In corporate terms, accountability is the acknowledgement and acceptance of responsibility by a corporation's leadership for the actions and decisions made by the company. Includes the obligation to report on and explain those actions and decisions, and be responsible for any resulting consequences.



The number and variety of living organisms on Earth, including ecosystem diversity, species diversity and genetic diversity. Biodiversity is essential to the health of the planet and the well-being of its inhabitants.


Biofuel is any fuel derived from an organic material that is not fossilized like coal or petroleum. Common sources include ethanol and bio-diesel.


Biological, non-fossil material from renewable sources that can be used to produce energy. Examples of biomass are forest and mill residues, agricultural crops and wastes, wood and wood wastes, animal wastes, livestock operation residues, aquatic plants, and municipal and industrial wastes.


Altering the genetic makeup of an organism for a human purpose like creating medicines or improving crop yields.

Boreal forest

One of the world's largest remaining intact forest ecosystems, covering approximately 58% of Canada's land mass. The Boreal region stretches from Yukon to Newfoundland and provides crucial breeding habitat for more than 30% of the world's bird population.


Carbon emissions

Emissions of the greenhouse gas carbon dioxide CO2. Greenhouse gas emissions are often expressed in terms of carbon dioxide-equivalent CO2, to enable comparison of emissions of different greenhouse gases.

Carbon neutral

The point at which your net carbon emissions are zero; it entails measuring your total emissions, reducing them where you can (e.g., by driving less or changing light bulbs to compact-fluorescent) and investing in initiatives, such as wind power, that will offset what you can't reduce.

Carbon trading

A market mechanism designed to reduce greenhouse gas (GHG) emissions through the laws of supply and demand. GHG emitters are allowed a certain amount of emissions, above which they are charged for each ton of emissions. Companies that use less than their allowance can sell to companies that emit more than their allowance. The total amount of allowable emissions are reduced over time to decrease supply and increase prices, thus increasing the incentive to reduce emissions. Also known as emissions trading or "cap-and-trade".


Generally refers to the third-party verification of a company's adherence to a certain set of management standards that are designed to lead to improved social and environmental performance or outcomes. Examples include Forest Stewardship Council (FSC) certification for wood, Marine Stewardship Council Certification for fish, certified Organic agricultural products, and ISO 14001 environmental management systems certification.

Climate change

Long-term change in average global temperature and weather patterns. In particular, the warming of the earth's atmosphere caused by human activities including the burning of fossil fuels and deforestation. Also known as global warming.

Closed-loop supply chain

Ideally, a zero-waste supply chain that completely reuses, recycles or composts all materials. However, the term can also be used to refer to corporate take-back programs, where companies that produce a good are also responsible for its disposal.

Community investing

When investor money is directed to communities that have been underserved by traditional financial services. It involves investing in community-based financial institutions, co-operatives, micro-enterprise, and community-oriented businesses.

Corporate engagement

A process of using the power as a shareholder to influence corporations on particular issues or actions. It involves institutional or individual investor efforts to engage with companies through dialogue, filing shareholder resolutions, as well as active and informed proxy voting.

Corporate governance

Originally a term referring to the organizational structures and policies applied to corporate boards and management, the term is now best understood as "corporate governing" i.e. how boards and senior management run their corporations.

Corporate social responsibility (CSR)

The obligation to ensure that the economic, social and environmental impacts of a company provide a net benefit to society. Corporate social responsibility suggests that commercial corporations have a duty of care to all stakeholders in all aspects of business operations.

CSR report

Refers to a report that discloses the environmental, social, and economic performance and impacts of a company. These reports are generally voluntary in nature. The Global Reporting Initiative is a standardized framework for sustainability reporting. Also known as sustainability reporting.



A form of corporate engagement. It is a continuous exchange between company management and investors about financial, environmental and social performance and what can be done to improve it.


Refers to the degree to which a company provides stakeholders with accurate, timely and useful information regarding the actions, policies and performance of the company, including the risks and opportunities facing the company. SRI companies are particularly concerned with the extent to which the company reports publicly on its environmental, social and governance (ESG) policies and performance.


The decision to sell all of the shares held in a company as a result of poor environmental, social or governance (ESG) performance. When a SRI firm divests, it has concluded that corporate engagement is not progressing and that the company is not going to address its ESG concerns adequately.



Materials (gases, particles, vapours, chemical compounds, etc.) that are released into the natural environment as a by-product of industrial activity.

Environmental, social and governance (ESG)

Consideration of the environmental, social, and governance aspects of corporate policies, practices and performance, as well as the financial aspects.

ESG analysis

A framework for an investment institution to identify and track how the companies it may invest in are managing environmental, social, and governance (ESG) risk and performance.

Ethical investing

See socially responsible investing.


Assessing companies for inclusion in an investment portfolio. At Ethical Funds, as well as being assessed on financial aspects, companies are assessed against baseline expectations of environmental, social, and governance (ESG) systems and performance, specific to their industry.


Eliminating companies from the investment universe because they fail to meet evaluation requirements. Ethical Funds excludes companies that fail to meet baseline environmental, social and governance (ESG) expectations for their industry. It automatically excludes companies involved primarily in tobacco, weapons or nuclear power.


Waste from discarded electronic devices (such as computers, televisions, and mobile phones). E-waste can be highly toxic, and may contain mercury, lead, and other hazardous substances.


Free, prior and informed consent (FPIC)

Free, prior and informed consent (FPIC) is used most often in reference to the development of resource extraction projects in the territory of local, indigenous communities. The FPIC standard implies that a company will ensure that the local population has been provided with all the relevant information regarding the benefits and impacts of the project, prior to any development taking place, and that they are free to grant or deny consent for the project. Projects that meet the FPIC standard enjoy greater certainty and have a stronger social license to operate.

Financial analysis

Used to assess a company's profitability, solvency, liquidity and stability using financial data from income statements, balance sheets and cash flow analysis.

Focus List

These are the companies Ethical Funds targets for shareholder action strategies, to help encourage better environmental, social and governance (ESG) performance. According to Ethical Funds' assessments, these companies either lag their peers in specific areas or are strategically positioned to help "raise the bar" for all companies in their peer group.


Genetically modified organism (GMO)

Where an agricultural or food product is created by transferring targeted genes from one species to another, with the objective of introducing new and useful traits that would be impossible to achieve through traditional breeding techniques. Concerns have been raised that these products have been introduced to the marketplace without due regard for human health, and that the long-term use of genetically modified crops will have a negative impact on biodiversity.

Global Reporting Initiative (GRI)

The only global framework for the standardized reporting of economic, social and environmental performance. The GRI guidelines are created through a multi-stakeholder, consensus-seeking process that involves an international network of business, civil society, labour and professional institutions.

Greenhouse gas

Gases that trap the sun's heat within the earth's atmosphere, creating a greenhouse effect. Greenhouse gases include ozone, methane, water vapour, nitrous oxide, carbon dioxide and chlorofluorocarbons.


Human rights

Universal rights that attach to all persons equally by virtue of their humanity, irrespective of race, nationality or membership of any particular social group. They encompass civil, political, economic, social and cultural rights and freedoms, and are based on the notion of personal human dignity and worth. Defined in the UN's Universal Declaration of Human Rights.

Human rights policy

A corporate policy that defines the expectations of all employees and contractors working on behalf of the company with regard to respecting and supporting human rights in its sphere of influence.


Impact investing

When investor money is directed to businesses with an intentional social or environmental goal. It includes investing in community-oriented businesses and clean technology companies.

Independent directors

Refers to members of the board of directors of a company who are not linked to the company through financial or familial relationships. Independent directors are necessary to ensure that decisions made by the board are in the best interests of shareholders.


Life-cycle analysis

This process helps to identify the total environmental impact of a product by examining the cumulative impacts at all stages of a product's life cycle, including raw material extraction, manufacturing, transportation, use, and final disposal.



In the sustainability context, information is material if it provides stakeholders with knowledge about the company's environmental, social, and financial performance that enables them to make informed judgments and decisions about the company.

Mission-based investing

The incorporation of an organization's mission into its investment decision-making process. Most often used in reference to non-governmental organizations (NGOs), foundations, endowments and others working for progressive social change, mission-based investing means ensuring that your investments are aligned with the overall goals of the organization itself and are helping, not hindering, the achievement of those goals.

Multi-stakeholder collaboration

Groups or collaborations of individuals brought together to share their knowledge, experience and perspectives in relation to a specific issue or topic. Multi-stakeholder groups consist of a diverse range of stakeholders, often with competing interests in relation to the issue being discussed, and usually include representatives from some or all of the following groups: industry, civil society, non-governmental organizations (NGOs), government, academia and local communities.


Negative screening

See exclusionary screens.


Companies that fail to meet certain standards.

Non-governmental organizations (NGO)

Usually social, cultural, legal or environmental advocacy groups with goals that are non-commercial. They are civic organizations with legal status, and are independent of the government.


Positive screening

See inclusionary screens.

Precautionary principle

A response to uncertainty in the face of risks to health or the environment. In general, it involves acting to avoid serious or irreversible potential harm, despite lack of scientific certainty as to the likelihood, magnitude or causation of that harm. Precaution is now an established principle of environmental governance, prominent in law, policy and management instruments at international, regional and domestic levels, across such diverse areas as pollution, toxic chemicals, food, fisheries management, species introductions and wildlife trade.

Proxy voting

Shareholders have voting rights at the companies where they hold shares, which allow them to vote on matters of corporate policy-making as well as who will compose the members of the board of directors. Proxy voting is the exercise of these voting rights.

Proxy voting guidelines

A set of overall guidelines that dictates the proxy voting actions taken by an investment firm on behalf it its investors.

Proxy engagement

Participation in consultations and dialogue with governments, regulators and standards-setters to create change across whole sectors of industry.In the SRI context, policy engagement focuses on the adoption of rules, regulations and standards that encourage companies to improve their environmental, social, and governance (ESG) performance, or support investment institutions in conducting ESG evaluations and corporate engagement.


Renewable energy

The use of energy from a source that does not result in the permanent depletion of the earth's resources, e.g., wind power, solar power, geothermal, etc.

Riverine tailings

The practice of dumping mine waste into rivers and lakes.



Screening companies into or out of a portfolio was the very first development in SRI and is still a common feature of socially responsible investment products. Screens can be exclusionary, inclusionary, qualitative or solutions-oriented. Today, most sophisticated SRI firms use screening as just part of their overall investment strategy, to complement company evaluations, corporate engagement, proxy voting and policy work.

Shareholder proposals

See shareholder resolutions.

Shareholder resolutions

One of the tools of corporate engagement. It is a long-standing legal right of shareholders to formulate proposals for a change in corporate policies and actions, to circulate them to other shareholders, and to vote on them at the company's Annual General Meeting (AGM). Where dialogue with a company is not progressing, SRI firms may seek support from other investors by filing a shareholder resolution on an environmental, social or governance issue.

Social license to operate

The social license to operate is outside of the government or legally-granted right to operate a business. A company can only gain a social license to operate through the broad acceptance of its activities by society or the local community. Without this approval, a business may not be able to carry on its activities without incurring serious delays and costs.

Socially responsible investing (SRI)

Socially responsible investing (SRI) refers to the integration of environmental, social and governance (ESG) factors into the investment decision-making process. At Ethical Funds it encompasses evaluation of companies for investment based on ESG factors as well as financial factors; corporate engagement based on dialogue with companies, shareholder resolutions; active and informed proxy voting; and policy engagement to improve ESG standards across industry sectors.

Solutions-oriented screening

When SRI firms use certain industry sector screens that promote positive corporate sustainability measures to select investments for their portfolios, i.e. "best environmental performers."


The broadest definition of stakeholder brings in anyone who, directly or indirectly, affects or is affected by a company's operations and who therefore has an interest or "stake" in the company's future. Can include a range of interests, such as customers, shareholders, management, employees, suppliers, local communities and pressure groups.

Stakeholder engagement

The actions taken by a company to substantively involve their internal and external stakeholders in the discussion and formulation of corporate actions that affect the community or stakeholder group. The goal of stakeholder engagement is to make an effort to align mutual interests, reduce risks, and strengthen the social license to operate.


Responsible caretaking; based on the premise that we do not own resources but only manage them, and are responsible to future generations for their condition. It involves making decisions regarding the care of our environment with the goal of passing healthy ecosystems on to future generations.

Supplier code of conduct

Refers to expectations that a company places on its suppliers in relation to the suppliers' environmental and social performance. Most relevant for those companies sourcing materials or services from developing nations, such as apparel and electronics industry companies. Supplier codes of conduct usually include the recognition and respect of human and labour rights as well as the mitigation of environmental impacts.

Sustainable development

The most commonly cited definition of sustainable development comes from the UN report, Our Common Future: "[meeting] the needs of the present without compromising the ability of future generations to meet their own needs." Sustainable development creates economic growth, which protects the environment, relieves poverty, and does not destroy natural capital in the short term at the expense of long term development.


Based on the definition of sustainable development, sustainability is most often used in the SRI industry to refer to how well a company ensures its long term viability based on its environmental, social and governance (ESG) performance.



Based on the definition of sustainable development, sustainability is most often used in the SRI industry to refer to how well a company ensures its long term viability based on its environmental, social and governance (ESG) performance.


Venture capital (sustainable)

A form of private equity capital aimed at supporting new, high-growth potential companies that would otherwise be unable to raise the money through public markets. Venture capital investments are usually high risk, high return investment plays. Venture capital has played a large role in the development of sustainable technologies, e.g. wind, solar, geothermal, etc., and has made possible the current growth of sustainable technology companies that are now able to trade on the open market.