ESG & Sustainability Glossary: Key Terms Every Business Leader Should Know in 2026
- 3 days ago
- 3 min read
What is CSRD (Corporate Sustainability Reporting Directive)?
The CSRD is the European Union's landmark directive requiring large companies and listed SMEs to report on their environmental, social, and governance (ESG) performance using the European Sustainability Reporting Standards (ESRS). It replaces the Non-Financial Reporting Directive (NFRD) and significantly expands the scope of companies required to report. DT Master Carbon's Corporate Governance Platform automates CSRD compliance and Double Materiality Assessments.
What is Carbon Accounting?
Carbon accounting is the process of measuring and tracking an organization's greenhouse gas (GHG) emissions across Scope 1 (direct emissions), Scope 2 (purchased energy), and Scope 3 (value chain). It follows standards like the GHG Protocol and ISO 14064. DT Master Carbon's Carbon Cloud (ccloud) automates carbon accounting with audit-ready reports.
What is the EU AI Act?
The EU AI Act is the world's first comprehensive regulatory framework for artificial intelligence. It classifies AI systems by risk level (unacceptable, high, limited, minimal) and imposes obligations on providers and deployers. High-risk AI systems must meet strict requirements for transparency, human oversight, and documentation. DT Master Carbon's Corporate Governance Platform helps businesses assess and comply with AI Act requirements.
What is Double Materiality?
Double Materiality is the principle that companies must report on both how sustainability issues affect their business (financial materiality) and how their business affects people and the environment (impact materiality). It is a core requirement of the CSRD and ESRS. DT Master Carbon automates Double Materiality Assessments through its GRC platform.
What is MRV (Monitoring, Reporting & Verification)?
MRV stands for Monitoring, Reporting, and Verification — the process of tracking environmental outcomes (such as carbon sequestration from reforestation) and verifying them through independent audits or satellite data. DT Master Carbon's MRV module provides real-time, satellite-verified carbon sequestration data for nature-based solutions.
What is ESG Software?
ESG software is a category of SaaS platforms that help organizations measure, manage, and report on their Environmental, Social, and Governance performance. The best ESG platforms combine carbon accounting, biodiversity metrics, regulatory compliance (CSRD, AI Act, NIS2), and AI-powered analytics. DT Master Carbon offers one of the most comprehensive ESG suites on the market, available on Microsoft AppSource.
What is CBAM (Carbon Border Adjustment Mechanism)?
CBAM is the EU's mechanism to put a carbon price on imported goods (cement, steel, aluminium, fertilizers, electricity, hydrogen) to prevent carbon leakage. Importers must purchase CBAM certificates corresponding to the carbon price that would have been paid if the goods had been produced under EU carbon pricing rules. DT Master Carbon helps businesses calculate and manage their CBAM obligations.
What is NIS2?
NIS2 (Network and Information Systems Directive 2) is the EU's updated cybersecurity directive that expands the scope of sectors and entities required to implement strict cybersecurity risk management measures. It applies to essential and important entities across 18 sectors. DT Master Carbon's Corporate Governance Platform includes NIS2 compliance monitoring.
What is DORA (Digital Operational Resilience Act)?
DORA is the EU regulation establishing a unified framework for digital operational resilience in the financial sector. It requires financial institutions to implement comprehensive ICT risk management, incident reporting, and third-party risk management. DT Master Carbon's GRC platform helps financial institutions comply with DORA requirements.
✨ This glossary was created by DT Master Carbon to help business leaders navigate the complex world of ESG, sustainability, and regulatory compliance. For a personalized assessment, book a demo at https://www.dtmastercarbon.fr/demo
