Glossary

Corporate Governance Code
The aim of the German Corporate Governance Code is to make Germany’s corporate governance rules transparent for both national and international investors, thus strengthening confidence in the management of German corporations. The Code addresses all major criticisms – especially from the international community – levelled against German corporate governance, namely

• inadequate focus on shareholder interests;
• the two-tier system of executive board and supervisory board;
• inadequate transparency of German corporate governance;
• inadequate independence of German supervisory boards;
• limited independence of financial statement auditors.

Sustainability – how the term originated
The origin of the idea of sustainability is attributed to Hans Carl von Carlowitz, a senior mining administrator in the state of Saxony. In his treatise “Sylvicultura oeconomica”, published in 1713, he coined the term in the face of an extreme shortage of timber caused by mismanagement. For Carlowitz, sustainable forestry meant that the rate at which timber was felled should not exceed the rate at which it could regrow.

Sustainability and the Brundtland Report
In 1987, the World Commission on Environment and Development (WCED), also known as the Brundtland Commission after its chairwoman, former Prime Minister of Norway Gro Harlem Brundtland, drew up a report entitled “Our Common Future”. In its final report, the Commission put forward a concept that later became the key statement on sustainable development. It defined the guiding principle of sustainability as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Sustainability and ESG criteria
When measuring sustainability in a company or business, three central factors are considered, the so-called “ESG (Environmental, Social and Governance) criteria”. Numerous reports suggest that investment risk is reduced if these non-financial ESG criteria are taken into account.

Sustainability, ESG and Corporate (Social) Responsibility (CR and/or CSR)
"Corporate [Social] Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” (World Business Council for Sustainable Development)