We all agree COP26 should be about actions, but the reality is it has mainly been about words. It started off with pledges from leaders and politicians but will hopefully lead to some actionable policies that help lead the world down the path to Net Zero.
But with most policies come endless written documents, filled with further words and acronyms. Our glossary puts all the key terminology and acronyms relating to Climate Change policy, forums, negotiations and terms in one place. With increased understanding, we can all drive increased accountability and commitments.
The Paris agreement key goal is to limit global warming to “well below 2C”, while “pursuing efforts” to limit temperature rises to 1.5C above pre-industrial age - I.e 1850, when we started to burn lots of fossil fuels. The latest climate science from IPCC found that even at 1.5C, we will see severe climate change impacts from extreme-weather events, sea level rise to biodiversity loss, which is why “keeping 1.5C alive” is the motto of COP26.
BES – Bank of England’s Biennial Exploratory Scenario
Running biennial exploratory scenarios allows policymakers to probe the resilience of the UK financial system to a wide range of risks, and is a tool to enhance participants’ strategic thinking on how to manage those risks. The 2021 exercise explores the resilience of the largest UK banks and insurers to the physical and transition risks associated with climate change.
Blah Blah Blah
Expression coined by Climate activist Greta Thunberg in September 2021 to referring to the climate buzzwords, taglines empty promises not delivering the urgent actions needed.
CCS or CCUS - Carbon Capture Utilisation and Storage
A set of emissions reduction technologies and methods allowing to remove CO2 from the atmosphere and directly from Carbon emitting facilities. The CO2 is then recycled for use or permanently stored. Given the accumulation of CO2 in the atmosphere and the lifetime of hundreds of years, Carbon Capture Utilisation and Storage technologies are key to reach Carbon neutrality.
CCC - Climate Change Committee
The Climate Change Committee is an independent body advising the UK government on how to tackle Climate Change.
Climate Change Scenario Models are data-based simulations of the effect of the accumulation of greenhouse gases in the future. At Baringa, we developed industry-leading Climate Models to help businesses understand the impacts of climate change on their organisation and / or investments so as to help them design and implement strategies to prevent and mitigate them.
COP - Conference Of the Parties
Few COP26 attendees got this acronym right. Conference Of the Parties to the United Nations framework on Climate Change (UNFCCC). Glasgow is hosting the 26th.
CTP - Credible transition plans / Climate Transition Plan
Credible Climate transition plans refer to nations or organisations time-bound action plans clearly describing how they will achieve their transition to Climate neutrality in line with the pathway to 1.5C or whatever climate objective they have set. They should include strategies to pivot their operations, assets, business model and potentially influence those of their clients – especially if they are lending money to others.
CST - ECB Climate Risk Stress Test
The ECB will be conducting a stress test on climate-related risks in 2022, to be called the 2022 ECB Climate Risk Stress Test (CST). The ECB considers this stress test to be a learning exercise for banks and supervisors alike. It aims to identify vulnerabilities, industry best practices and the challenges faced by banks. The exercise will also help enhance data availability and quality, and allow supervisors to better understand the stress-testing frameworks banks use to gauge climate risk.
ESG - Environmental, Social, and Governance
Environmental, Social, and Governance are a set of criteria used by investors to assess investments.
Environmental criteria look at the environmental impacts of an organisation.
Social criteria consider how an organisation manages relations with their staff, suppliers, clients and communities.
Governance criteria analyse the organisation’s leadership, remuneration, processes, internal audits and processes as well as shareholders rights.
“Anxiety caused by a dread of environmental perils, especially climate change, and a feeling of helplessness over the potential consequences for those living now and even more so for those of later generations”. Source: dictionary.com.
An intergovernmental body of the United Nations responsible for advancing knowledge on climate change to policy and decision makers. Their reports provide regular scientific assessments on climate change impacts and future risks.
The landmark agreement was reached at COP21 in Paris on 12 December 2015. It brought 196 nations to agree to undertake ambitious efforts to combat climate change and adapt to its consequences, while developing countries to do so.
“The Paris Agreement (…) reaffirms the goal of limiting global temperature increase to well below 2 degrees Celsius, while pursuing efforts to limit the increase to 1.5 degrees.” (Art.2).
More information can be found here: Key aspects of the Paris Agreement | UNFCCC
Refers to nations or organisations’ strategies which outcomes are aligned with the Paris agreement key goals.
NDCs - Nationally Determined Contributions
Nationally determined contributions are the key climate action commitments taken by each country to achieve the Paris Agreement. At Baringa, we have assessed the credibility and durability of several countries, commitments, including China, USA, India and EU.
NZ - Net Zero
Reaching Net Zero means the Greenhouse Gases (GHG) emissions going into the atmosphere are compensated by removals from the atmosphere by different methods – including natural carbon sinks such as oceans and photosynthesis – and technologies - Carbon Capture Utilisation and Storage.
Carbon neutrality and Climate neutrality refer to the same concept.
RCP – Representative Concentration Pathways
Representative Concentration Pathways are greenhouse gas (GHG) concentration trajectories adopted by the IPCC (Intergovernmental Panel on Climate Change). In IPCC’s 5th Assessment Report from 2014, there are 4 pathways describing different climate future scenarios, each one is based on a volume of greenhouse gases (GHG) emitted in the years to come. The pathway names are based on the level of radiative forcing - RCP2.6, RCP4.5, RCP6, and RCP8.5.
The Science Based Targets initiative was created by the United Nations Global Compact (CDP), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) to drive more ambitious climate action in the private sector. The initiative promotes best practices in emissions reductions and helps companies to set emissions reduction and net-zero targets grounded in the latest climate science. More than 2000 companies and financial institutions have joined the initiative.
A metric applied to a given entity, organisation or investment portfolio to forecast how their Green House Gas emissions align with existing temperature pathways – below 2C or 4C.
See Baringa’s definition and examples here.
TPI - Transition Pathway Initiative
A global initiative helping investors assess if the alignment of their investment portfolio with the goals of the Paris Agreement so they can influence emission reductions and transition to a carbon neutral economy.
UNFCC - United Nations framework on Climate Change
The United Nations framework on Climate Change, signed in Rio in 1992 to commit most of the world nations to avoid dangerous climate change.
TCFD – Task Force on Climate-Related Financial Disclosures
The Task Force on Climate-Related Financial Disclosures was created in 2015 by the Financial Stability Board to improve how companies and financial institutions report on climate-related financial risk to their stakeholders. Baringa has helped several leading financial services firms, including Standard Chartered and Legal & General, develop their TCFD reporting.