Sustainable terms you should probably know.

A

Air Quality Index (AQI)

An index for reporting daily air quality. It determines how clean or polluted air is and what associated health effects might be of concern. The AQI focuses on health effects you may experience within a few hours or days after breathing polluted air.

Air Quality Standards (AQS)

The level of pollutants prescribed by regulations that are not to be exceeded during a given time in a defined area.

B

B Corporation (Bcorp)

A certified B Corporation is a business structure that balances purpose and profit. B Corporations are legally required to consider the impact of their decisions on the environment, workers, customers, suppliers, and communities. Famous B-Corps include: TOMS, Ben and Jerry’s, Gousto, and learning platform Coursera.

In order to achieve certification, a company must:

• Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing the risk review. Multinational corporations must also meet baseline requirement standards.
• Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders, and achieve benefit corporation status if available in their jurisdiction.
• Exhibit transparency by allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website.

Benchmarking

The practice of measuring how much of a utility a building consumes (energy, water, etc.) or produces (waste, etc.) and comparing that against other, similar buildings.

BIM (Building Information Modeling)

The information created and accessed during the development of a building—in essence, a digital blueprint that captures every element of the building process. BIM allows for a more integrated and potentially cost and environmentally effective approach to construction.

Biodegradable

The ability of a material to break down through interaction with bacteria and fungi. It’s important to recognize that not all materials break down at the same speed or in the same way.

Biodiversity

The variety of life in the world or in a particular habitat or ecosystem.

Biomimicry

The practice of emulating models or systems that occur in nature to solve complex human problems.

Brownfield construction

Any previously developed land that is not currently in use. There may be concerns around whether the land has been left without further development due to pollution or other environmental concerns. Redeveloping an old industrial site to a new logistics warehouse or new homes offers positive social and economic benefits. Certain elements of remediation can drastically increase costs and limit the window of opportunity to redevelop.

Biophilic design

Biophilic design is a concept used within the building and real estate industry to increase occupant connectivity to the natural environment through the use of direct nature, indirect nature, and space and place conditions. Direct nature refers to: light, air, water, plants, animals, weather, natural landscapes and fire. Indirect nature refers to: images of nature (paintings, photos, videos), nature materials (such as wood or stone), natural colours (earth tones), naturalistic shapes, simulation of natural light and air, informatic richness, natural geometries (for example honeycomb or water ripples) and biomimicry.

Used at both the building and city-scale, it is argued that this idea has health, environmental, and economic benefits for building occupants and urban environments, with few drawbacks.

C

Carbon footprint

A carbon footprint corresponds to the whole amount of greenhouse gases (GHG) produced to, directly and indirectly, support a person’s lifestyle and activities. Carbon footprints are usually measured in equivalent tons of CO2, during the period of a year, and they can be associated with an individual, an organization, an asset, a portfolio, a product or an event, among others.

Carbon intensity

An entity’s carbon emissions, typically divided by its revenues, though the denominator can also be square meter, per employee, unit of production, etc.

Carbon neutral

Achieving parity between carbon emissions and removals. Easier to achieve than ‘net zero’ as it allows others to emit less CO2 on your behalf (known as an offset).

Carbon offsetting

 A carbon offset broadly refers to a reduction in GHG emissions – or an increase in carbon storage (e.g., through land restoration or the planting of trees) – that is used to compensate for emissions that occur elsewhere.

A carbon offset is defined as “any activity that compensates for the emission of carbon dioxide (CO2) or other greenhouse gases (measured in carbon dioxide equivalents, CO2e) by providing for an emission reduction elsewhere” (1). In other words, carbon offsetting is a mechanism through which an individual or an organization can compensate for their CO2 emission through the support of certified emission reduction projects that absorb or reduce CO2 emissions. This action is realized through the purchase of carbon credits, where 1 carbon credit corresponds to 1 tonne of CO2 absorbed or reduced by the projects.

Carbon pricing

Putting a price on emissions of greenhouse gases.

Carbon removal

Nature-based or industrial solutions that capture and store carbon. Some examples include reforestation and soil management.

CDP (Carbon Disclosure Project)

CDP, originally known as the Carbon Disclosure Project, is a global non-profit that runs the world’s environmental disclosure system for investors, companies, cities and governments to assess their impact and take urgent action to build a truly sustainable economy. Over the past 20 years we have created a system that has resulted in unparalleled engagement on environmental issues worldwide.

Circular economy

Finding ways to reduce waste and pollution and keeping products and materials in use rather than throwing them away.

For example: Footwear is one of the biggest users of virgin rubber. Through a strategic partnership, once tire producer Omni United tires have reached the end of their product life, they are shipped to a recycling facility and turned into crumb rubber. This crumb rubber is processed into sheet rubber for the outsoles of Timberland shoes.

Clean tech

Any technology that reduces or eliminates a pollutant, whether climate related or not.

Clean waste

Nonhazardous materials left over from construction and demolition. Clean waste excludes lead and asbestos.

Climate change

Long term changes in average global conditions, such as temperature and rainfall, due to the accumulation of greenhouse gases in the Earth’s atmosphere.

Climate justice

A term and a movement that acknowledges climate change can have differing economic, social, public health, and care impacts on underprivileged individuals and communities.

Climate transition

The transition to a warmer, low carbon world.

Community investment

Cash donations, project costs and donations in kind (such as the cost of volunteering) to charitable organisations in a company’s local areas, or potentially in areas where communities are impacted by production or use of a company’s products.

Conscious consumption

A social movement based on an increasing awareness of the impact individual and group purchasing decisions can have on the environment, consumers’ health and life for all. Alongside price and quality, environmental considerations are playing an increasing part in a purchase decision.

COP (Conference of Parties)

The decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC) which meets annually to encourage intergovernmental policy on climate change.

CO2e (or CO2-eq)

The most dominant greenhouse gas that comes from burning fossil fuels, industrial production, and land use is CO2. However, CO2 is not the only gas driving climate change.

There are a number of other gases that significantly contribute to global warming, all of which together are quantified in one single metric called CO2e.

CO2e allows “bundles” of greenhouse gases to be expressed as a single number, it also allows different bundles of greenhouse gases to be easily compared in terms of their global warming potential.

Corporate governance

The systems and processes by which companies are controlled.

Corporate social responsibility

Corporate social responsibility (sometimes referred to as corporate responsibility or corporate citizenship) is a broad concept that can take many forms depending on the company and industry. In general, it is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public.

D

Deforestation

The process of harvesting forests for natural resources or to clear land for agriculture or construction. Deforestation that occurs faster than forests are able to recover causes environmental damage such as loss of biodiversity and climate change.

Disclosure

The process in which a company submits requested information relating to the impact their business activities have on environmental areas such as climate change, deforestation and water security. Capital markets and purchasing organizations use data submitted through the disclosure process to make informed decisions.

Divestment

The act of dissociating or selling assets and securities due to behavior not aligned with ESG values, or as a way to display strong commitment to ESG and responsible investing practices.

E

Electrification

Switching from fossil fuels burned at a building to using electricity to meet a building’s energy needs. Transition to greater use of electricity in commercial and multifamily buildings is important to take advantage of increasingly decarbonized electricity.

Embodied carbon

The total GHG emissions that are generated to produce a building. These emissions include those created by manufacturing, extraction processes, transportation and the assembly of every product and individual element of an asset.

Energy recovery

Process linked to aerobic and anaerobic digestion. The creation of energy through the conversion of waste materials into electricity, fuel and a heat source. Energy recovery would reduce the volume of waste heading to landfill and reduce emissions as it negates the need to burn fossil fuels.

Energy resilience

Having a regular, reliable supply of energy and measures in place to offset any negative issues occurring from a power cut. As the access to energy potentially becomes less stable, and managed by a broader range of corporates, the resilience of countries’ energy supply will become increasingly critical to governments (think food security—making sure we have access to enough food in an ongoing manner).

Energy storage

Capturing and storing energy to use later. The purpose being to save energy to use at a time of higher level of demand. Battery technology continues to develop, alongside strides being made in the use of hydrogen, to store energy safely and securely.

Environmental justice

The fair treatment and meaningful involvement of all people, regardless of gender, color, background or income, with respect to the understanding, development, implantation of environmental laws, regulations and policies.

ESG

Umbrella term for environmental, social and governance issues.

ESG integration

Explicitly including environmental, social, and governance factors during the investment process, specifically with the goal of long-term performance growth and risk mitigation.

Ethical investments

Using moral principles as the initial filter for the selection of investible securities.

Environmental factors

The E in ESG. It covers issues relating to the quality and function of the natural environment and natural systems. These include: biodiversity loss; greenhouse gas (GHG) emissions, climate change, renewable energy, energy efficiency, air, water or resource depletion or pollution, waste management, stratospheric ozone depletion, changes in land use, ocean acidification, and changes to the nitrogen and phosphorus cycles.

Environmental Management System (EMS)

An Environmental Management System (EMS) is a framework that helps an organization achieve its environmental goals through consistent review, evaluation, and improvement of its environmental performance. The assumption is that this consistent review and evaluation will identify opportunities for improving and implementing the environmental performance of the organization. The EMS itself does not dictate a level of environmental performance that must be achieved; each organization’s EMS is tailored to its own individual objectives and targets. One of the best known examples of an EMS accreditation scheme is ISO 14001, a set of international standards and guidance documents for environmental management developed by the International Organization for Standardization (ISO).

F

Fair trade

A recognized way to ensure producers, sellers, and operators in lower paid parts of the world receive a ‘fair’ deal for the products they produce. Different fair-trade associations exist, and different parameters are in play.

Fast fashion

Media name for the trend to produce, sell, buy and dispose of items of clothing more quickly. Another term applied is often disposable fashion where an item of clothing can be bought for less than the cost of a coffee and muffin. The cost of an item means the cost of repair is often higher than the item’s price itself.

Fossil fuels

A fuel from natural resources to be found on our planet. Oil, gas and coal have been formed from living organisms over the past millions of years. There is a finite supply, and the fuel sources are non-renewable. As well as being non-renewable, the use of these fuel sources releases carbon dioxide into the environment, resulting in climate change and the heating of our planet.

G

Global Warming Potential (GWP)

From a climate science perspective, GWP was developed to enable a comparison of warming impacts of different greenhouse gases.

Green bonds

Fixed income instrument linked to projects focusing on driving a lower carbon environment, socially sustainable future, or just generally socially positive outcomes.

Greenfield construction

Greenfield sites are undeveloped, agricultural areas of land that are now being considered for development. The development of greenfield sites has come under pressure from environmental concerns focused on minimizing loss of further habitat, countryside, and wildlife. There are also concerns around increased pollution connected to growth in traffic—the phrase urban sprawl is often used when discussing the requirement for green space in an area.

Green cleaning

The use of cleaning methods and products with environmentally friendly ingredients designed to preserve human health and environmental quality.

Green finance

Investments used to finance activities with environmental benefits.

Greenhouse Gases (GHG)

Gases including carbon dioxide and methane that trap some of the heat the earth radiates back out into space, making the earth being warmer than it otherwise would be.

GHG emissions (Scope 1, Scope 2, Scope 3)

A greenhouse gas (GHG) is a gas that contributes to the greenhouse effect, and thus has a direct effect on climate change, by absorbing infrared radiation. GHG includes carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), chlorofluorocarbons (CFCs), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). GHG emissions are measured in carbon dioxide equivalents (CO2e).

When estimating its GHG emissions, an organization should differentiate between Scope 1, Scope 2, and Scope 3.

• Scope 1 emissions are direct emissions from owned or controlled sources (e.g. natural gas used to heat buildings, fuel for the organization’s fleet).

• Scope 2 emissions are indirect emissions from the generation of purchased energy. Depending on the country or state’s electric mix (share of nuclear, renewable, coal, oil, gas consumed to produce the electricity consumed), a same amount of electricity consumed can lead to different amount of Scope 2 GHG emissions.

• Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

Green leases

An agreement made between tenant and landlord to increase transparency, consolidate services, and grow innovative practices together. The aim being by the sharing of knowledge and an increased focus we will see lower levels of emissions.

Green power

A subset of renewable energy composed of grid-based electricity produced from renewable energy sources

GRESB

Global Real Estate Sustainable Benchmark provides validated ESG performance data and peer benchmarks for investors and managers to improve business intelligence, industry engagement and decision-making.

Global Reporting Initiative (GRI)

The Global Reporting Initiative (GRI) is an independent, international, and non-governmental organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts. They provide standards for sustainability reporting called the GRI Standards.

Greenwashing

Falsely claiming or exaggerating sustainable characteristics or environmental benefits provided by a fund, business practice or company

Governance factors (G)

The G in ESG. Issues relating to the governance of companies and other investee entities. In the listed equity context these include: board structure, size, diversity, skills and independence, executive pay, shareholder rights, stakeholder interaction, disclosure of information, business ethics, bribery and corruption, internal controls and risk management, and, in general, issues dealing with the relationship between a company’s management, its board, its shareholders and its other stakeholders. This category may also include matters of business strategy, encompassing both the implications of business strategy for environmental and social issues, and how the strategy is to be implemented. In the unlisted asset classes governance issues also include matters of fund governance, such as the powers of Advisory Committees, valuation issues, fee structures, etc.

H

Hazard

The potential occurrence of a natural or human-induced physical event or trend that may cause loss of life, injury, or other health impacts, as well as damage and loss to property, infrastructure, livelihoods, service provision, ecosystems and environmental resources.

I

Impact investing

In essence an impact investment or impact fund needs to meet three key criteria. Firstly, showing intentionality to have a positive impact. Secondly, identifying additionality to ensure the investment is adding a positive impact that wasn’t there in the first place. Thirdly, measuring the impact both quantitatively and/or qualitatively.

Integrated reporting

A process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation. Integrated reporting brings together material information about an organization’s strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates. It provides a clear and concise representation of how the organization demonstrates stewardship and how it creates value, now and in the future.

ISO 14001

Internationally recognized and accepted approach to implementing an effective environmental management system. Balancing corporate commercial goals with environmental responsibilities.

ISO 14040

Series of standards (Life Cycle Assessment – LCA), addressing quantitative assessment methods for the assessment of a product or service in its entire life cycle stages. ISO 14040 is an overarching standard encompassing all four phases of LCA. The four main phases being: goal and scope definition, inventory analysis, impact assessment, and interpretation.

ISO 14044

Specifies requirements and provides guidelines for LCA, including definition of the goal and scope of the Life Cycle Assessment, the life cycle inventory analysis (LCI) phase, the life cycle impact assessment (LCIA) phase and the life cycle interpretation phase, reporting and critical review of the LCA, limitations of the LCA, relationship between the LCA phases, and conditions for use of value choices and optional elements.

ISO 50001

Internationally recognized and accepted approach to establishing an energy policy and objectives, and the appropriate processes and procedures to deliver against those objectives. This is mostly an Environmental Energy Management System (EnMS), very similar to an EMS but is more of a flexible performance standard.

J

Just transition

Moving toward a greener economy that is fair and inclusive to everyone, creating decent work opportunities and leaving no part of society behind.

K

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L

LEED (Leadership in Energy and Environmental Design)

Widely used green building rating system. Advantages are that it offers a solution for most asset types and different projects—development from scratch, fit-outs, refurbishments. The aim of LEED is to provide guidance for project leads to create an efficient, healthy, and cost-saving, environmentally enhanced building.

LCA (Life Cycle Assessment)

The systematic analysis of the potential environmental impacts of products or services during their entire life cycle.

M

Materiality

Materiality, in the context of environmental, social, and corporate governance (ESG), refers to the effectiveness and financial significance of a specific measure as part of a company's overall ESG analysis. Material factors are financial elements deemed fundamental to the long-term success of a company's ESG strategy. A materiality concept in ESG research is a level of importance that an organization attributes to specific environmental or social factors.

• Double materiality: refers to the consideration of both sustainability issues that affect companies’ activities and the effect of companies’ activities on society and the environment.

• Dynamic materiality: refers to the recognition that the issues considered to be material may evolve over time.

• Embedded materiality: refers to varying scope of material issues depending on the perspective selected, e.g. from the narrow scope of issues reflected in financial statements, to the broader scope of issues affecting enterprise value, or to those having positive or negative impacts on the environment and society.

N

Nature-based solutions

Solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource efficient and systemic interventions. Some examples of nature-based solutions (NBS) are green roofs, rain gardens, or constructed wetlands which can minimize damaging runoff by absorbing stormwater, reducing flood risks and safeguarding freshwater ecosystems.

Nature-positive

Behaviour and actions which overall increase biodiversity and the number of species in nature, as opposed to causing them to decline.

Natural capital

The value of the ‘free’ resources available to us—clean air, water, food, and recreational activities. Natural capital accounting gives a financial value to these elements—current calculations indicate the planet offers us $72 trillion of value each year. Without these, the planet and economy would simply fail.

Net energy

Energy available to drive economic growth once the energy that is needed to produce the ‘new’ energy is taken into account. A number greater than one means that there is a net gain in the energy produced. Examples are petroleum 4.5, natural gas 4.9 and solar energy 5.8.

Net Zero target

Net zero is achieved by reducing the level of GHG emissions a company or country creates to as close to zero as possible, with any residual amounts emitted matched by removal. At Avison Young, we have made the commitment to reduce the emissions of all our workplaces globally to net zero by 2040, with a 50% reduction by 2030.

Negative emissions technologies

Technologies that enable carbon to be removed from the atmosphere e.g. machines that capture carbon dioxide from the air and sequester it.

O

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P

Paris Agreement

Breakthrough international treaty on climate change adopted at COP21, Paris, 2015. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.

Q

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R

Rainwater harvesting

The capture, diversion, and storage of rain for future beneficial use. The harvested rainwater can be used for irrigation.

Rainwater management

Capturing and retaining a specified volume of rainfall to mimic natural hydrologic function. Examples of rainwater management include evapotranspiration, infiltration, and capture and reuse.

Renewable energy

Energy is attained from perpetual, unending sources, such as a collection of energy with solar panels or wind turbines.

Resiliency

Around the world, the frequency, intensity and impacts of natural disasters are increasing. These events can significantly affect the social, economic and environmental functionality of communities and individual buildings. Resiliency can be defined as the ability of commercial buildings and the businesses they house to adequately prepare for such events and quickly return to full operations.

S

Science-Based Targets Initiative (SBTi)

The collaboration between CDP, the UNGC, World Resources Institute, and the World Wide Fund for Nature that requests for companies to create and publish targets to reduce greenhouse gas emissions in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures.

Single use plastics

Anything designed or likely to be used once before disposal or recycling—plastic drink bottles, plastic straws, plastic bags, much of the packaging that wraps our fruit, vegetables, food and drink. Many of the items are bought to be consumed on the go and the onus is then on the purchaser to seek out an appropriate recycling receptacle. Some countries like Germany offer a deposit scheme which encourages return to store and many businesses are exploring bio-degradable packaging or ‘naked’ products to be sold in stores and taken home in the consumers’ own glass jars, bottles. The sight of coconuts wrapped in plastic or a single apple in a hard plastic shell being promoted as a grab-n-go healthy snack are somewhat incongruous with the impact the packaging has on the health of the planet.

Solar power

Energy using the power of our sun. It is renewable, making it a clean, emissions free way to produce much needed power and energy. Solar cells are most commonly used to produce solar energy and can be found in solar farms and on business and household roofs.

Smart buildings

A smart building is one that uses technology to enable efficient and economical use of resources, while creating a safe and comfortable environment for occupants. Smart buildings may use a wide range of existing technologies and are designed or retrofitted in a way that allows for the integration of future technological developments. Internet of Things (IoT) sensors, building management systems, artificial intelligence (AI), and augmented reality are amongst some of the mechanisms and robotics that may be used in a smart building to control and optimize its performance.

Smart cities

Another expression of the ESG impact on infrastructure is the so-called “Smart cities” initiative, designed to allow ESG guidelines to span across the life of a city, in the respective assets, community services and resources, including better (and greener!) transportation, improved communication networks, optimization of energy consumption, water supply, crime detection and waste.

Social factors (S)

The S in ESG. Issues relating to the rights, well-being and interests of people and communities. These include: human rights, labour standards in the supply chain, child, slave and bonded labour, workplace health and safety, freedom of association and freedom of expression, human capital management and employee relations; diversity and inclusion; relations with local communities, activities in conflict zones, health and access to medicine, and consumer protection.

Social impact

Social impact can be defined as the effect on people and communities that happens as a result of an action or inaction, an activity, project, program or policy. It can be positive, negative, planned and unplanned.

Social impact is calculated by the number of people whose lives you improve and how much you improve them, over the long term.

Social innovation

A practice where innovators aim to meet social needs in better ways than existing solutions. These innovations are often highly ingenious in helping to solve social injustice and at the same time, achieve many of the 17 SDGs. For example: government owned ‘food-forests’ in Atlanta, a concrete alternative created by the University of the Philippines, and Rent the Runway – a fashion service tackling extreme consumerism.

Social Return on Investment (SROI)

An organizational method of accounting for value creation, primarily social or environmental value. SROI enables organizations to measure how much change is being created by tracking relevant social, environmental, and economic outcomes.

Social value

Social value measures the positive value businesses create, working in collaboration with the end users, for the economy, communities, and society.

Sustainability

All activity that meets the needs of the present generation without compromising the ability of future generations to meet their needs.

Sustainable Development Goals (SDGs)

17 global goals agreed by members of the UN, designed to be a “blueprint to achieve a better and more sustainable future for all”.

T

TCFD

The Task Force on Climate-related Financial Disclosures – created to increase and improve corporate reporting of climate-related financial decision-making information.

Transition plan

A time-bound action plan that clearly outlines how an organization will achieve its strategy to pivot its existing assets, operations, and entire business model towards a trajectory that aligns with the latest and most ambitious climate science recommendations, ie halving greenhouse gas (GHG) emissions by 2030 and reaching net-zero by 2050 at the latest, limiting global warming to 1.5°C.

Triple Bottom Line (TBL or 3BL)

A business concept that encourages businesses to measure their environmental and social impact alongside the detailed measurement related to their financial performance. The three Ps of the triple bottom line are well known—People, Profit, Planet. It has been proven repeatedly that it is possible to perform well and do good.

U

UNFCCC (United Nations Framework Convention on Climate Change)

The United Nations entity tasked with supporting the global response to the threat of climate change. The parent treaty of the 2015 Paris Agreement. CDP is an accredited observer to the UNFCCC.

V

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W

Waste diversion

Activity that disposes of waste through methods other than incineration or landfilling. Examples include reuse and recycling.

Waste-to-energy

The conversion of non-recyclable waste materials into usable heat, electricity, or fuel through a variety of processes, including combustion, gasification, pyrolization, anaerobic digestion, and landfill gas (LFG) recovery.

Wastewater

Water that has been used for a purpose and conveyed by building plumbing systems toward a point of treatment and disposal. Wastewater from buildings can be classified as graywater, blackwater, or process wastewater.

Water security

The capacity of a population to safeguard sustainable access to adequate quantities of acceptable quality water for sustaining livelihoods, human wellbeing, and socioeconomic development, for ensuring protection against water-borne pollution and water-related disasters, and for preserving ecosystems in a climate of peace and political stability (from UN Water). Reduced water security is an impact of climate change.

X

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Y

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Z

Zero waste

A set of principles focused on products and productions having no waste is sent to landfills.