Insights
Clear definitions of the sustainability, climate, and ESG terms that matter most — from CBAM and CSRD to SBTi and PCAF. Written by Semtrio's advisory team.
Net zero refers to a state in which an organization's greenhouse gas emissions are reduced as far as possible along a science-consistent 1.5°C pathway, with any remaining residual emissions balanced by an equivalent volume of permanent, verified carbon removal — such that the organization makes no net addition of greenhouse gases to the atmosphere.
PCAF (Partnership for Carbon Accounting Financials) is a global industry-led initiative that provides a standardized methodology for financial institutions to measure and disclose the greenhouse gas emissions associated with their loans and investments — enabling banks, asset managers, and insurers to quantify their financed emissions as Scope 3 Category 15 and set credible decarbonization targets.
Physical risk is the financial risk to an organisation from the physical effects of climate change — divided between acute risks arising from extreme weather events and chronic risks arising from long-term shifts in climate patterns.
The Science Based Targets initiative (SBTi) is an independent body that validates corporate greenhouse gas reduction targets as consistent with the level of decarbonization required to limit global warming to 1.5°C — providing criteria, tools, and public validation for near-term emissions reduction targets and long-term net zero commitments.
If you're working through a regulatory framework or sustainability challenge and need clarity on a specific term or concept — our team is here to help directly.
