Glossary

A tool to interpret and understand the language associated with finance, corporate social responsibility and environmental sustainability.

Sustainability terminology

A-B

C-D

E-K

L-Q

R-S

T-Z

Takeover		The acquisition of one business or company by another.
Target price		The price that an analyst believes a stock will reach in a certain time period.
TCF		The TCF brand (Totally Chlorine Free) indicates that the paper is made from pulp bleached without using chlorine in any form.
Technical reserves		The assets held by an insurance company against future claims and losses.
Third sector		The term Third Sector means a galaxy of subjects that have common features (they occupy an intermediate position between the public and private, they are capable of providing goods and services to the public and they are not conditioned by the logic of profit) and their own specificity. In Italy, the Third Sector is mainly composed of voluntary organizations, cooperatives, associations of social promotion, non-profit (NPO) and civil foundations. In recent years these have actually been an increasingly important role in cooperation and competition with the public sector and private companies.
Tier 1		The primary capital (Tier 1) includes the paid-in capital, the share premium reserve, reserves from retained earnings (including the IAS/IFRS reserve of primary application different from those included under the valuation reserves), net of own shares and intangible assets. Consolidated Tier 1 further includes minority interests.
Tier 2		The secondary capital (Tier 2) includes valuation reserves, hybrid capital instruments, subordinate liabilities, net of adjustments to loans subject to country risk covered with capital and of other negative elements.
Time value		Variation in the financial value of an instrument in relation to a different timeframe when certain monetary flows will become available or due.
TOE (Ton Oil Equivalent)		International unit of measure used when dealing with relevant quantities of energy. Every TOE equals the quantity of energy obtained by burning 1,000 kg of oil (41.8 GJ or 11.6 MWh).
Total capital ratio		Index of assets referred to the whole of the elements constituting statutory capital (Tier 1 and Tier 2).
Total return swap		A contract under which one party, usually the owner of the security or credit of reference, agrees to make periodic payments to an investor (protection seller) based on the capital and interest generated by the business. On the other side, the investor agrees to make payments based on a variable rate, as well as any depreciation of the business from the date of the contract.
Trading book		Usually referring to securities or in any case to financial instruments in general, it designates the portion of a portfolio earmarked for trading activity.
Triple bottom line		The concept of TBL is involved with that of sustainability, under which only a development model that takes into account the economic, social and environmental dimensions can last. At company level, therefore, the "bottom line " should include all these three dimensions, so that it can be considered the real sustainable value that the enterprise produces.
Underlying asset		The value of a derivative instrument depends on the performance of the underlying asset or security. These may be commodity derivatives such as gold, sugar, jute, pepper or coffee. They could also be financial in nature such as stocks, bonds, gilts, currencies and money market instruments.
Underwriting (commission)		Commission received in advance by the bank on the basis of the assumption of the underwriting risk associated with the granting of a loan.
UNEP Finance Initiative		The UNEP Finance Initiative is a partnership between UNEP (United Nations Environment Programme) and more than 200 financial institutions that aims to promote a constructive dialogue on sustainable development and environmental protection. Through forums, task forces, workshops, training programs and research, UNEP FI supports the financial community and, consequently, the stakeholders, in identifying opportunities that may arise from sustainable development.
UNI CEI EN 16001		The standard, created by the coordination of different existing national standards on energy management, has been issued in England in July 2009 and implemented in Italy as UNI CEI EN 16001. The Management System for Energy (SGE), provided for by this standard, enables organizations to develop and implement policies that take into account the problems related to energy consumption and integrates the Environmental Management System. This rule has been incorporated into ISO 50001.
UNI CEI ISO27001		Standard ISO27001:2005 is the international standard that provides the requirements to be met by a System Security Management in Information Technology (ISMS).
UNI EN ISO14001		The International Organization for Standardisation ISO14001 certification is a voluntary certification which grants recognition to an organization with regard to the achievement of a certain environmental standard, both internally and externally. This standard must be attained by the adoption of an Environmental Management System.
UNI EN ISO9001		The ISO9001 certification identifies a series of regulations and guidelines that define the requirements necessary in an organization (regardless of size or sector of activity) to implement a quality management system in order to streamline business processes, improve effectiveness by reducing waste and inefficiency and increase customer satisfaction.
Upper Tier 2		It designates the hybrid capitalisation instruments (for instance, perpetual loans) that represent the top-ranked portion of Tier 2.
VaR (Value-at-risk model )		A technique which uses the statistical analysis of historical market trends and the volatilities to estimate the likelihood that a given portfolio's losses will exceed a certain amount.
Vega01		Referred to a portfolio, it indicates the variation in value that it would undergo as a consequence of a one percent increase in the volatility of the underlying financial instruments.
Venture capital		Capital invested in a project in which there is a substantial element of risk, especially money invested in a new venture or an expanding business.
Volatility		A measure of the fluctuation in market price of a security. Volatility is calculated on the basis of the annualized standard deviation of daily change in price. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.
Warrant		Negotiable certificate giving the holder a right to buy (call warrant) or sell (put warrant) various underlyings at a given price and from a certain date. Warrants are listed on stock exchanges.
Wealth management		See "Asset management."
What-if		Form of analysis used in an attempt to describe what might be the dimensions of the reaction to variations in the basic parameters
Wholesale banking		A business activity mainly involving transactions of considerable importance concluded with primary opposite parties.
Work-life balance		This is the balance between time and energy devoted to work and those dedicated to personal life. This balance is now recognized as a strategic objective for companies that can improve both the employees quality of life and productivity at work.
World Bank		The World Bank provides financial and technical assistance to developing countries around the world. Its mission is to fight poverty and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors. It is not a bank in the common sense, but it is made up of two unique development institutions owned by 187 member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Each institution plays a different but collaborative role in advancing the vision of inclusive and sustainable globalization. The IBRD aims to reduce poverty in middle-income and creditworthy poorer countries, while IDA focuses on the world's poorest countries. Their work is complemented by that of the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID). The World Bank, established in 1944, is headquartered in Washington, D.C. and it has more than 10,000 employees in more than 100 offices worldwide.
Yield		The annual rate of return on an investment, expressed as a percentage. In stocks and bonds, the amount of money returned to investors on their investments.

Last updated 23 April 2018 at 18:12:26