and to what extent the goals really have been achieved and whether adjustments are needed (see also criterion 6: Rules and Processes).

Performance indicator

The term performance indicator refers to metrics that measure a company’s sustainability performance in qualitative or quantitative form. The indicators can be used both within internal controlling and management and in external communication. Performance indicators help users from, for example, the capital market to integrate declarations into their analysis models or to use them to determine key data (e.g. emissions per unit of power). The performance indicators selected from GRI and EFFAS (see checklist) are used as a baseline for reporting in accordance with the Sustainability Code and are reported on like the Code criteria. Sector- or company-specific performance indicators may additionally be relevant. Examples of performance indicators include energy consumption per tonne of produced product, paper consumption per employee or the proportion of women in senior management.


A policy is a clearly described programme for implementing a plan. Descriptions of (sustainability) policies refer to explanations of the strategies a company uses to approach the topic of sustainability overall and/or individual sustainability aspects, which measures it wants to implement in which time frame, how the company management is involved in these measures and which processes it wishes to implement. The respective internal due diligence processes also form part of the policies. With regard to a Code declaration, policies play a key role in two regards: due to the holistic sustainability concept of the Sustainability Code, the information provided for criteria 1–10 involves reporting on the company’s overall sustainability policy. In these sections, information is provided on overall strategy, target setting and target achievement. Companies subject to a reporting obligation as per the CSR Directive Implementation Act are required by Sect. 289c Para. 3 Nos. 1 and 2 HGB to present in their non-financial declarations, the policies they apply for the individual non-financial aspects and the results they have yielded. The reporting company only needs to report on existing policies or alternatively provide an explanation as to why no policy exists.

Political influence

Political influence encompasses both an organisation’s financial and personal links with the field of politics. Here, financial influence relates to membership fee payments, contributions to governments and donations to political parties and politicians. Personal links occur first and foremost when key decision makers within a company move into politics or vice versa. Political influence also encompasses membership in interest groups and cooperation with the relevant lobby agencies, law firms, consultancy and PR firms, foundations and think tanks. Event-driven company initiatives and membership of specific politically active working groups such as the Partnership for Sustainable Textiles are likewise classified as political influence.


A process is the targeted set of steps comprising an undertaking.

Product life cycle

The term product life cycle refers to the entire product process including prior to its market launch, while in the market and once removed from the market. This therefore includes impacts in the areas of design, raw materials, manufacture, transport, usage and reclaiming. In the interests of sustainability, recycling would be desirable at the end of this, rather than disposal. Companies can contribute to sustainable development at all the stages by means of innovative processes.


Reliability means that the same result would be achieved if the measuring process were repeated under the same conditions, indicating the result was not a product of chance. In terms of implementation, this means, for example, that the data is collected using the same methodology at all of a company’s sites in order to keep it consistent and for it to be combined. Indicators applied internally should ideally remain comparable over time in order to make any changes visible. This means, for example, that temporary employees should not be included in the company headcount one year, only to be excluded the next. If possible, indicators which are communicated externally should correspond with generally accepted standards to allow you to compare your company with others.


Resources can be of either material or immaterial nature. They encompass both the materials used in or for corporate processes (e.g. fuels, land, monies, labour, time, information systems) and so-called ecosystem services (see “ecosystem services”).

Resource efficiency

Resource efficiency in the narrow sense is about increasing raw material productivity, in other words improving the ratio of resource input to the company’s output. In the broader sense, the criterion also encompasses the option of substituting critical resources with, for example, recycled, renewable or non-toxic alternatives.


The term risks refers to events that are associated with potential negative impacts. The presentation of risks relating to the individual aspects of sustainability (criteria 11–20) that result from the business operations or the products or services serves in particular to allow for a better understanding of the company’s course of business and makes it clear what challenges a company is aware of with respect to aspects of sustainability. As per Sect. 289c Para. 3 Nos. 3 and 4 HGB and in line with the CSR Directive Implementation Act, companies subject to reporting obligation must present the principal risks which are highly likely to have a significant negative impact on the individual non-financial components. The severity of the effects should be assessed according to both extent and intensity. How the risks are managed is also to be presented. The risks to be reported on include not only those risks which are directly linked to the company’s operations but also those risks that result from their products or services or from the company’s business relationships. Companies not subject to the reporting obligation should also report on risks in their Code declaration. They may use the statutory benchmark as their orientation for this reporting, however additional presentation of risks relating to individual aspects of sustainability that goes beyond the standard requirements may aid in achieving better understanding.

Rules and processes

Rules and processes translate the sustainability strategy into more precise specifications for the company’s day-to-day activities. Rules include purchasing guidelines, guidelines for research and development, and codes of conduct for the employees. These are incorporated into a company’s day-to-day activities by means of appropriate processes, e.g. regular workshops, subject-specific working groups, new production processes and methods, and internal communication measures.

SA 8000

SA 8000 is an international standard that defines the minimum labour condition standards for employees, particularly in transnational companies. Its originator is Social Accountability International (SAI), an international non-governmental organisation which certifies companies on a voluntary basis. The standard is based on the conventions of the International Labour Organization (ILO) and the United Nations (UN).

Scope of reporting

In order to establish financial reporting comparability, for companies that are not subject to the reporting obligation of the CSR Directive Implementation Act, the Code declaration generally refers to the same group of companies as those included in the consolidated financial statements. In some cases, it may be expedient and necessary to deviate from this. As a rule, it is necessary to expand the scope beyond that of the financial reporting when discussing individual criteria relating to the supply chain, for instance. In such instances, the companies indicate this and give reasons for their decision. Companies subject to the reporting obligation of the CSR Directive Implementation Act must explain in their Code declaration with regard to scope of reporting whether they are preparing a non-financial declaration or a non-financial report that uses a scope comparable to that of the annual financial statements and the management report which focuses at its core on the individual company, or if they are preparing a non-financial declaration or a non-financial report with a scope comparable to that of the consolidated annual financial statements and the consolidated management report and as such related to the consolidated group of companies.


Stakeholders are legal or natural persons or groups of persons connected to an organisation’s sphere of activity that either have an influence on its business operations or are already or will, in the future, be significantly affected by the activities, products and/or services the organisation. These include, for instance, business partners, employees, clients and suppliers as well as municipalities, parties, associations, government bodies, non-governmental organisations, financial service providers, creditors, etc. (see criterion 2). A distinction is made between internal stakeholders, i.e. groups of people within the organisation (e.g. employees, executives, union representatives) and external stakeholders, in other words interest groups outside of the organisation (e.g. local residents, associations, media, competitors).

Stakeholder dialogues

Stakeholder dialogue refers to the discourse held with a company’s stakeholders about its sustainability strategy or sustainability goals and projects and is these days regarded as an important sustainability management instrument (see criterion 9). The AA1000 Stakeholder Engagement Standard (AA1000SES) of the non-profit network AccountAbility provides a list of principles for the successful handling of stakeholders.


In this context, a standard is a comparatively uniform and widely accepted course of action that is usually taken into account. A standard is often the result of a standardisation process. Whether a standard is established by a public or other formalised procedure or by general recognition is not decisive.

Supplier management systems

The practical implementation of increased transparency requirements in procurement management poses considerable challenges for companies, as obtaining and evaluating information can tie up significant resources. Companies increasingly find themselves confronted with numerous questionnaires and controls. Various industry initiatives and platforms offer Web-based assistance for supplier questionnaires. These include the BSCI, E-TASC, EICC, PSCI and Together for Sustainability. Platform providers include, for example, Achilles, EcoVadis, FFC (Fair Factories Clearinghouse), Intertek GSM, NQC, Sedex and SupplyShift.

Supply chain

The supply chain is the sequence of activities or parties that provides products or services to the organisation. Depending on a company’s business area, supply chains can be of different lengths or branched. The depth of the supply chain denotes the stages of extraction of raw materials, prefabrication, refining, production, sales and logistics. Furthermore, product responsibility may also refer to the use of the products by customers as well as recycling and disposal (value chain).

Sustainability aspects

Sustainability aspects are the topics that enable sustainable development in the first place. The Sustainable Development Goals or the list of topics featured in the GRI Standard can provide initial guidance regarding what sustainability aspects there are.

Sustainability Code

The Sustainability Code is aimed at companies and organisations. On the basis of 20 criteria and a selection of quantifiable performance indicators, the transparency standard describes sustainability services in a transparent and comparable form, the so-called declaration of conformity with the Code or Code declaration. With its assistance, the way in which companies embed sustainability into their core business can be assessed. Opportunities and risks become visible and can be managed proactively.

Sustainability process

The sustainability process is the development and implementation of an organisation’s sustainability strategy.

Sustainability strategy

A sustainability strategy outlines how the relevant sustainability aspects will be handled. Sustainability strategies are the core foundation of sustainability management. They relate to key processes within companies and the political arena and are to be systematically integrated into processes and measures throughout all areas. Sustainability strategies are well suited for management purposes when they contain goals and time frames as well as quantifiable indicators, are reviewed regularly and regular reporting is carried out on goal achievements and, if necessary, conflicts among goals. Authors of sustainability strategies may be organisations, companies and nation states, countries, and local governments.

Sustainable Balanced Scorecard (SBSC)

The SBSC is based on the Balanced Scorecard. It is a concept for measuring, reporting and managing an organisation’s activities in which not only financial metrics are applied, but also questions of vision and strategy. The SBSC extends this to include sustainability.

Sustainable Development Goals

The 17 development goals of the 2030 Agenda for Sustainable Development are a set of political targets agreed by the United Nations. They link the principle of sustainability with economic, ecological and social development. This system of goals is universal and applies equally to developing, emerging and industrialised countries. In this way, the new Agenda intends to form the foundation for an evolved global partnership. The SDGs were approved by the UN General Assembly and entered into force on 01/01/2016 with a term of 15 years (until 2030).

Sustainable value

Sustainable value is a tool for calculating the economic effects of a business (increase in value) by including the environmental and social burdens associated with it. The concept was developed by a group of German scientists.

Task Force on Climate-related Financial Disclosures (TCFD)

In view of the impending risk of a so-called “carbon bubble” due to the incorrect evaluation of financial investments that overlook climate risks, the G20 countries commissioned the Financial Stability Board to conduct a study. The TCFD guidelines provide recommendations for the voluntary disclosure of climate risks for affected companies in all sectors. A distinction is made between two types of risk: the physical risks related to climate change itself such as rising sea levels and extreme weather events and transitional risks for companies due to new and more stringent climate protection rules. The guidelines are for all companies that are affected by such risks either directly or indirectly. The recommendations are assigned to the core areas of a company’s governance, strategy, risk management, and metrics and targets. Each of these four areas comprises suggestions regarding the disclosure of climate-related financial risks. Measurement should comprise all Scope 1 and Scope 2 and, if applicable, also Scope 3 greenhouse gas emissions. The recommended metrics are internal carbon prices or revenue from products and services designed for a lower-carbon economy. Orienting companies’ internal objectives on science-based targets is also advisable.

UN Guiding Principles on Business and Human Rights

The UN Guiding Principles on Business and Human Rights – also known as the “Ruggie Principles” after their initiator John Ruggie – were endorsed by the UN Commission on Human Rights in 2011. They define the obligations of states and the responsibility of enterprises to honour their human rights due care obligations and provide guidance for implementing due diligence processes, among other things. They comprise an affirmation of the duty to respect human rights, methods for determining actual and potential detrimental affects on human rights, measures to prevent potential negative impacts and for assessing the efficacy of these measures, reporting and a complaint reporting mechanism accessible to all those potentially affected.

United Nations Global Compact (UNGC)

United Nations Global Compact (UN Global Compact) is an initiative of the United Nations for companies that commit themselves to aligning their operations with the ten principles of sustainability. These include human rights, labour standards, environmental protection and the fight against corruption, among others. The large majority of content from a company’s Communication on Progress (CoP) can be taken over for a Code declaration. And vice versa: supplemented by a statement from management affirming the company’s ongoing commitment to the Global Compact, the declaration of conformity can be considered a complete Communication on Progress.

Value chain

The value chain is the entire sequence of activities or parties that provide or receive value in the form of products or services. Activities may include: raw material procurement, prefabrication, finishing, sales, logistics, and the recycling and disposal of used products. Parties that provide value include suppliers, outsourced workers, contractors and others. Parties that receive value include customers, consumers, clients, members and other users. Compared to the value chain, the supply chain is therefore the broader term.

VfU environmental performance indicators

The VfU environmental performance indicators are performance indicators for the financial sector issued by the Association for Environmental Management and Sustainability in Financial Institutions (VfU) and have become a globally accepted standard with which financial institutions can report on their environmental performance. The VfU performance indicators and the corresponding calculation tool are regularly revised by a VfU project group every two to three years to take into account the benchmarks of the international environmental indicator systems (Global Reporting Initiative) and greenhouse gas footprinting standards such as the Greenhouse Gas Protocol.