Climate Change & Corporate Accounting Vocabulary

Vocabulary flashcards covering weather vs. climate, corporate governance, materiality, paleoclimate proxies, corporate GHG accounting scopes, energy balance physics, and greenhouse gas metrics.

Weather

The short-term condition of the atmosphere occurring over periods from minutes to days, including variables such as temperature, precipitation, humidity, air pressure, wind, and cloud cover.

Climate

The average weather conditions of a place measured over a long period of time, typically described using long-term temperature and precipitation patterns.

Attribution Science

A branch of climate science that evaluates how much climate change contributed to the probability or severity of a specific extreme weather event.

Intergovernmental Panel on Climate Change (IPCC)

An international organization that reviews, evaluates, and summarizes existing scientific research on climate change, its impacts, and potential responses without conducting original research itself.

Shareholder Primacy

A corporate governance view, associated with Milton Friedman, asserting that a company's primary responsibility is to generate profits for its shareholders while obeying the law and social rules.

Stakeholder View

A business management perspective holding that companies should balance the interests of all affected groups, including customers, employees, suppliers, communities, shareholders, and the environment.

Negative Externality

A cost resulting from a company's actions that is imposed on third parties or society who are not directly involved in the underlying transaction.

Financial Materiality (Outside-in)

The principle that environmental or climate information is material if its impact on the business could influence an investor's decision.

Double Materiality

A reporting framework that considers both how external climate factors affect a company financially (outside-in) and how the company's activities impact climate and society (inside-out).

Global Temperature Anomaly

The calculated difference between an observed temperature and a designated baseline average temperature ($\text{Observed temperature} - \text{baseline temperature}$).

Arctic Amplification

The phenomenon where the Arctic region warms at a faster rate than the global average.

Phenology

The study of the timing of recurring biological events in nature, such as flowering, animal migration, and breeding.

El Niño–Southern Oscillation (ENSO)

A natural short-term climate cycle in the tropical Pacific Ocean oscillating between warm (El Niño) and cool (La Niña) phases, causing global weather variability.

Tragedy of the Commons

An economic scenario where individual users acting independently in their self-interest overuse and deplete a shared, open-access resource, causing collective harm.

Paleocene-Eocene Thermal Maximum (PETM)

A major global warming event roughly $56\,\text{Ma}$ caused by a massive atmospheric carbon injection, raising global temperatures by $5\text{--}8^\circ\text{C}$ over approximately $200,000\,\text{years}$.

Eemian

The last major interglacial period ($130\text{--}115\,\text{thousand years ago}$), characterized by temperatures $1\text{--}3^\circ\text{C}$ warmer and sea levels $6\text{--}9\,\text{meters}$ higher than present.

Milankovitch Cycles

Cyclical variations in Earth's orbital characteristics—eccentricity (shape), obliquity (tilt), and precession (wobble)—that alter the geographic and seasonal distribution of solar energy.

Paleoclimate Proxy

Indirect environmental evidence—such as tree rings, ice cores, coral skeletons, lake sediments, and benthic foraminifera—used to reconstruct climate conditions before written instrumental records.

Greenhouse Gas Protocol (GHG Protocol)

A standardized corporate standard establishing global frameworks to measure, manage, and report greenhouse gas emissions across Scope 1, Scope 2, and Scope 3 categories.

Scope 1 Emissions

Direct greenhouse gas emissions originating from sources directly owned or controlled by a company, such as fuel burned in company-owned vehicles or facilities.

Scope 2 Emissions

Indirect greenhouse gas emissions resulting from the generation of purchased electricity, steam, heating, or cooling consumed by a company.

Scope 3 Emissions

All indirect greenhouse gas emissions produced across a company's broader value chain, including suppliers, employee commuting, business travel, and consumer product use.

Global Warming Potential (GWP)

A relative measure of how much heat a specific greenhouse gas traps in the atmosphere compared to carbon dioxide ($\text{CO}_2$ baseline GWP = 1) over a specified time horizon.

Solar Constant

The amount of incoming solar electromagnetic radiation measured at the top of Earth's atmosphere, equal to approximately $1,361\,\text{W/m}^2$.

Albedo

The fraction or percentage of incoming solar radiation reflected by a surface, averaging approximately $0.30$ (or $30\%$) for planet Earth.

Wien's Displacement Law

A physics relationship ($\lambda_{max} = \frac{2897}{T}$) stating that the peak wavelength ($\lambda_{max}$) of emitted blackbody radiation is inversely proportional to absolute temperature ($T$).

Stefan–Boltzmann Law

A law of thermodynamics ($\frac{P}{A} = \sigma T^4$) stating that the thermal radiation power emitted per unit area by a blackbody is proportional to the fourth power of its absolute temperature.