This wiki page is used to provide a definition of some of the terms and concepts you might come across on the company pages.
CO2 offsetting or compensation happens when a company removes the CO2 it emits from the air. Also compensation in the future is considered CO2 offsetting. Companies often buy credits from another company or initiative to compensate for them, by, for example, planting trees or protecting forests somewhere in the world. Taking CO2 out of the air is important in order to contribute to minimizing global warming. However, according to many, (Greenpeace, WWF, Milieudefensie, Center for International Forestry Research, researchers of universities) there are problems with companies offsetting their CO2.
Regarding the planting of trees, it takes a lot of time for a new tree to remove the CO2 that is now emitted, from the air. Therefore, it does not reduce CO2 emissions now, while that is necessary to minimize the risks of climate change. Regarding the protection of forests, it is not always clear whether the forest would have been destroyed in the first place. Furthermore, companies benefit from sketching a scenerio with the most deforestation, because this means that by protecting the forest, they prevent the most CO2 from going in the air. Therefore, there are examples of organisation overestimating the amount of CO2 prevented from going in the air. The CO2 offsetting projects often take place in countries around the equator or in the Global South. The projects can result into many tensions, since the lands are sometimes needed for agriculture.
There are certifications that claim to guarantee that the projects really achieve the promised CO2 compensation, like Verified Carbon Standard (VCS). However, this does not prevent companies to present themselves as sustainable because of their offsetting activities. They can continue polluting and consumers continue doing polluting activities, thinking that climate change is being dealt with.
A dividend is essentially money paid out on the ownership of stocks. In other words, it is the "distribution of corporate profits to eligible shareholders". Generally, the higher a company's profit, the higher the payed out dividend. Usually, dividend payments and its amount are determined by a company's board of directors. They are both a reward and an incentive for investors to put money into a venture.
Dutch Climate Agreement
The Dutch Climate Agreement is a Nationally determined contribution, also known as a NDC. In this document, countries state how they intend to reduce their GHG emissions in order to match the goals set by the Paris Agreement. The Climate Act was released on May 28th 2019.
The Dutch government strives to reduce the Netherlands' GHG emissions by 49%, compared to 1990 levels, and a 95% reduction by 2050. Accordingly, the "agreement is based on the principle that reducing carbon emissions must be feasible and affordable for everyone". Hence the government seeks out a cost-efficient transition and provides large subsidies to companies to facilitate said transition.
Greenhouse gas (GHG) emissions are all the different gasses that absorb heat (infrared radiation) emitted from Earth, and consequently reflect it back onto Earth’s surface hence contributing to the greenhouse effect, more commonly known as global warming. This includes carbon dioxide (CO2), methane (CH4), and water vapor, as well as nitrous oxides and surface-level ozone. As a result of certain human activities such as the emission of fossil fuels, the greenhouse effect has become stronger over time. This is because there is now more carbon dioxide in the Earth’s atmosphere. For more in-depth reading, refer to the following source.
Increased CO2 is most frequently attributed as being the main cause of worsened human-induced global warming. However, it is vital to be aware that there are other, non-CO2, substances that are equally as polluting. In the aviation industry for instance, persistent contrails, aviation induced cirrus, and nitrogen oxides (NOx) contribute more significantly to global heating than ‘just’ CO2 emissions. NOx for example contributes to ozone formation, causing smog in and near cities and other areas of the country.
In 2018, the signed Parties came together to discuss the further details of the Paris Agreement. Ultimately, the Katowice climate agreement is a package that
sets out the essential procedures and mechanisms that will make the Paris Agreement operation.
This commitment is set up by multiple global banks. In an open letter to heads of government and the international community at COP24, leadings banks argued they had teamed up in a "pledge to align lending portfolios with global climate goals". They pledged to commit themselves to re-finance their total worth of 2.4 trillion euros toward the fastening the transition toward a climate-resilient world.
When referring to a company's or country's total emission, we often talk about megatons (Mton). One megaton is contained of a million tonnes.
One tonne of GHG is equal to:
- Heating a home for 4 months or;
- Driving 4500 KM or;
- Raising a cow for 6 months or;
- Extracting 15 barrels of oil.
In 2020, the Netherlands emitted a total of 164.5Mton.
NOW stands for 'Noodmaatregel Overbrugging Werkgelegenheid', translated as Emergency Measure Bridging Employment. This is a measure that accomodates employers who are dealing with a loss of revenue due to the corona crisis. With the NOW allowance, the employers can pay their employees, keep them in service and jobs are preserved.
Paris Climate Agreement
The Paris Agreement is the first-ever universal, legally binding global climate change commitment. It was obviously adopted on 12 December 2015, and officially entered into force on 4 November 2016. With it, the undersigned Parties strive to keep the increase in the global average temperatures well-below 2°C, preferably to 1.5°C, compared to pre-industrial levels. In order to achieve this, countries aim to "reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate neutral world by mid-century".
Despite the fact the Paris Agreement mainly targets States as entities for change, civil society, the private sector, financial institutions, cities and other subnational authorities are invited and welcome to contribute. The United Nations hopes that by 2030, zero-carbon solutions could be competitive in sectors compounding 70% of global emissions.
Companies report different results to present their financial situation. Profit is one of them and shows the difference between the amount earned and the amount spent in buying, operating, or producing something. The profit results can be before taxation or after. When the profit is after taxation it is often named net profit. Another concept used by some companies is net income. Companies sometimes report the profit of the mother company and of the group of companies (the subsidiaries). On this Wikimedia, we want to report the net group profit.
The Royal Status or 'Predicaat Koninklijk' in Dutch is a distinction that can be awarded to associations, foundations, institutions or large companies. This distinction is awarded by the king or queen and symbolizes the respect, appreciation and trust towards the recipient. The purpose of assigning predicates is, among other things, to contribute to the positioning of Dutch companies and organizations in the Netherlands and abroad. The history of the Royal Status goes back to 1806, when Lodewijk Napoleon introduced it. In 1815, the first royal distinctions were awarded. The most important obligation following the designation is that the recipient will refrain from anything that will damage their reputation.
According to the GHG emissions protocol, scope 1 emissions entail all the GHG emissions that occur from sources that are:
owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment.
However, direct CO2 emissions that occur from the combustion of biomass are not included in scope 1, but have to be reported separately. Additional GHG emissions that are not covered are Chlorofluorocarbon (CFCs) and NOx, despite these gasses having large ozone-depleting effects.
For financial institutions, scope 1 includes the emissions on loans and investments.
The GHG emission protocol states that scope 2 accounts for the:
generation of purchased electricity consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company. Scope 2 emissions physically occur at the facility where electricity is generated.
According to the World Resources Institute, approximately 40% of the world’s GHG emissions come from energy generation, and about half of that is consumed by industrial or commercial users.
Some ways to cut scope 2 emissions include switching to a low-carbon energy supplier - one that invests in building new renewable power infrastructure.
The GHG emissions protocol classifies scope 3 emissions is an optional reporting category. They define scope 3 accordingly:
Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. some examples of scope 3 activities are extraction and production of purchased materials; transportations of purchased fuels; ad use of sold products and services.
For scope 3 emissions, a distinction can be made between upstream activities, and downstream activities. The first referring to "indirect GHG emissions related to purchased or acquired goods and services" and the latter to "indirect GHG emissions related to sold goods and services". Additionally, due to its broadly encapsulating nature, scope 3 is categorized into 15 distinct categories.
In 2011, the GHG protocol released a Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard to aid companies in preparing and reporting their GHG emissions inventory including scope 3 emissions.
A subsidiary is most commonly known as a 'daughter company'. This entails that these type of companies are frequently owned by another company, the 'parent company'. Most companies these days own multiple subsidiaries. Despite technically being part of the same company, and in in most cases bearing the same logo, subsidiaries are separate, distinct legal entities with regard to taxes, regulations, and liabilities.
For a subsidiary to belong to a specific parent company, the latter needs to hold at least a majority of the its shares.
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