Activities in the fossil fuel sector

Activities in the fossil fuel sector are defined as follows in the PAI regime: exploration, mining, extraction, production, processing, storage, refining or distribution (including transportation, storage and trade) of fossil fuels.

Atypical employment relationships

Atypical employment relationships within the context of E3’s KPIs include temporary work, fixed-term employment relationships, employees in marginal employment and the self-employed. Part-time employment is not included here.


Biodiversity-sensitive areas

Definition under the PAI regime: “Biodiversity-sensitive areas” means the Natura 2000 network of protected areas, UNESCO World Heritage sites and key biodiversity areas (“KBAs”), as well as other protected areas, as referred to in Appendix D of Annex II to Commission Delegated Regulation (EU) 2021/2139. “Activities negatively affecting biodiversity-sensitive areas” means activities that are characterised by all of the following:

a) They negatively affect these areas by leading to the deterioration of natural habitats and the habitats of species and to the disturbance of the species for which a protected area has been designated.

b) None of the required mitigation measures or environmental impact assessments or similar have been implemented for these activities.


CEO-to-worker pay ratio

Denotes the proportion of the annual overall remuneration of the highest paid employee to the median of the annual overall remuneration of all employees (excluding the highest paid employee).


CO2 equivalents are used as a measure for standardising the climate impact of various greenhouse gases.

Core components

Within the context of the E3 exclusion criteria, “core components” refers to construction components and parts that are essential for a product to function. This does not include dual-use products.

Corporate carbon footprint

Denotes the quantity of greenhouse gas emissions that a company directly or indirectly produces through its activities and is based on the aggregated emissions under scope 1, 2 and 3.


Corruption within the meaning of the E3 exclusion criteria primarily means bribery and/or corruption to restrict competition (e.g. in the course of tenders) and to gain other advantages (bribery of officials and politicians).


Emissions to water

Emissions to water are defined within the PAI framework as follows: direct emissions of priority substances as defined in Article 2 (30) of Directive 2000/60/EC of the European Parliament and of the Council (listed in Annex X) and direct emissions of nitrates, phosphates and pesticides.

Energy intensity

Calculation of the relative energy consumption, based on an output indicator (in this case: revenue).


ESG (environmental, social and governance) denotes the three main factors that investors take into account in their sustainability-related risk and opportunity assessments of companies. While the term “sustainability” describes the long-term viability of global systems, ESG refers to the organisational structures, processes and strategies of companies to steer environmental, social and governance-related topics within a business context.

ESG Data Convergence Initiative

The ESG Data Convergence Initiative is led by major general partners and limited partners committed to establishing a basic set of standardised and meaningful ESG KPIs on the private equity market.

EU list of non-cooperative countries and jurisdictions for tax purposes

The EU list of non-cooperative countries and jurisdictions for tax purposes (“black list”) was created to fight tax fraud, tax evasion, tax avoidance and money laundering. It features non-EU countries that encourage abusive tax practices to undercut member state income from corporation taxes. The list is regularly updated and in January 2023 it included the following countries and jurisdictions: US Virgin Islands, American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, and Vanuatu.

EU Disclosure Regulation

Regulation (EU) No. 2019/2088 (also known as the “Sustainable Finance Disclosure Regulation” (SFDR)) defines sustainability-related disclosures in the financial services sector in the sense of transparency obligations and/or taking into account sustainability topics in the strategies, processes and products of financial market participants.

EU Taxonomy

Regulation (EU) 2020/852 lays down the economic activities that play a major positive role in achieving the EU’s environmental targets. It constitutes the basis for the corresponding reporting obligations for companies in the EU and for determining the degree of environmental sustainability of investments. Going forward, the taxonomy will be expanded to include social criteria. Under the regulation, financial market participants, e.g. investment funds seeking to market a financial product as a green one, have an obligation to report on the share of environmentally sustainable investments within the meaning of the Regulation in its portfolio.

“Taxonomy-eligible” in this context are economic activities that are covered by the taxonomy (but that do not necessarily fulfil the criteria in substance). By contrast, “taxonomy-aligned” are all those activities that are covered by the taxonomy and fulfil the minimum criteria required: making a substantial contribution to at least one of the defined sustainability objectives, while also having no substantial negative impact on the remaining objectives and meeting minimum standards on human rights and occupational safety.


Fracking technologies

Hydraulic fracturing (fracking for short) is used among other things to extract what is known as “unconventional” oil and gas. It involves creating fractures in rocks deep underground using high pressure to improve the permeability of the rock layers. The fracking liquid used generally contains added chemicals to yield the desired change to the rock. Together with the often very high frequency and density of drilling, this results in a significantly higher risk, among other things, of contaminating the groundwater. Relevant activities within the meaning of the E3 exclusion criteria are primarily the extraction of fossil fuels through high-volume fracking and the production of fracking liquids and drill rods.


The number of full-time equivalents (= full-time positions)



Relevant activities within the meaning of the E3 exclusion criteria primarily include (online) casinos, sports betting offerings and the production and operation of gaming machines.

Gender pay gap, unadjusted

This KPI means the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees. Unadjusted means that the portion of the difference in earnings attributable to structural differences like the level of education, role in the company, etc. is not deducted.

GHG Protocol Corporate Standard

The most widely used standard worldwide by companies for reporting their greenhouse gas emissions.

Greenhouse gas emissions, scope 1

Scope 1 emissions are direct emissions that are produced within organisation borders – e.g. through own power plants, own gas / oil heating, own vehicles. Calculation is based on the GHG Protocol Corporate Standard.

Greenhouse gas emissions, scope 2

Scope 2 emissions are specific indirect emissions that are produced outside the organisation borders – e.g. through the production and purchase of electricity, steam, heating and cooling from outside organisation borders. Calculation is based on the GHG Protocol Corporate Standard.

Greenhouse gas emissions, scope 3

Scope 3 emissions are other indirect emissions that are related to the company’s activities but originate from other sources that are outside the organisation borders and not monitored by the company, e.g. through collecting and processing purchased material and fuels, transport-related activities (purchased and sold goods, business trips and employee mobility, etc.), use of the sold products and waste disposal. Calculation is based on the GHG Protocol Corporate Standard.

Greenhouse gas intensity

Calculation of the relative greenhouse gas emissions, based on an output indicator (in this case: revenue).


Hazardous and radioactive waste

Hazardous and radioactive waste are defined as follows under the PAI regime: “hazardous waste” means hazardous waste as defined in Article 3 (2) of Directive 2008/98/EC of the European Parliament and of the Council (waste featuring one or more of the hazardous characteristics listed under Appendix III). “Radioactive waste” means radioactive waste as defined in Article 3 (7) of Council Directive 2011/70/Euratom.


ILO core labour standards

See “labour and human rights, fundamental

Institutional Limited Partners Association (ILPA)

The Institutional Limited Partners Association is an umbrella association under which institutional investors in the private equity sector (limited partners) have joined forces.


Key suppliers

Key suppliers within the meaning of the E3 exclusion criteria are primarily direct suppliers (tier 1) from whom goods or services are procured that are essential to the core business of the procuring company. In the event of these suppliers being accountable for controversial acts, the extent to which the procuring company can influence the supplier and/or switch to alternative suppliers is also taken into consideration.


Labour and human rights, fundamental

The term “fundamental labour rights” is based on the ILO core labour standards, as they are known, of the International Labour Organization (ILO), the United Nation’s oldest specialised agency. They cover the following four principles:

  • Freedom of association and collective bargaining
  • Elimination of forced labour
  • Abolition of child labour
  • Elimination of discrimination in employment and occupation

Fundamental human rights are primarily based on the United Nations’ Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises and the United Nations’ Guiding Principles on Business and Human Rights. In line with the E3 exclusion criteria, they relate to the rights of individuals and groups affected by the activities of the respective companies.


Materiality analysis

The materiality analysis looks at the influence that ESG topics have on the success of a company and the impact that the company has on ESG issues, above all on environmental and social issues (“double materiality”).


OECD Guidelines for Multinational Enterprises

In addition to the ILO core labour standards and the UN Global Compact, the OECD Guidelines are the most important tool for encouraging good governance on a global level. They describe expectations towards companies operating worldwide when dealing with trade unions, human rights, environmental protection, anti-corruption or the protection of consumer interests.


Paris Climate Agreement

The “Paris Agreement” was adopted on 12 December 2015 at the World Climate Conference in the French capital. Against the backdrop of the 2030 Agenda for Sustainable Development adopted shortly before, 195 nations signed up to this Agreement to mitigate climate change and make the global economy more climate-friendly. To be more specific, the Agreement states that global warming should be limited to well below 2 degrees Celsius, preferably to 1.5 degrees Celsius (compared to pre-industrial levels).


Relevant activities within the meaning of the E3 exclusion criteria are primarily the production of pornographic content (films, online content, photos etc.) and delivery of it (e.g. via retail, media and telecommunications companies and operators of online platforms). The term “pornography” is based on the definition of the German Federal Court of Justice (Bundesgerichtshof, BGH): “A portrayal is to be considered pornographic if it excludes all other human connections to highlight sexual acts in a crude and intrusive manner and overall it generally aims to solely or primarily awaken the lascivious interest of the onlooker in sexual things”.

Principal Adverse Impacts (PAI)

The Principal Adverse Impacts constitute the most important negative impact of investment decisions on sustainability factors. They are part of the EU Disclosure Regulation and as a result part of the transparency obligations for financial market participants.


Science Based Targets initiative

The Science Based Targets initiative (SBTi) offers companies a scientifically backed method for setting greenhouse gas reduction targets which are in line with the Paris Climate Agreement targets.

Supervisory board member, independent

Within the context of E3’s KPIs, supervisory board members (in line with the German Corporate Governance Code) are considered independent from the company and its management board if they have no personal or business relationship with the company or its management board that may cause a substantial – and not merely temporary – conflict of interest. Independence might be compromised, for example, if the supervisory board members themselves or their close family members:

  • hold ≥ 10% of the company’s shares;
  • were members of the company’s management board in the two years prior to appointment;
  • currently maintain or maintained in the year up to their appointment, directly or as shareholders, or in a leading position of a non-Group entity, a material business relationship with the company or one of the entities dependent upon the company (e.g. as customer, supplier, lender or advisor);
  • are a close family member of a management board member; or
  • have been a member of the supervisory board for more than twelve years.

The term “sustainability” describes the long-term viability of global systems – in terms of economic, social and environmental aspects and the long-term well-being of the company and the planet.



Relevant activities within the meaning of the E3 exclusion criteria are primarily the growing of tobacco and the production of tobacco products and accessories (e.g. cigarette filters). This does not include dual-use products.


UN Global Compact

The UN Global Compact is the world’s largest and most important initiative for sustainable and responsible governance. It helps companies to strategically anchor their sustainability on the basis of 10 universal principles and to implement sustainable development goals.

UN Principles for Responsible Investment

The UN Principles for Responsible Investment are an investor initiative in partnership with the United Nations, dedicated to the practical implementation of six defined principles for responsible investment.

UN Sustainable Development Goals

In 2015, the United Nations defined 17 global sustainable development goals (SDGs). They form the basis of a global plan to encourage sustainable peace and prosperity and to protect our planet. The SDGs are one of the most important international references for structuring sustainability targets at state and company level.


Weapons and/or armament goods, conventional

Relevant products within the meaning of the E3 exclusion criteria are primarily the weapons and armament goods listed in the annex to the Federal Republic of Germany’s Weapons Control Act (Gesetz über die Kontrolle von Kriegswaffen, KWKG), referred to as the “War weapons list”, provided that they are not classified as banned or otherwise controversial. Examples of key product categories are missiles, fighter jets and helicopters, war ships, combat vehicles, guns and ammunition. This list has been expanded to include weapons that are not covered by the Act, such as specific types of firearms (e.g. handguns). This does not include dual-use products.

Weapons, banned or particularly controversial

Relevant products within the meaning of the E3 exclusion criteria are those weapons that are banned by international conventions, in particular by the Nuclear Non-Proliferation Treaty, the Biological Weapons Convention, the Chemical Weapons Convention, the Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons, the Anti-Personnel Mine Ban Treaty (also known as the Ottawa Convention) and the Oslo Declaration on Cluster Munitions. Weapons considered highly controversial but not covered by international agreements or their bans are also covered.

Weapons, controversial

The term used within the PAI regime refers to anti-personnel mines, cluster munition, chemical and biological weapons. The relevant KPIs take into account revenue generated in the reporting year from production or sale of the corresponding weapons.