Definitions

This wiki page is used to provide a definition of some of the terms and concepts you might come across on the company pages.

Emissions

GHG emissions

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.

Scope 1

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.

Scope 2

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.

Scope 3

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.

Megatons

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.

Climate Agreements

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.

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.

In 2015, the Hague District Court ruled that GHG emissions in the Netherlands must be reduced by 25% (compared to 1990 levels) by the end of 2020. They achieved this goal.

Katowice Agreement

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.

Katowice Commitment

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.

Company structure

Subsidiaries

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.

Dividends

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.

Royal Status

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.