Green Product Standards | Design Journal

Nexity Network offers businesses of all sizes a comprehensive single-standard solution for product circularity certification system by reflecting sensitive sustainability data on the blockchain and interconnected circular metrics to develop safe and green products.

The passport will run on a smart contract with an expiration date based on the approved tier for each product.

Product Circularity Tier System

Standard Requirement Categories

Material Health

Chemicals and materials used in the product are selected to prioritize the protection of human health and the environment, generating a positive impact on the quality of materials available for future use and cycling.

Product Circularity

Products are intentionally designed for their next use and are actively cycled in their intended cycling pathways.

Clean Air & Climate Protection

Product manufacturing results in a positive impact on air quality, the renewable energy supply, and the balance of climate-changing greenhouse gasses.

Water & Soil Stewardship

Water and soil are treated as precious and shared resources. Watersheds and soil ecosystems are protected, and clean water and healthy soils are available to people and all other organisms.

Social Fairness

Companies are committed to upholding human rights and applying fair and equitable business practices.

Certification Requirements and Levels

Nexity’s passport process is based on the concept of continuous improvement and, thus, there are four possible levels of achievement within each of the standard’s five key requirement categories: Green Diamond, Eco Sapphire, Half-Emerald, Basic.

To reach the desired achievement level within each category, the product must meet all of the requirements for that level, in addition to the requirements at all lower levels.

Certification is awarded to a product when it meets the requirements for the desired achievement level in each of the five key categories, as well as the general requirements, the packaging requirements, and the animal welfare requirements. The product’s overall certification level is equal to the lowest level achieved in the five categories (Green Diamond, Eco Sapphire, Half-Emerald, Basic).

The product’s certification level is stated on the certificate and certification level, along with a scorecard indicating the level achieved in each of the five categories.

Each product certification is valid for one year. The product must be recertified by its expiration date to maintain its status as a certified product. As part of the recertification process, the product assessment must be updated and reviewed by Nexity’s Council to ensure continued compliance with the standard requirements.

Note: Some requirements in the standard address activities that are also subject to regulation by local, state, or federal authorities.

However, nothing contained in the Product Standard changes legal regulatory requirements or prescribes how compliance is to be achieved.

Demonstration of compliance with certain key regulations is required in some sections of the standard, but this in no way changes the underlying regulatory requirements.

Restrictions to Basic Certification

At the Basic level, a product is starting out on the path to certification. A company must conduct an inventory of the materials used to make the product, energy use, water and soil stewardship, and social fairness issues affecting their industry and production region.

The company must also define optimization strategies and take initial steps toward the development of circular products and responsible manufacturing practices.

The Basic level of certification is designed to recognize a company’s intent to improve the way its product is made, establishing a commitment to ongoing assessment and optimization.

Therefore, a product may be certified at the basic level for a maximum of one year and must recertify at the Half-Emerald level or higher once the certification has expired or it will be delisted from the program.

Alternatively, in cases where technical, performance or market barriers prevent the achievement of the Half-Emerald level in any standard category, the product may be recertified at the Basic level if:

1. The applicant publicly discloses an explanation of the limitation preventing the achievement of the Half-Emerald level requirements;

2. On-going measurable improvement is achieved;

Certification Process

Key steps in the process for achieving certification, fees, and resources for implementation include the standard and supporting reference documents, assessment methodologies, program policies, and other guidance documents.

Product Eligibility

Products Eligible for Certification

For certification purposes, a product is defined as any physical item that can be routinely and individually purchased from the certification applicant by other entities. This definition includes materials, sub-assemblies, and finished products.

General Requirements

1. Name, title, and copy of the passport of designated staff responsible for maintaining the integrity of certified products.

2. A process for controlling for changes pertinent to the certification and notifying the certification body when relevant changes are planned or otherwise identified.

3. A method of staying informed about and/or controlling for material changes that may occur in the supply chain. One of the following is required:

• Suppliers must be required to communicate any proposed changes to the manufacturing process or to intentional product inputs that may alter the chemical composition of the product, or other aspects relevant to certification (e.g., recycled content), to the certification holder. When there are multiple supply chain tiers, suppliers must communicate this requirement to their own suppliers;
• All suppliers that provided chemical composition data, or other product relevant data (e.g., amount of recycled content), for the prior certification must be contacted again prior to renewal and asked to provide updated data or to confirm that no relevant changes were made by them or their suppliers;

4. Management system best practices including:

• A document control process;
• Internal self-audits conducted at regular planned intervals (at least once each certification cycle);
• A corrective action process;

Environmental Policy and Management

Companies are committed to protecting the environment and are responsibly managing potential environmental impacts.

Assessing Environmental Risks and Opportunities

Identify environmental risks and opportunities for all final manufacturing stage facilities and for the certified product.

The risk and opportunity assessment must include:

1. Identification of environmental risks associated with processes occurring at final manufacturing stage facilities, countries in which the final manufacturing stage facilities are located, the product’s supply chain, product use, and product end of use.

The following issues are de facto high-risk in the noted scenarios:

Greenhouse gas emissions and contribution to climate change are high-risk issues for:

• Final manufacturing stage facilities with combined total scope greenhouse gas emissions ≥ 10,000 metric tons CO2e/year;
• Products require energy during the use phase (unless the product saves more energy than it uses);

Air pollution is a high-risk issue for:

• Final manufacturing stage facilities with on-site combustion power plants (including biomass combustion);
• Final manufacturing stage facilities at which processes commonly known to be air pollutant intense take place. This includes (but is not limited to): Smelting metals, refining oil, producing cement, using high volumes of organic solvents, and incinerating waste;

Water availability with the high-risk issues for:

• Final manufacturing stage facilities purchase and/or withdraw ≥ 100,000 m3 of fresh water per year when located in medium to high-stress location(s);
• Products require high volumes of water during the use phase;

Water and/or soil quality (for example pollution) with high-risk issues for:

• Final manufacturing stage facilities with pollutant intense processes;
• Final manufacturing stage facilities for which stormwater discharge is regulated per the corresponding regional regulatory permitting system. In regions where stormwater is not regulated, any facility within the specific categories of industrial activity that must be covered under the U.S. National Pollutant Discharge Elimination System represents high risk for this issue;
• Products that are primary contributors to microfiber and microplastic pollution (for example textile and apparel products made from synthetic fibers that are wet-processed and/or that require washing with water during the use phase, tires, and plastic pellets);

Waste generation is a high-risk issue for:

• Final manufacturing stage facilities for which hazardous waste is regulated per the corresponding regional regulatory permitting system. In the region where hazardous waste is not regulated, any facility producing waste that is listed or characterized as hazardous waste as defined by the European Union’s Waste Framework Directive and associated List of Waste or the U.S. Environmental Protection Agency represents high risk for this issue;

2. Identification of best practices employed to address the risks.

3. Information regarding the impact and importance of identified risks.

4. Prioritization of the risks and opportunities identified.

Strategy for Environmental Policy Implementation

Environmental performance data are regularly analyzed to ensure manufacturing processes are not having a negative impact on the environment and to measure progress toward environmental performance goals.

For the applicant company OR for all final manufacturing stage companies, develop a strategy for implementing the environmental policy at all final manufacturing stage facilities and report on implementation progress at each recertification.

The strategy must:

1. Address priority risks and opportunities.

2. Include specific time-bound performance and impact objectives to guide decision-making.

3. Define the scope of implementation.

4. Define the company’s human, technical, and material resource allocation for implementation.

For recertification, environmental performance data must be collected and analyzed to measure progress toward achieving environmental targets and objectives, and areas for improvement must be identified. For any identified areas of poor performance, methods of improving outcomes must also be identified and evaluated and the strategy refined accordingly.

Demonstrating Commitment

Demonstrate commitment and support for establishing and maintaining a culture whereby employees and business partners are able to achieve high levels of environmental performance.

The applicant’s leadership team (C-level executive and/or Board of Directors) must demonstrate commitment and support by:

1. Communicating the company’s environmental aspirations and strategy for protecting the environment internally and/or externally.

2. Defining a position to actively lead on protecting the environment, oversee implementation of the strategy, and drive continuous improvement efforts.

3. Ensuring there are defined procedures for escalating environmental risks and identify impacts to the executive team.

Environmental Management Systems

For the final manufacturing stage facility, implement a management system that supports the achievement of the environmental policy commitments within facility operations.

For the applicant company OR for all final manufacturing stage companies, implement a responsible sourcing management system that supports the achievement of the environmental policy commitments within the product’s supply chain.

For the Half-Emerald level, the management system must include the following elements:

1. Designated staff with environmental compliance responsibilities.

2. Designated oversight function and process.

3. Procedures that support the implementation of the environmental policy at all final manufacturing stage facilities.

4. Education for staff with environment-related duties on environmental best practices relevant to the facilities.

5. Procedures to measure and evaluate activities against the environmental policy.

6. Policies and procedures for the prompt implementation of corrective and preventive actions.

For the Almost-Sapphire level, the responsible sourcing management system must include the following elements:

1. Designated staff with responsible sourcing responsibilities.

2. Designated oversight function and process.

3. Procedures to communicate to suppliers the company’s environmental policy and any associated sourcing business processes.

4. Supplier contractual requirements for environmental policy compliance and monitoring (for example supplier codes of conduct is defined as a contractual term). Contracts must require suppliers to extend environmental compliance expectations to their suppliers.

5. Evaluation of new suppliers prior to the awarding of contracts to determine if the supplier can meet requirements.

6. Policies and procedures for the prompt implementation of corrective and preventive actions.

7. Education for sourcing and/or procurement team(s) on responsible sourcing best practices.

8. Business procedures for identifying and documenting the cause and resolution of environmental issues and/or impacts in the supply chain.

Environmental Protection Incentives

For the applicant company OR for all final manufacturing stage companies, incorporate environmental performance results into relevant employee and executive performance evaluations and incentive structures.

The following are required:

1. Performance assessments of any executives or employees with designated environmental responsibilities must include consideration of metrics derived from the environmental policy and strategy.

2. Environmental performance results must be considered in compensation packages/incentive plans for top company executives and management with environmental management or oversight functions.

Measurable Improvement

What a product is made of and how it is made is measurably improved until the product achieves at least the Almost Sapphire level requirements in all five stages.

While the Almost Sapphire level reflects high achievement, reaching the Green Diamond level in all categories should be the ultimate goal.

At recertification, companies need to demonstrate that at least one measurable improvement has been made in at least one of the five program categories since the prior certification.

For recertification at the Half-Emerald or Almost Sapphire, the policy, procedures, practices, and/or programs must be reviewed to identify deficiencies and implement changes that will lead to improved performance.

Remedial activities must be underway and seek to identify and address root causes.

The measurable improvement required is in addition to any actions already required in the categories (for example progress on strategies and optimization plans.

Material Health Requirements

Chemicals and materials used in the product are selected to prioritize the protection of human health and the environment, generating a positive impact on the quality of materials available for future use and cycling.

Requirements Summary

To achieve a desired level within the category, the requirements at all lower levels must also be met.

Basic Level

1. Product is in compliance with the Restricted Substances List.

2. Product is 100% characterized by generic material.

3. Strategy developed to phase out or optimize all x-assessed or gray-rated chemicals.

4. Product does not contain organohalogen substances of special concern, or functionally-related, non-halogenated classes of equivalent concern, above relevant thresholds.

5. Product is ≥ 75% assessed (complete formulation information collected for 100% of materials released directly into the biosphere).

6. Product is ≥ 95% assessed (complete formulation information collected for 100% of materials released directly into the biosphere).

Half-Emerald Level

1. Product does not contain materials with > 1% carbon-bonded halogens by weight, substances causing an equivalent level of concern, or exposure is unlikely or expected to be negligible.

3. Product has low VOC emissions (required for products permanently installed in buildings).

4. Product complies with VOC content limits (required for liquid and aerosol consumer and construction products). 100% of homogeneous materials subject to review are assessed (if none have a gray rating due to insufficient data).

Almost Sapphire

1. Product is optimized for material health (i.e., all x-assessed chemicals replaced or phased out).

2. Strategy developed to either increase the percentage of preferred materials and chemicals in the product or optimize the chemistry in the supply chain.

3. Product has very low VOC emissions or is inherently non-emitting (required for products permanently installed in buildings).

4. All product-relevant process chemicals are assessed (if none have a gray rating due to insufficient data) and no x-assessed chemicals are used.

Green Diamond

1. ≥ 75% of the product’s input materials or chemicals have a Material Health Certificate. A strategy is developed to increase percentages over time.

2. Environmental health impact hotspot analysis based on life cycle assessment completed, emissions and resource use hotspots that impact human and environmental health are identified, and material health optimization strategy is developed based on the results.

Restricted Substances List Compliance

In alignment with leading regulations that aim to protect human health and the environment, the use of well-known toxic chemicals in the product is avoided.

Comply with the Restricted Substances List (RSL)

The product and its homogeneous materials comply with relevant restrictions on the Restricted Substances List.

The RSL consists of a core list, which is applicable to all material and product types, as well as additional lists that are applicable to specific material and product types. Unless noted otherwise, the lists indicate the maximum allowable concentration of each restricted substance in any homogeneous material subject to review in a certified product.

Avoidance of Organohalogens and Functionally Related Chemical Classes of Concern

Organohalogens, a class of substances associated with toxicity concerns in multiple use-cycle stages, are progressively avoided, beginning with high organohalogen content materials, classes of special concern, and functionally related, non-halogenated classes of equivalent concern.

Applicable Achievement Levels

Basic Level, Half-Emerald, Almost Sapphire

Requirements

Basic level

Use materials that are not and do not contain organohalogen substances of special concern, or functionally related, non-halogenated substances of equivalent concern, above relevant thresholds.

Half-Emerald

Use materials in the product that do not contain organohalogen substances in excess of 1% by weight.

Almost Sapphire

Use materials in the product that do not contain organohalogen substances above subject to review limits (for example 100 ppm or lower if specific concentration limits are defined).

Material and Chemical Inventory

An increasing percentage of the product’s material and chemical composition is known so that possible risks the materials and chemicals may pose to human health and the environment can be assessed and strategies for using safer chemistry can be developed.

Applicable Achievement Levels

Basic Level, Half-Emerald, Almost Sapphire

Requirements

Basic level
Characterize all homogeneous materials in the product by concentration and generic material type or category/name. In addition, fully define the chemical composition of products that are released directly into the biosphere as part of their intended use (for example soaps, and paints). For other product types, collect the chemical composition information necessary to assess at least 75% of the product.

Half-Emerald
Fully defines the chemical composition of products released directly into the biosphere as part of their intended use (for example soaps, paints). For other product types, collect the chemical composition information necessary to assess at least 95% of the product.

Almost Sapphire
Fully define the chemical composition of all homogeneous materials within the product.

Green Diamond
Fully defines the chemical composition of all process chemistry that comes into contact with the product or its material constituents during the final manufacturing stage.

Characterizing Materials in the Product

The concentration of each material as a percentage of the total product weight must be determined.

Fully Defining the Chemical Composition of Materials

Toxicological assessment of material requires full material disclosure from the supplier(s)/formulator(s) controlling the chemical composition of the material. A homogeneous material is considered fully defined when the chemical names and chemical identifiers are known for all chemicals subject to review. The chemicals subject to review in each homogeneous material are those present at a concentration ≥ 0.01% (100 ppm).

Exceptions:

1. If a limit below 100 ppm is indicated for a specific substance by the Restricted Substances List, the lower limit applies.

2. Exemption: A product may contain a maximum of 1% exempt components by weight. The exemption is allowed for minor, commodity-type components including sewing thread and solid, preformed fasteners, and bearings. Homogeneous materials and substances in these component types may be exempt from review if the following conditions are met:

• Metallic components are in compliance with the Restriction of Hazardous Substance directive;
• Non-metallic components are in compliance with the Restricted Substances List;

3. In any case where the relevant specialized assessment methodology for Recycled Content Materials.

Assessment Methodology, Geological Materials Assessment Methodology, Externally Managed Component Assessment Methodology) allows or requires a different method of defining materials, including different methods and/or limits for determining what chemicals are subject to review, the methods indicated by the relevant methodology documents take precedence.

Assessing Chemicals and Materials

To encourage continuous improvement of maternal health, an increasing percentage of the product’s chemicals and materials are assessed. By the time a product reaches the Almost Sapphire level, all materials and chemicals subject to review within the product have been assessed as compatible with human and environmental health.

Applicable Achievement Levels

Basic level, Half-Emerald, Almost Sapphire, Green Diamond

Requirements

1. Assess at least 75% of the product.

2. Assess at least 95% of the product.

3. Assess 100% of the product.

4. Assess 100% of the product and all process chemistry that comes into contact with the product or its material constituents during the final manufacturing stage.

Assessing Chemicals and Materials

Homogeneous materials and chemicals subject to review, including process chemistry must be assessed according to the Material Health Assessment Methodology and supporting documents.

Based on these methods, chemicals subject to review are assigned a, b, c, x, or gray chemical risk ratings, and homogeneous materials are assigned A, B, C, X, or gray ratings.

Material or component that is separately certified and used in another product seeking certification may count as assessed at the same Material Health level and percentage assessed at which it was certified.

Materials assessed as A, B, or C may only contain chemicals subject to review that have been assigned a, b,or c chemical risk ratings.

Materials assessed as X will contain at least one chemical subject to review that has been assigned an x risk rating and may also contain chemicals with gray ratings indicating insufficient data for assessment.

Material Health Optimization Strategy

A strategy is in place for prioritizing the use of materials and chemicals known to be compatible with human and environmental health. Demonstrable progress is made toward achieving the strategy.

Requirements

Develop a Material Health optimization strategy and demonstrate progress toward achieving the strategy at each recertification.

The strategy must include a plan for assessing and optimizing or eliminating all X/x assessed and gray materials and chemicals subject to review.

One or more material(s) or chemical(s) must be targeted for specific optimization actions in the near-term (defined as 0-2 years).

Optimization work relevant to at least one material or chemical must have been completed during the two-year period between certification and recertification.

Increasing the percentage of A/a and/or B/b assessed materials and chemicals in the product.

Using Optimized Materials

The product is made from chemicals and materials that have been intentionally selected based on their preferred safety attributes.

The product does not contain chemicals classified or listed as carcinogenic, mutagenic, or reproductive toxicants (CMRs), or, if these substances are present, exposure to them is unlikely or expected to be negligible.

In addition, the product does not contain persistent, bioaccumulative, toxic, or very persistent and very bioaccumulative (vPvBs) substances. The product also does not contain substances that cause an equivalent level of concern or exposure to them is unlikely or expected to be negligible.

Exposure to hazardous chemicals during final manufacture, use, and end-of-use of the product is unlikely or expected to be negligible.

An increased percentage of the product is made from chemicals and materials that are assessed as preferable for human and environmental health.

Use materials in the product that do not contain substances that are:

Classified or listed as known or suspected to cause cancer, birth defects, genetic damage, reproductive harm (CMRs), or cause an equivalent level of concern, unless exposure to these substances during the product’s final manufacturing, use, and end-of-use is unlikely or expected to be negligible.

The percentage of the product that is assessed must be determined as follows:

1. For each homogeneous material in a product the applicant must either:

• Count the entire material as assessed, by weight, if the material has received an A or B assessment rating;
• Count the material as partially assessed based on assessed chemicals subject to review in the material. In this case, the percentage assessed for the material is equal to the lower of:

1. the percentage by weight of all a or b assessed chemicals within the product,
2. the percentage by the number of all a or b assessed chemicals within the product.

Volatile Organic Compound (VOC) Emissions

Indoor air quality is protected.

Requirements

Products designed for permanent indoor use comply with leading standards that demonstrate low VOC emissions.

Products designed for permanent indoor use comply with leading standards that demonstrate very low to no VOC emissions.

Products designed for permanent indoor use are products that are installed or placed into a building and remain there (this includes furniture, but not cleaning products).

To demonstrate fulfillment of this requirement, an applicant must show compliance of the product with the requirements of at least one regional set of best practices for qualifying low VOC emission products.

Best practices are defined by the current versions of the leading green building certification systems or standards in a given region (such as BREEAM, DGNB, or LEED).

Product Circularity Requirements

Products are intentionally designed for their next use and are actively cycled in their intended cycling pathways.

Requirements Summary

To achieve a desired level within the category, the requirements at all lower levels must also be met.

Basic Level

A plan has been created to address challenges with the cycling infrastructure at the end of the product’s first use; potential cycling partners have been identified.

Select product and material types that contain cycled and/or renewable content.

Alternative: Limitations that prevent the achievement of this requirement are publicly reported.

≥ 50% of materials by weight are compatible with the intended cycling pathways (for example recyclable, compostable, or biodegradable).

Circularity data and cycling instructions are publicly available.

The percentage of cycled and/or renewable content, by weight, is equal to or higher than industry averages and/or is consistent with common practice. Alternative: Limitations that prevent the achievement of this requirement are publicly reported.

Half-Emerald

Partnerships for the cycling (recovery and processing) of the product have been initiated. If the product is intended for cycling via municipal systems, materials are compatible with those systems.

≥ 70% of materials by weight are compatible with the intended cycling pathway(s) (for example recyclable, compostable, or biodegradable).

A strategy for improving product circularity is developed including plans for:

• Increasing the amount of post-consumer recycled content and/or responsibly sourced renewable material, as relevant to the product type;
• Implementing a circular opportunity or innovation;
• Improving the product’s design for disassembly;

Almost Sapphire
Percentage of cycled and/or renewable content, by weight, is consistent with values achieved by industry leaders for the product type.

Alternative: Limitations that prevent the achievement of this requirement are publicly reported.

≥ 90% of materials by weight are compatible with the intended cycling pathways and support high-value cycling. This means that the materials are of high quality and are likely to retain their value for subsequent use. Parts containing these materials are designed for easy disassembly.

Increased use of post-consumer and/or responsibly sourced renewable material as relevant to the product type. Alternative: Limitations that prevent increased use are publicly reported.

A circular opportunity or innovation that increases product circularity.

Green Diamond

At least two intended cycling pathways are defined for the product and its materials.

The percentage of cycled and/or renewable content, by weight, has reached the technically feasible maximum.

≥ 99% of materials by weight are compatible with the intended cycling pathways.

The product is actively cycled in an amount consistent with the product’s use phase (the shorter the use phase, the higher the minimum percentage required) and a program is implemented to increase the cycling rate or quality of the product’s materials after use.

Cycling rates and quality are monitored over time, and an increase in cumulative cycling rate or quality is demonstrated.

Circularity Education

The applicant has increased scope of knowledge regarding the circularity potential of their product and has identified opportunities and solutions for overcoming barriers to actively cycling their product via biological and/or technical pathways.

Requirements

Participate in a circularity education initiative to obtain practical knowledge about developing or improving upon the infrastructure needed for the product to be part of a circular system.

The circularity education initiative must be led by:

1. A company or organization other than the applicant company, and focused on developing the circular economy, or

2. The applicant company, and be a collaborative platform that involves other companies or organizations.

The initiative must:

1. Support learnings toward implementing the company’s circularity strategies and cycling infrastructure.

2. Aim to drive progress within an industry or across multiple industries.

3. Ensure that the initiative allows for an adequate voice for all participants.

The applicant company must have actively participated in an initiative within the last two years prior to certification or recertification.

Defining the Product’s Technical and/or Biological Cycles

The applicant has designated all homogeneous materials in the product as either biological or technical and has identified appropriate cycling pathways for those materials once the product has reached the end of its current use cycle.

Requirements

1. Designate all homogeneous materials in the product as being intended for technical and/or biological cycles and define the intended cycling pathways for each material. For materials designated for technical cycles, recycling must be one intended cycling pathway.

Define at least two intended cycling pathway(s) for each homogeneous material in the product.

The following homogeneous materials must be designated for the biological cycle:

• Materials designed to be released directly to the biosphere as part of their intended use or cycling pathway (for example liquid cleaning products, soaps, perfume, toilet paper);
• Biological or biologically derived materials commonly released to the biosphere (for example paper);
• Coatings, finishes, or liquids are applied to materials intended for biological cycles.

Preparing for Active Cycling

The applicant has taken demonstrable steps toward addressing any barriers to material recovery and processing in order to actively cycle those materials for their next use.

Requirements

1. Develop a cycling plan to address challenges inhibiting the development of the cycling infrastructure for the product at the end of its first use, and identify potential partners that are capable of recovering and processing the product. Report on the progress made toward achieving the plan at recertification.

2. Initiate partnerships for recovery and processing of the product according to its intended cycling pathways. If the product is intended for cycling via municipal systems, use materials that are compatible with those systems.

The cycling plan must include the following:

1. Discrete planned actions and an associated timeline.

2. Identification of potential partners or internal resources for product recovery and processing in accordance with the intended cycling pathways in countries and/or states that cumulatively cover a region accounting for 60% or more of product sales. Products intended to be cycled via municipal systems or addressed by regional/national product stewardship laws are exempt from this requirement.

3. For intermediate and wet-applied products, the plan must address challenges inhibiting the development of the cycling infrastructure for at least one finished product or applied substrate example application, respectively. Identification of potential partners is not required for these product types.

4. For products containing electronic components, the plan must address the recovery and recycling of intentionally used trace elements whose extraction is associated with risks of limited supply.

5. The applicant company or retail partner has initiated partnership(s) or dedicated internal resources for product recovery and processing. (Initiation of a partnership is defined as the applicant company having an active agreement or contract(s) with entities involved in the recovery and processing of the product for another use cycle.)

6. A product stewardship law or program for the particular product type is in place.

7. If intended for cycling via municipal systems, materials are a type that is commonly recycled or composted via curbside pickup, and the material is accepted by municipal recycling programs in the region(s) where the product is sold.

Increasing Demand: Incorporating Cycled and/or Renewable Content

Demand for circularly sourced materials is increased as a result of the increased use of cycled or renewable materials in the product, helping to close the loop and advance the circular economy. Negative impacts of virgin material use are also minimized.

Requirements

1. For select commonly cycled product and material types, incorporate a minimum percentage of cycled and/or renewable content into the product.

Alternatively, publicly disclose an explanation of the limitations preventing the achievement of the required minimums.

2. Incorporate a percentage of cycled and/or renewable content into the product equal to or greater than industry averages and/or consistent with common practice. Develop a plan for increasing the use of post-consumer recycled and/or responsibly sourced renewable content, and demonstrate progress toward achieving the plan at recertification.

Alternatively, publicly disclose an explanation of the limitations preventing the achievement of the required percentages.

3. Incorporate a percentage of cycled and/or renewable content into the product that is consistent with industry leaders for the product type. Depending on material type, incorporate either post-consumer recycled or responsibly sourced renewable content.

Alternatively, publicly disclose an explanation of the limitation(s) preventing the achievement of the required percentage(s).

4. Incorporate the maximal technically feasible percentage of cycled and/or renewable content into the product.

The following are required for multi-material products (products containing more than one homogeneous material), with one exception as noted below:

• At least 90% of the homogeneous materials by weight must meet the required minimum percentages of cycled or renewable content;
• At least 95% of the homogeneous materials by weight must meet the required minimum percentages of cycled or renewable content;

Exception:

For multi-material products where there is only one percentage listed per achievement level, the percentages provided are product-level percentages that may be met in a variety of ways, as long as the finished product overall achieves the required percentage of cycled or renewable content by weight.

In these cases, there are no minimum percentages required for individual materials in the product:

• For cycled content to count toward the required percentages, the amount of cycled content must be verified based on-chain of custody documentation;
• For biologically derived plastics and liquid formulations to count as renewable, the amount of bio-based content must be determined based on;
• Established standards that quantify bio-based content using radiocarbon dating;
• Chain of custody documentation;
• For biological and biologically derived materials associated with extensive evidence of ecosystem destruction due to land conversion and/or poor management practices (for example palm oil, wood, peat) to count as renewable, the material must be certified to a C2CPII-recognized responsible sourcing standard, or an alternative equivalent to certification must be in place, that requires;
• Compliance with all applicable laws and regulations of the country in which farming or harvesting operations occur;
• Operations that respect land rights and land use rights, and are unlikely to cause displacement of food production;
• Planning, monitoring, management, and continuous impact assessment for the farming and/or harvesting of material;
• Maintenance, conservation, or enhancement of biodiversity in the forest/vegetation or other ecosystems;
• Maintenance or enhancement of the productive function of the forest/vegetation or other ecosystem area and efficient use of harvested materials (for example rate of harvest does not exceed the rate of regrowth in the long term);
• Maintenance or enhancement of the health and vitality of the forest/vegetation or other ecosystem and its protective systems (soil and water);
• For commonly recycled biological and biologically derived materials, renewable content counts half as much as recycled content toward meeting the required cycled content percentages (e.g., if the percentage of cycled content required is 30%, then 60% renewable content OR 30% recycled content is required);

This requirement does not apply to biological fibers used in apparel (for biological fibers used in apparel, renewable content counts in the same way as recycled content toward meeting the required percentages).

Feasibility Analysis

A feasibility analysis may be applied as an alternative to meeting required percentages of cycled and/or renewable content in any case where an applicant is unable to meet the required percentages, including post-consumer recycled and responsibly sourced content as relevant. This alternative may be used for one or more materials in a product and at any achievement level.

The following are required:

1. An explanation of the limitation(s) preventing the incorporation of the target amount of cycled or renewable content (including post-consumer or responsibly sourced as relevant) and how, based on these limitation(s), the amount of cycled or renewable content currently used represents the maximum that is currently feasible.

2. The explanation must be reported publicly.

3. A strategy for addressing the identified limitation(s) and increasing the amount of cycled and/or renewable content (including post-consumer or responsibly sourced as relevant) over time must be developed. The strategy must include discrete objectives and an associated timeline.

For recertification:

• The applicant must demonstrate progress toward achieving the objectives;
• A description of progress made must be reported publicly;

For single-use plastic products and plastic packaging products (certified as separate products), excluding packaging that is part of a refill/reuse system, the following two limitations preventing the incorporation of the target amount of cycled or renewable content are accepted:

1. The product or package used in food contact applications and regulations applicable to the regions where the product is sold do not permit the use of recycled content.

2. Product or packaging performance specifications cannot be achieved when using the required percentages of cycled or renewable content.

For all other product types, including plastic packaging that is part of a reuse/refill system, other types of limitations (cost and availability) are accepted.

Material Compatibility for Technical and/or Biological Cycles

Product materials with the highest capacity for biological and/or technical cycling have been intentionally selected, increasing the likelihood that such materials will retain their value and move through subsequent cycles of use.

Requirements

1st. For 50% of the product by weight, incorporate materials that are compatible with

2nd For 70% of the product by weight, incorporate materials that are compatible with the intended cycling pathway(s).

3rd. For 90% of the product by weight, incorporate materials that are compatible with the intended cycling pathway(s) and have high-value technical or biological cycling potential.

4th. For 99% of the product by weight, incorporate materials that are compatible with the intended cycling pathway(s).

For a material to count toward the percentage of materials compatible with the intended cycling pathway(s) the following conditions must be met:

• Homogeneous materials that need to be separated in order to be cycled must be separable by the entity implementing the intended cycling pathway with given instructions and no additional special knowledge;
• For products that are installed prior to use (in a building, a vehicle, or fixed within a sidewalk), it must be possible to extract the product from the installed location;
• For products and materials intended for technical municipal cycling the product and/or material must be compatible with municipal cycling systems (painted plastics and plastic laminated paper are not currently compatible for municipal recycling);
• For solid materials intended for the biological cycle, one of the following conditions must be met:
• The material must biodegrade in the intended cycling pathway(s) within the time period and to the extent specified by a recognized compostability or biodegradability standard test;
• For paper and biological materials with ≥ 99% unmodified organic material:
  i. The material, at its maximum thickness and/or density, must disintegrate in the intended cycling pathway(s) within the time period and to the extent specified by a recognized compostability or biodegradability standard test;
  ii. If the intended cycling pathways include composting, a soil sample that is exposed to the material, after disintegration tests have been performed, must pass an ecotoxicity test demonstrating that the exposed soil sample is conducive to plant growth;
• For materials with unavoidable release to the environment during product use (tires, shoe soles, brake pads), the fraction of material that on average is likely to be released to the environment from the total product over its lifetime may not be counted as compatible with the intended cycling pathway, unless it is biodegradable in the likely environment where release occurs;
• For wet-applied products that are intended to be applied to materials with likely biological cycling pathways (e.g., paints intended to be applied to wood), one of the following conditions must be met:
• The wet-applied product must not typically comprise > 1% by weight of the base material(s) to which it is likely to be applied and the wet-applied product, in combination with the one likely base material, must meet the requirements for solid materials intended for biological cycling;
• The wet-applied product, in combination with one likely base material, must meet the requirements for solid materials intended for biological cycling;
• For products that are liquid formulations (excluding wet-applied products), individual substances within the formulation, or the formulation as a whole may be evaluated when determining the percentage compatible with the biological cycle.
  

When evaluating based on individual substance(s), the following conditions apply:

For organic chemicals and surfactants to count toward the percentage compatible, the substance must biodegrade in the intended cycling pathway(s) within the time period and extent specified by a recognized biodegradability standard test.

• Organic chemicals with a log Koc < 4.5 must meet the OECD definition for ultimate biodegradability (aerobic);
• Organic chemicals with a log Koc ≥ 1.5 must meet the OECD definition of anaerobic biodegradability;
• For inorganic chemicals, benign minerals may be counted toward the percentage compatible;
• Water weight is excluded from the calculation;

When evaluating the formulation as a whole, if one of the following requirements has been met the product counts as 100% compatible with the biological cycle:

1. The formulation has demonstrated ready biodegradability in both anaerobic and aerobic
   conditions as demonstrated by a recognized biodegradability standard test. (The formulation may also contain benign mineral nutrients.)
2. For consumable consumer products (e.g., shampoo, detergents), the material must
   biodegrade in the intended cycling pathway(s) within the time period and to the extent
   specified by a recognized biodegradability standard test.

Circularity Data and Cycling Instructions

Circularity information for proper end-of-use handling of the product is publicly available, increasing the likelihood that the product’s materials will be actively recovered and processed for the next cycle of use.

Make data to support cycling of the product in its intended pathway(s) and instructions for how to cycle the product publicly available.

When applicable, the applicant must make instructions for how to cycle the product publicly available. The instructions must include how to identify the materials for cycling, any required product maintenance, and how to recover, reprocess, or recycle the product.

Circular Design Opportunities and Innovation

The product is designed in a way that creates more end-of-use cycling opportunities.

Requirements

Develop a plan for implementing a circular design opportunity or innovation that increases product circularity; demonstrate progress toward achieving the plan at recertification.

Implement a circular design opportunity or innovation.

Circular design opportunities and innovations receiving credit are those that are commonly known and/or can be demonstrated to contribute to one or more of the following:

1. Increased end-of-use cycling
2. Greater engagement with users for end-of-use cycling
3. Prolonged use of the product
4. Decreased need to extract and produce virgin materials

For intermediate and wet-applied products, the applicant company must communicate how to implement the circular design opportunity to the finished product manufacturer(s) or the customers of the wet-applied material, respectively.

Product Designed for Disassembly

The product may be easily disassembled into discrete materials compatible with its intended cycling pathway(s) making it more likely that a large percentage of the materials in the product will be cycled.

Requirements

For products with multiple materials requiring separation for cycling in the intended pathway, develop a plan for increasing the ease of product disassembly into discrete materials for the intended cycling pathway(s).

For products with multiple materials requiring separation for cycling in the intended pathway, and for 90% of materials by weight, intentionally design the product for ease of disassembly.

For products with multiple materials requiring separation for cycling in the intended pathway, and for 99% of materials by weight, intentionally design the product for ease of disassembly.

The plan for increasing the ease of product disassembly must include at least one of the design or communication elements required.

The following design and communications elements define “ease of disassembly” and are required as applicable for materials by weight:

The product includes at least one design feature that improves the ease of disassembly compared to a commonly or previously used alternative product.

Processes that result in the loss of specific materials in the product in order to recover other materials (burning plastics to recover metals) must be avoided.

If disassembly operations are conducted by an entity other than the applicant company, comprehensive disassembly instructions must be publicly available and accessible to the parties involved in disassembly.

If disassembly operations are conducted by the general public, components must be separable using common tools (e.g., hammer, screwdriver, pliers) with minimal technical experience and instruction.

For products with ≥ 30 homogeneous materials and/or if disassembly is performed by an entity other than the product user, the disassembly process:

• Must be at least semi-automated
• Can occur in a reliably consistent manner with clear instructions (e.g., via a Standard Operating Procedure, or another standardized process for training those who are disassembling the product).

The design and communications elements above are required as applicable for ≥ 99% of materials by weight.

Active Cycling

The product’s materials are actively being recovered and processed for their next use via the intended cycles and/or the product manufacturer is demonstrably invested in a program that will lead to higher product and material cycling rates and/or a higher quality of materials available for cycling.

For select single-use plastic products and single-use plastic packaging (when certified as a separate product), actively cycle ≥ 50% of the product’s materials and implement a program to increase the cycling rate or quality of the product for its next use.

For other short-use phase products, actively cycle at least some (> 0%) of the product’s materials and implement a program to increase the cycling rate or quality of the product for its next use.

For long-use phase products, actively cycle at least some (> 0%) of the product’s materials or implement a program to increase the cycling rate or quality of the product for its next use.

For long-use phase products, actively cycle the product’s materials and implement a program to increase the cycling rate or quality of the product for its next use.

Monitor cycling rates and quality over time, and demonstrate an increase in either cumulative cycling rate or quality.

Actively cycle a minimum percentage of the product’s materials based on the duration of the product’s use phase.

Active cycling includes both recovery and processing of the product’s materials for their next use

Single-use plastic products and single-use plastic packaging required to achieve ≥ 50% active cycling are eligible product and packaging types that are subject to extended producer responsibility regulations and/or regulatory measures intended to reduce use.

This includes Beverage cups including covers and lids, beverage bottles, take-out or immediate consumption food containers, packets and wrappers made from flexible materials used to contain food that is intended for immediate consumption, wet wipes, and balloons.

Exception:

If the plastic material within the product is made from responsibly sourced renewable material and it is demonstrated to readily biodegrade in all relevant environmental compartments where there is potential for release and disposition (soil, freshwater including wetlands, marine water including surface and deep water conditions), the active cycling rate for other short-use phase products may be applied (> 0%).

If demonstrating an increase in cumulative cycling rate, the increase must be via one or more intended cycling pathway(s).

The minimum required percentage of the actively cycled product is a function of the product’s use phase duration or the average use phase duration for the product type (the shorter the use phase the higher the minimum percentage required).

This minimum required percentage is calculated as follows:

where L is the product use phase time (in years) or the average use phase time for the product type (in years). If using the use phase time for the product, lifetime warranties may not be used for its derivation.

Exemptions:

Intermediate products and liquid formulations are exempt from all requirements in this section.

Clean Air & Climate Protection Requirements

Product manufacturing results in a positive impact on air quality, the renewable energy supply, and the balance of climate-changing greenhouse gasses.

Depending on the achievement level, the “targets” may apply to renewable electricity procurement or on-site production and use, performance improvements (emissions intensity reductions), absolute emissions reductions, use of eligible bioenergy sources, purchase of carbon offsets, and/or financial donations or investments.

Air Emissions Compliance

The final manufacturing stage facilities where the product is manufactured are in compliance with regulatory and/or industry best practice air emissions limitations.

Requirements

Final manufacturing stage facilities comply with air emissions regulations or guidelines.

Facilities must comply with the corresponding regional regulatory (if any), international, or industry best practice air emissions guidelines.

Compliance with all applicable laws and regulations, including compliance with regional regulatory air emissions limitations, is required as a baseline.

For final manufacturing stage facilities meeting this requirement based on regulatory compliance, the parameters addressed in the permit must also be consistent with leading regulations, international guidelines, or industry best practices.

Leading regulations are defined as those that include a functioning mechanism through which ambient air quality-based limits are set (i.e., assessment of the existing ambient air quality is used to inform and set the permitted limits with the goal of maintaining high-quality standards).

Quantifying Electricity Use and Greenhouse Gas Emissions

Electricity use and greenhouse gas emissions associated with final manufacturing and the product’s embodied greenhouse gas emissions have been quantified and verified, creating a baseline against which reductions can be measured, and helping to identify areas for improvement.

Requirements

Quantify annual electricity use and greenhouse gas emissions associated with the final manufacturing stage of the product.

For construction products and building materials used to construct primary building elements (products for which life cycle assessment is common practice), quantify the embodied greenhouse gas emissions associated with the product from resource extraction through final manufacturing or end of use.

For construction products and building materials used to construct primary building elements (products for which life cycle assessment is common practice), conduct a third-party critical review and produce an Environmental Product Declaration (EPD).

For other product types, quantify the embodied greenhouse gas emissions associated with the product from resource extraction through final manufacturing or end of use and, if self-reported, conduct an internal review.

For all product types, conduct a third-party critical review of the quantification of embodied greenhouse gas emissions associated with the product from resource extraction through the end of use and produce an Environmental Product Declaration.

Report electricity in terms of kWh or equivalent and the resulting greenhouse gas emissions in terms of CO2e.

Report greenhouse gas emissions from all other sources (direct emissions from burning fuels, including biofuels) in terms of CO2e.

The methods employed must follow a recognized greenhouse gas accounting methodology (the Greenhouse Gas Protocol or others listed by CDP).

The methods employed to quantify embodied emissions must follow ISO 14040 and ISO 14044 (Environmental management – Life cycle assessment – Principles and framework and – Requirements and guidelines) or other standards or guidance based on ISO 14040 and ISO 14044 (the Greenhouse Gas Protocol Product Life Cycle and Accounting Standard). If available, product category rules must be followed.

Environmental Product Declarations (EPDs) must conform to ISO 14025 and EN 15804 or ISO 21930.

Primary building elements are defined as:

1. The structural frame, including beams, columns, and slabs,
2. External walls, cladding, and insulation,
3. Floors and ceilings,
4. External walls,
5. Internal walls,
6. Windows,
7. Roofs,
8. Foundations and substructures.

For product types where a third-party critical review is not required (all products except construction products and building materials), if embodied emissions were quantified by a qualified third party, an internal review is not required. If embodied emissions were quantified by the applicant company, third-party verification may be requested by Nexity Network should the application audit surface concerns about whether the data are complete or accurate.

Clean Air & Climate Protection Strategy

Clean air and climate protection strategy that includes targets aligned with international climate science and goals are established, providing a pathway for increasing the amount of renewable energy used to manufacture the product and reducing or offsetting greenhouse gas emissions during the product manufacturing process.

Requirements

Develop a Clean Air & Climate Protection strategy and report on progress made toward achieving the strategy at each recertification.

The strategy must include the following:

Quantitative targets for increasing renewable electricity use and/or procurement and addressing greenhouse gas emissions:

Using Renewable Electricity and Addressing Greenhouse Gas Emissions in Final Manufacturing.

Depending on achievement level and methods used, applicants are:

• Employing efficiency and conservation measures to reduce energy use and greenhouse gas emissions;
• Signaling demand for renewable energy;
• Supporting carbon offset projects that go beyond business as usual;
• Avoiding the use of fuels that may contribute to reduced food security, conversion of forested;
• Other natural areas to cropland, and/or cause a near-term increase in atmospheric carbon dioxide,
• Producing renewable electricity in excess and releasing it to the grid for all to use
• Positively impacting the balance of climate-changing greenhouse gasses attributable to the final manufacturing stage of the product (i.e., more are offset than are generated).

For the final manufacturing stage of the product, procure or produce renewable electricity and/or address greenhouse gas emissions, achieving 5% target(s)* for electricity and other greenhouse gas emissions sources.

For the final manufacturing stage of the product, procure or produce renewable electricity and/ or address greenhouse gas emissions, achieving 20% target(s)* for electricity and other greenhouse gas emissions sources.

For the final manufacturing stage of the product, procure or produce renewable electricity and/ or address greenhouse gas emissions, achieving 50% target(s)* for electricity and other greenhouse gas emissions sources.

For the final manufacturing stage of the product, procure or produce renewable electricity and/or address greenhouse gas emissions, achieving > 100% target(s)* for electricity and other greenhouse gas emissions sources.

Renewable Electricity and Greenhouse Gas Emissions Targets

There are separate targets applicable to (1) electricity, including purchased electricity and on-site renewable electricity, and (2) greenhouse gas emissions from another scope 1 and 2 sources.

One or more of the methods listed below may be applied toward achieving the targets. For example, if the renewable electricity target for a given achievement level has been partially met, then one or more of the other listed methods may be used to achieve the remainder of the target. See the supplementary sub-sections below for additional requirements pertaining to the accepted methods.

The targets below apply to the final manufacturing stage of the product unless otherwise noted.

For electricity (including purchased electricity resulting in scope 2 emissions and on-site renewable electricity):

• Procure or produce renewable electricity to match 5% of the electricity used (Note: Renewable electricity that is part of a utility’s default offer receives credit only if there is no voluntary renewable electricity market in the applicable market region).
• Provide financial support to a climate-relevant public policy initiative (must be valued at 2x the cost of purchasing renewable electricity attribute certificates or other voluntary purchase matching 5% of the electricity used).
• Purchase carbon offsets to compensate for 5% of the resulting greenhouse gas emissions.
• Improve performance by 5% (i.e., reduce electricity use intensity and/or the associated greenhouse gas emissions intensity by 5%).

For all other greenhouse gas emissions sources (including all scope 1/direct and other scopes 2 indirect emissions):

Use eligible sources of bioenergy, achieving the bioenergy credit for 5% of total greenhouse gas emissions.

Purchase carbon offsets to compensate for 5% of the resulting greenhouse gas emissions.

Invest in on-site emissions reductions projects (must be of an equivalent value to carbon offsets compensating for 5% of emissions

Improve performance by 5% (i.e., reduce greenhouse gas emissions intensity by 5%).

Procure or produce renewable electricity to match 20% of the electricity used (Note: Renewable electricity that is part of a utility’s default offer receives credit only if there is no voluntary renewable electricity market in the applicable market region).

Meeting the Renewable Electricity Targets

Renewable electricity may be:

• Produced on-site,
• Procured from a utility or other provider (e.g., through a utility’s optional green power offering, or through direct power purchase agreements), and/or
• Procured via unbundled renewable energy attribute certificates that support new (≤15 years) renewable electricity installations (e.g., Renewable Energy Certificates (RECs) or Guarantees of Origin (GOs)). Note: “Unbundled” refers to renewable energy attributes that are sold separately from the renewable electricity itself.

The electricity must be from one or more of the following sources:

• Wind,
• Geothermal,
• Non-impoundment hydropower, or hydropower certified to a C2CPII-recognized renewable
  (hydro) electricity standard, or
• Eligible biofuels (see Accounting for Bioenergy and Applying the Bioenergy Credit section
  below).

Other renewable sources (e.g., wave and tidal energy) will be evaluated on a case-by-case basis.

1. Renewable electricity that is part of a utility’s default offer may receive credit toward achieving the renewable electricity targets only if there is no voluntary renewable electricity market in the applicable market region. (Note: An alternative option, including for cases where there is a voluntary renewable electricity market, is to convert the amount of purchased electricity to greenhouse gas emissions and to meet the offset target instead – which does give credit for using renewable electricity present on the grid through that electricity’s effect on the emissions rate.
2. Double counting of renewable energy attributes must not occur.

• Renewable energy attribute certificates must be retained by the applicant or canceled on the applicant’s behalf in all cases.
• If procuring unbundled renewable energy attribute certificates outside of a regulated tracking system that controls for double counting, a qualified third party must verify that double counting has not occurred.

1. The generation or consumption of renewable electricity may not be used to meet any regulatory requirements.

Meeting the Carbon Offset Targets

Carbon offsets may be used to address both direct and indirect greenhouse gas emissions. For example, this includes emissions produced on-site from burning fuels and emissions resulting from the generation of purchased electricity or steam off-site.

Exception:

Carbon offsets may not be used to address emissions attributable to purchased electricity in countries where the nuclear power share is > 10%. to claim and apply carbon offsets toward the offset target(s), the following conditions must be met:

Offsets must be sourced from projects certified to a C2CPII-recognized offset project certification program that aims to ensure that:

• The associated greenhouse gas reductions or removals are additional, accurately estimated, permanent, and not double-counted;
• Offset projects operate in compliance with local laws;

The offsets must be purchased voluntarily (and not for compliance purposes).

If using carbon offsets to address emissions attributable to the use of purchased electricity. Emissions attributable to the purchased electricity must be calculated using residual emissions factors if available, or grid average emissions factors if not.

Accounting for Bioenergy and Achieving the Bioenergy Credit

If bioenergy is produced on-site (including the use of biofuels), the greenhouse gas emissions attributable to the bioenergy must be added to the total CO2e subject to the offset targets.

If the bioenergy is produced from eligible fuels, the bioenergy credit may also be subtracted from the amount of offsets required to reach a given target. The bioenergy credit = (the carbon dioxide combustion emissions of the eligible biofuel) x (the bioenergy credit multiplier for the eligible fuel source type). In addition to receiving the bioenergy emissions credit for the use of eligible biofuels, electric bioenergy produced on-site from these fuels may also be counted toward the renewable electricity target.

The bioenergy credit multipliers by eligible fuel source type are as follows (see the Definitions section for a description of the approach used to define these multipliers):

Agricultural crop residue that is unmerchantable as food and other similar rapidly renewable waste material: 0.63

Animal and other organic waste (food scraps), landfill gas, and wastewater methane: 1

Woody waste: 0.57

To receive the bioenergy credit, the applicant must retain all rights to the environmental attributes associated with the bioenergy. Emissions reduction attributes may not be sold, registered or claimed by others.

Achieving the Performance Improvement Credit

The renewable electricity and/or greenhouse gas emissions targets may be reduced when performance improvement(s) resulting from energy conservation and efficiency projects have been demonstrated and verified by a qualified third party. The performance improvement credit may be applied to (1) purchased electricity in terms of kWh or equivalent and direct emissions separately, or (2) combined scope 1 and 2 emissions.

In general, the renewable electricity and offset targets may be reduced by one percentage point for each percent of normalized performance improvement achieved, within the following limits:

The 5% renewable electricity and/or greenhouse gas emissions targets may be reduced by up to five percentage points (100% of the targets). If performance improvement(s) of 5% has been achieved, renewable electricity, carbon offsets, and/or other methods of achieving the targets are not required.

The 20% renewable electricity and/or greenhouse gas emissions targets may be reduced by up to 10 percentage points (50% of the targets). If the maximum performance improvement credit of 10% has been achieved, only 10% of electricity must be from renewable sources, and only 10% of greenhouse gas emissions must be offset or addressed via the other allowable methods.

Alternative: If, for the applicant company, absolute emissions reductions are achieved in line with the Science-Based Targets Initiative’s (SBTI) well below 2°C or 1.5°C scenarios, the 20% renewable electricity and/or offset targets may be reduced by up to 20 percentage points (100% of the targets).

Targets must be verified by SBTI and absolute reductions in line with the targets must be realized over the prior certification period. In this case, if performance improvement(s) of 20% or more has been achieved, renewable electricity, carbon offsets, and/or other methods of achieving the targets are not required.

The 50% renewable electricity and/or greenhouse gas emissions targets may
be reduced by up to 12.5 percentage points (25% of the targets). If the maximum performance improvement credit of 12.5% has been achieved, only 37.5% of electricity must be from renewable sources, and only 37.5% of greenhouse gas emissions must be offset or addressed via the other allowable methods.

The performance improvement credit may be applied when all of the following conditions are met:

1. Performance improvement is achieved at a facility that is part of the product’s final manufacturing stage.
2. The product is allocated a share of overall facility energy use and emissions proportional to its share in the facility’s overall production. (This is required prior to determining the number of carbon offsets and/or renewable electricity necessary to meet the remainder of the target(s)).
3. Performance improvements are determined using a baseline year of no more than 10 years prior to certification or recertification (as applicable).
4. Performance improvements from baseline to reporting year must be determined and normalized per an approved method and verified by a qualified third party with expertise in energy performance measurement and verification.

The International Performance Measurement and Verification Protocol (IPMVP), Method C (i.e., the whole facility method), or similar methods based on ISO 50015 and ISO 50047, are accepted.

1. The verifier must report performance improvement(s) in the appropriate quantities depending on how the remainder of the targets will be met as follows:

• Performance improvement must be reported separately for electricity and all other greenhouse gas emissions sources (required if meeting renewable electricity and greenhouse gas emissions targets separately);
• Total performance improvement for all energy sources combined must be converted to and reported as a percentage of CO2e savings achieved (i.e., avoided emissions);

1. The reporting year for the performance improvement verification report must be within one year of the certification issue date. Verification must be repeated upon each recertification.
2. The applicant must retain all rights to the environmental attributes associated with the performance improvement.
   

Transparency

Greenhouse gas emissions data are available to stakeholders, demonstrating the manufacturer’s commitment to protecting the climate.

Requirements

Make greenhouse gas emissions data for the applicant company, all final manufacturing stage facilities, or the final manufacturing stage of the product available to stakeholders.

Make embodied greenhouse gas emissions data for the product available to stakeholders. For construction products and building materials used to construct primary building elements (product types for which life cycle assessment is common practice), make an Environmental Product Declaration available.

Addressing Embodied Greenhouse Gas Emissions

Offsetting or reducing embodied GHG emissions has demonstrably decreased the proportion of climate-changing greenhouse gasses attributable to the manufacturing of the product.

Offset or otherwise address 25% of embodied greenhouse gas emissions attributable to the product from resource extraction through final manufacturing or through the end of use.

Offset or otherwise address 100% of embodied greenhouse gas emissions attributable to the product from resource extraction through final manufacturing or through the end of use.

At a minimum, a cradle-to-gate scope including emissions attributable to the final manufacturing stage must be employed.

Embodied greenhouse gas emissions may be addressed through a variety of methods, including but not limited to, the purchase of carbon offsets, projects with suppliers, product redesign, and savings during the use phase.

Reduction in embodied greenhouse gas emissions per functional unit receives credit when compared to a baseline of no more than 10 years prior to certification or recertification (as applicable).

Above-average performance (lower embodied emissions per functional unit) receives credit when compared to an industry-wide third-party verified benchmark, if available. An industry-wide generic EPD published in the past five years may be used as the benchmark. Otherwise, the performance of a sample of similar products may be used for comparison.

Qualified third-party verification of the percentage addressed is required if meeting the targets through methods other than offset purchase.

Characterizing Local and Product Relevant Water & Soil Issues

Through the assessment and understanding of water- and soil-related impacts attributable to the product, including local water availability and quality issues relevant to the product’s manufacturing facilities, opportunities to address the impacts are identified.

Characterize local and product-relevant water and soil issues.

For all final manufacturing stage facilities:

Determine the basin/catchment/watershed name.

Identify risks to water quantity (including baseline water stress) and water quality, and risk of unimproved or no access to drinking water and sanitation as defined by the most recent version of the World Resources Institute Aqueduct database or equivalent.

If a catchment level plan is available, obtain, review, and determine how the plan is relevant to the site. This must include a determination of whether a groundwater abstraction cap (a regulatory limit on total withdrawals) based on water resource availability has been set, and if so, the cap’s relevance to the site.

Describe effluent and sludge treatment process(es).

If third-party treatment facilities are employed, identify the provider(s) and describe any issues with their ability to adequately treat effluent received from the facility.

Identify any known issues with source and/or receiving water contamination or high concentrations of naturally occurring hazardous substances.

Describe any known issues with soil contamination, erosion, or other types of degradation at the site.

Determine if the facility is potentially impacting any sensitive ecosystems, protected areas, or similar.

For the product: Identify the use cycle stage(s) (also commonly referred to as “life cycle” stages) responsible for the majority of water quantity and quality-related impacts. Describe the impacts of concern.

For facilities of tier 1 suppliers using high volume or pollutant intense processes to produce key materials that makeup≥ 25% of the product by weight or by cost, or for all tier 1 suppliers:

1. Determine the basin/catchment/watershed name.
2. Identify risks to water quantity (including baseline water stress) and water quality, and risk of unimproved or no access to drinking water and sanitation as defined by the most recent version of the World Resources Institute Aqueduct database or equivalent.

Key Materials

The key materials in scope for the Water & Soil Stewardship requirements must be determined at the generic material level (e.g., if several aluminum parts are used, the total weight of aluminum applies). If there are no key materials present at ≥ 25% when aggregated by generic material type, but the sum of all key materials is ≥ 25%, the requirements for key materials must be applied to the key materials representing the highest weight or cost fractions of the product until < 25% of the product includes key materials to which the requirements have not been applied. If the 25% threshold is met when using only weight or only cost, then the metric that results in meeting the 25% threshold must be used.

Alternative: Water and soil conservation (quantity and quality) impact hot spots, identified based on conducting a life cycle assessment per ISO 14040, may be used instead of key materials that make up ≥ 25% of the product by weight or by cost for all Water & Soil Stewardship requirements applying to key materials. The assessment must be verified by a qualified third party.

Effluent Quality Compliance

The final manufacturing stage and select supplier facilities are in compliance with regulatory and/or industry best practice effluent limitations.

For the final manufacturing stage, treat effluent (either on or off-site) prior to discharge to the environment and adhere to effluent quality regulations or guidelines.

For select tier 1 supplier facilities, treat effluent (either on or off-site) prior to discharge to the environment and adhere to effluent quality regulations or guidelines.

Facilities discharging effluent directly to surface or groundwater must comply with the corresponding regional regulatory (if any), international, or industry best practice effluent quality guidelines for direct discharge.

For final manufacturing stage facilities meeting this requirement based on regulatory compliance, the parameters addressed in the permit must also be consistent with leading regulations, international guidelines, or industry best practices. Leading regulations are defined as those that include a functioning mechanism through which water quality-based limits are set.

Final manufacturing stage facilities discharging process effluent to an off-site, independently operated effluent treatment facility (publicly owned treatment works, central effluent treatment plant, or wastewater treatment plant) with at least secondary treatment must:

1. Comply with required pretreatment limits, if any, and
2. Demonstrate that the treatment facility is treating the effluent received to quality standards in line with the corresponding regional regulatory (if any) or international guidelines
3. Comply with regional regulatory (if any), international, or industry best practice effluent quality guidelines for direct discharge.

Select tier 1 supplier facilities discharging process effluent to an off-site, independently operated effluent treatment facility (e.g., publicly owned treatment works, central effluent treatment plant, or wastewater treatment plant) with at least secondary treatment must comply with required pretreatment limits if any.

Effluent testing

When effluent must be tested for verification purposes, sampling and testing must be conducted according to the methods specified by regulatory permits, the off-site, independently operated effluent treatment facility, and/or other guidelines as relevant. The analytical laboratory conducting the tests must be accredited or certified for the specific analysis per ISO 17025, NALEP, or equivalent.

Quantifying Water Use

Water withdrawals, discharge, and consumption at facilities manufacturing the product(s) are quantified, creating a baseline against which reductions can be measured, and helping to identify areas for improvement.

Quantify annual water withdrawals, discharge, and consumption for all final manufacturing stage facilities.

Data must be collected on the following and the data sources indicated:

1. Withdrawals by source and water type,
2. Discharges by receiving body/destination,
3. The capacity of on-site treatment equipment,
4. Consumption by source,
5. Total amount and percentage of water recycled and reused.
6. Facilities that withdraw or purchase ≥ 100,000 m3 of water per year are considered as having high-
   volume processes.

Providing Drinking Water, Sanitation, and Hygiene

Access to drinking water, sanitation, and hygiene is treated as a basic requirement at the facilities where the product is manufactured.

Provide potable drinking water, adequate sanitation, and hygiene to all workers at all final manufacturing stage facilities.

The following conditions must be met:

Potable water must be dispensed using a clean and accessible method.

An adequate number of toilets per employee must be provided as required by local regulations or international guidelines if local regulations do not exist. The applicant must ensure that sewered and/or portable toilets:

• Provide privacy at all times (i.e., may be locked from the inside).
• Are separate for each gender. Alternatively, toilet facilities will not be occupied by more than
  one employee at a time can be locked from the inside, and contain at least one toilet.
• If portable toilets are provided, they must be vented and equipped with lighting.

Handwashing facilities must be located at or adjacent to each toilet facility and must be equipped with one of the following:

• Running water and soap.
• Waterless skin-cleansing agents capable of disinfecting the skin or neutralizing the
  contaminants to which the employee may be exposed.
  

A sanitary method of drying hands after washing must be provided.

The applicant must establish and implement a maintenance and cleaning schedule with the goal of ensuring that each toilet and handwashing area is maintained in a clean, sanitary, and serviceable condition (including the provision of toilet paper or other hygienic options).

Reasonable access to drinking water, sanitation, and hygiene facilities must be provided (i.e., either freely accessible at any time as needed by employees or, at a minimum, readily available upon request).

Water & Soil Stewardship Strategy

A water and soil stewardship strategy is developed, providing an actionable pathway toward operating in a manner that protects water and soil resources.
Requirements

Near-term (defined as 0-2 years) and mid-term (defined as 2-20 years) targets.

Proposed activities and method(s) for reaching each target.

The base year(s) and target year(s) must be indicated.

A report of progress made toward meeting the targets that were set at the last certification including percent reductions in use and increases in percent recycling achieved (not applicable for initial certification).

All strategies must include specific goal(s) and associated timelines for implementation.

Water & Soil Conservation

Conservation technologies and best practices are increasingly being implemented to reduce water use and/or improve effluent and/or soil quality where there are known issues.

Implement at least one conservation technology or best practice at all final manufacturing stage facilities with high volume processes in stressed locations and/or with pollutant intense processes, and take at least one additional action to conserve water and/or soil at final manufacturing stage facilities or in the supply chain.

Implement conservation technologies or best practices at all final manufacturing stage facilities with high volume or pollutant intense processes, and/or in stressed locations.

For key materials that make up ≥ 25% of the product by weight or by cost, take action to conserve water and/or soil in the supply chain.

For final manufacturing stage facilities with high volume processes in a medium to high-stress locations, at least one technology or best practice leading to water use reductions must be implemented.

For the final manufacturing stage facilities with pollutant intense processes, at least one technology or best practice leading to improved effluent quality must be implemented.

For the final manufacturing stage facilities with high volume processes in a medium to high-stress locations, technologies or best practices leading to the maximum feasible water use reductions must be implemented.

For final manufacturing stage facilities with high volume processes in low-stress locations, at least one technology or best practice leading to water use reductions must be implemented.

For final manufacturing stage facilities in high-stress locations without high volume processes, at least one technology or best practice leading to water use reductions must be implemented.

For the final manufacturing stage facilities with pollutant-intensive processes, technologies or best practices leading to the maximum feasible improvement in effluent quality must be implemented.

For key materials that make up ≥ 25% of the product by weight or by cost:

Alternatively, the following are required:

An explanation of the limitation(s) preventing the incorporation of the required percentages of certified material and how, based on these limitations), the amount of certified material currently used represents the maximum that is currently feasible.

The explanation must be reported publicly.

A strategy for addressing the identified limitation(s) and increasing the amount of certified
material over time must be developed. The strategy must include discrete objectives and an associated timelines.

For recertification:

The applicant must demonstrate progress toward achieving the objectives.

A description of progress made must be reported publicly.

For other material types:

• A recognized certification or alternative that addresses the processes of concern must be in place
• The applicant must be actively involved with a multi-stakeholder group working to address the processes of concern
• The applicant must work directly with suppliers of key materials to implement the Water and Soil Stewardship requirements

Alternative for Key Materials: Working with Suppliers to Implement Water and Soil Stewardship Requirements

The following receive credit as an alternative to using certified materials, implementing alternatives, or working with a multi-stakeholder working group to address water- and soil-related issues of concern.

Suppliers of key materials must fulfill the following requirements:

Local and Product Relevant Water and Soil Issues must be characterized.

For supplier facilities producing key materials associated with high volume processes and located in medium to high-stress locations: At least one technology or best practice leading to water use reductions must be implemented.

For supplier facilities producing key materials associated with pollutant intense processes:

The Effluent Quality Compliance requirements must be fulfilled.

At least one technology or best practice leading to improved water and/or soil quality must be implemented.

Define and assess product-relevant process chemicals entering effluent or sludge during the final manufacturing stage and develop a strategy for optimization.

Ensure that any product-relevant chemicals (including product-relevant process chemicals) are released with effluent or sludge during the final manufacturing stage.

Define and assess all product-relevant chemicals entering effluent or sludge during the final manufacturing stage and at select supplier facilities.

Product-relevant chemicals are defined as intentional product inputs and process chemicals (including single chemicals and chemical mixtures, as well as known contaminants) used to manufacture the product. (Note: Process chemicals are further defined in the Definitions section).

All product-relevant chemicals that enter or potentially enter the effluent are in scope.

If applicable, restriction thresholds apply to the chemical mixtures as received from the supplier.

For process chemical formulations, all substances present at 1000 ppm (0.1%) or above within the formulation are subject to review. Substances may be gray-rated due to missing toxicity information and otherwise must have received an abc-x rating.

Conditions:

Tier 1 suppliers to the final manufacturing stage and suppliers that carry out pollutant intense processes associated with the following material types regardless of tier: leather, metal finishes, pulp and paper, and textiles.

Suppliers that produce key materials using pollutant intense processes for materials that make up ≥ 25% of the product by weight or by cost.

Transparency

Water use and effluent quality data for final manufacturing stage facilities are available to stakeholders, demonstrating the manufacturer’s commitment to water stewardship.

Make water use data for final manufacturing stage facilities available to stakeholders.

Make effluent quality data for the final manufacturing stage facilities available to stakeholders.

The data must include:

Withdrawals by source and stress level, consumption, and discharge by the level of treatment and destination.

Effluent quality test reports as required for verification of the Effluent Quality

Positive Impact

Water and/or soil quality, water quantity, or the health of aquatic and/or soil ecosystems within the catchment(s) where the manufacturer, employees, customers, and/or suppliers are located is improved through initiation or participation in a collaborative project.

Requirements

Implement a project that will positively impact local and/or product-relevant water or soil issues.

Demonstrate the impact of the positive impact project using quantitative metric(s).

The project must:

Reach beyond the final manufacturing stage facility and into the value chain and/or local community and aim to positively impact aquatic and/or soil ecosystems, local communities, water and/or soil quality and/or water quantity within the catchment(s) where the manufacturer, employees, customers, and/or suppliers are located.

Include direct involvement by company employees and/or senior management.

Address one or more of the issues identified in the Characterize Local and Product Relevant Water and Soil Issues requirement or otherwise be material to the applicant company.

Optimizing Effluent and Sludge Quality at the Facility Level

For the final manufacturing stage facilities:

• Establish a comprehensive effluent and sludge quality management system, and
• Optimize the effluent and sludge produced as a result of all manufacturing processes used at the
  facility.  
  

The following are in scope:

Effluent and sludge are produced as a result of all manufacturing processes at the facility.

Non-manufacturing effluent and sludge (from water used in toilets, and kitchen areas) unless treated by an off-site, independently operated effluent treatment facility.

All chemicals with the potential to enter effluent and sludge including, but not limited to:

• process chemicals,
• intentional product inputs,
• chemicals used to treat and clean cooling systems,
• chemicals used to treat the effluent, and
• custodial/cleaning chemicals used in the manufacturing area.

Managing Effluent and Sludge Quality

The comprehensive effluent quality management system must:

1. Be informed by an understanding of:

• The hazardous substances (defined as substances with RED hazard(s) per the Material Health Assessment Methodology) are used intentionally and unintentionally by the facility and the industry. This must be determined based on a comprehensive review of safety data sheets and the relevant literature on chemicals of known and emerging concern, both regulated and non-regulated.
• Local and catchment level water quality issues that are relevant to the facility, surrounding ecosystem, and community, including the quality of the source and receiving waters, and
  the health of receiving ecosystems, determined per the Characterize Local and Product Relevant Water Issues requirement and communication with non-governmental organizations (NGOs) working on local water issues and/or local water authorities.

Include comprehensive methods for avoiding the intentional and unintentional use, and subsequent introduction, of hazardous substances to the environment via effluent and sludge.

The methods must address all chemicals in scope and may include but are not limited to:

• Use of third-party certified and optimized input formulations and materials,
• Analytical testing of purchased formulations to screen for hazardous contaminants, and
• Adherence to industry best practice manufacturing restricted substances lists.

Include qualified third-party verification that processes and procedures for on-site treatment facility operation (if any) and water quality management are in place and functioning.

Monitor conventional water quality parameters (pH, total suspended solids, biochemical oxygen demand), and for the release of hazardous substances relevant to the industry and facility.

The following are required:

• Effluent, as it leaves the facility, must be tested for all substances of concern identified per the required research
• Best practices must be used to collect samples.
• Testing must be conducted at least two times per year.
• Laboratories conducting the tests must be ISO 17025 accredited.
  

Social Fairness Requirements

Companies are committed to upholding human rights and applying fair and equitable business practices.

Assessing Risks and Opportunities

Opportunities for improvement are identified and understood as a result of an assessment of human rights risks

Requirements

Assess human rights risks and identify opportunities for improvement for the applicant company, including all final manufacturing stage facilities, and tier 1 suppliers. (Note: Tier 1 suppliers are defined as suppliers to the final manufacturing stage, including in cases where the applicant is using contract manufacturing.)

Demonstrate ongoing efforts to improve visibility and assess risks within the certified product’s supply chain ( beyond tier 1).

Assess human rights risks and identify opportunities for improvement associated with the product’s components and raw materials (regardless of supply chain tier).

A company-level risk assessment based on conducting desk research, at a minimum, to identify:

Known and likely human rights risks associated with the applicant company’s own operations, final manufacturing stage facilities, the product’s supply chain, product cycling, relevant communities, potentially affected groups, and other relevant stakeholders.

Well-known risks associated with the applicant’s industry/sector and country(ies) of operation.

A tier 1 supplier risk assessment based on knowledge of supplier industry/sector and locations to identify high-risk supplier facilities including those in:

Industries/sectors are associated with a high risk of human rights violations or other negative human rights impacts.

Locations that are reputed to have conflict, corruption, widespread human rights violations, and/or weak governance.

De facto high-risk locations, are defined as countries that fall below the 65% percentile when taking an average of the six World Bank Worldwide Governance Indicators:

Identification of human rights due diligence best practices to address the risks.

Information regarding the impact and importance of identified risks as defined by affected stakeholders, including employees of the applicant company.

Prioritization of the risks and opportunities for improvement identified. At a minimum, the following must be prioritized:

• Well-known industry risks;
• Human rights violations;
• Issues where the applicant has substantial leverage to make improvements;

Testing the results of the assessment with the internal audience(s) to validate the outcome.

Ongoing efforts to improve visibility and assess risks within the product’s supply chain based on increasing knowledge of tier 2 (and eventually beyond tier 2) supplier industry/sector(s) and location(s) for tier 1 must be demonstrated.

For supplier locations that have not yet been identified, if there is a chance that the location is a high risk, then it must be considered de facto high risk until shown otherwise. Identification of the locations of these potentially high-risk suppliers must be prioritized.

High-risk components and raw materials must be identified, including the following de facto high-risk items:

Materials and components from source countries where there is reason to believe that child labor or forced labor is involved.

Human Rights Policy

The applicant is formally committed to respecting and upholding human rights as defined by international standards.

Requirements

Commit to respect human rights, as enshrined in municipal law and internationally recognized human rights standards, through company policy.

The policy must:

Establish human rights expectations for the applicant company, the supply chain, communities, potentially affected groups, and other relevant stakeholders.

Include the company’s commitment to supporting the following (Note: These are the expectations that must be established and are referred to as “required policy elements” in other sections of the standard):

• Elimination of discrimination with respect to employment and occupation including, but not limited to, ethnicity,  race, and gender-based discrimination,
• Elimination of harassment and abuse,
• Elimination of all forms of forced or compulsory labor, or activities that are known to lead to forced labor
• The abolition of child labor and adequate protections for workers above the legal working age and below age 18,
• Prevention of excessive working hours,
• Freedom of association and collective bargaining,
• Safe and healthy work, including;

1. Access to water, sanitation, and hygiene,
2. Emergency preparation and response,
3. Hazardous materials handling procedures,
4. Management systems that address health and safety risks,
5. Appropriate building construction, electrical, and fire safety,

• Provision of the legal minimum wage and all legally mandated benefits including employer contributions for social security benefits and services,
• Aspirations for the provision of a living wage that covers the necessities for life as defined in its local context (e.g., food, water, housing, health care, education, clothing, transportation, child care, discretionary income),
• Fair and ethical business practices, including anti-corruption/bribery. (Note: In practice, this may be part of a human rights policy or, more commonly, a separate company policy or code.),
• Additional priority issues identified in the risk assessment

Be formally approved and signed by a duly empowered officer of the applicant company or by the board of directors.

The policy must be guided by the eight Fundamental Conventions of the International Labor Organization and the United Nations Guiding Principles on Business and Human Rights, as well as the International Bill of Human Rights.

Where national law and these international human rights standards differ, the applicant must follow the higher standard; where they are in conflict, the applicant must seek to respect internationally recognized human rights to the greatest extent possible.

Monitor and Verify Performance

Performance on upholding human rights is monitored and verified, ensuring that corrective actions are taken when poor performance is identified and increasing the level of assurance that risks to human rights are addressed.

Requirements

For the applicant company and final manufacturing stage facilities, measure performance against the human rights policy and confirm the completion of corrective actions associated with issues of high concern including child labor, forced labor, corruption/bribery, and immediate threats to life and safety. For any other poor performance issues, plan corrective actions and, at recertification, demonstrate progress on addressing the issues.

Request data measuring performance against the human rights policy from all high-risk tier 1 suppliers. At recertification, demonstrate continued efforts to obtain performance data and evidence of tracking corrective actions that may be necessary at tier 1 supplier locations.

For components and raw materials associated with a high risk of child labor, forced labor, or support of conflict, specify or certify to a recognized certification (if available) or equivalent that includes performance requirements aligned with the human rights policy.

Performance data must be generated and verified by a qualified party.

If identified, the following issues of high concern must be resolved prior to certification or recertification

• Child labor,
• Forced labor,
• Corruption/bribery,
• Unauthorized subcontracting,
• Missing or deficient permits (i.e., business license, building permit, and environmental permit(s)
  if required by local regulations),
• Any immediate threat to life or safety (e.g., poor fire safety, structural safety hazard), and
• Denial of access to the facility, workers, or files.
  

Social audit performance data must be requested from all high-risk tier 1 suppliers providing components and materials that are subject to review If data are outdated or not available, the applicant must arrange for a social audit to be conducted.

Audits must be performed by qualified personnel with a social audit credential and no conflicts of interest related to the supplier.

Data must be generated within the past 24 months.

Corrective actions must be planned or ongoing for any other poor performance issues identified. At recertification, the applicant must demonstrate progress on:

• Encouraging suppliers to complete corrective actions,
• Tracking whether timelines are adhered to, and
• Taking steps to suspend or terminate relationships with suppliers that fail to make progress on remediation.

At recertification, progress must be demonstrated in requesting social audit data from additional
high-risk suppliers, if any, are identified through the supplier risk assessment. For suppliers that continually fail to provide data, the applicant must take remedial actions (i.e., steps to suspend or terminate the relationship) after a maximum of two years.

Strategy for Policy Implementation

A framework for monitoring and measuring progress toward the achievement of social performance targets and for identifying areas for improvement is established.

The strategy must:

Address priority risks and opportunities

Include specific time-bound performance and impact objectives to guide decision-making.

Define the scope of implementation.

Define the company’s human, technical, and material resource allocation for implementation.

For recertification, performance data must be collected and analyzed to measure progress toward achieving social targets and objectives and identify areas for improvement. For any areas of poor performance identified, methods of improving outcomes must be identified and evaluated, and the strategy refined accordingly.

Demonstrating Commitment

A culture of social fairness that prioritizes human rights and the application of responsible business practices to all stakeholders is established, promoted, and improved by company leadership.

Requirements

Demonstrate commitment and support for establishing and maintaining a culture whereby employees and business partners are able to achieve high levels of social performance.

The applicant’s leadership team (C-level executive and/or Board of Directors) must demonstrate commitment and support by:

Communicating the company’s social aspirations and values, strategy for upholding human rights, and significance of respect for human rights to the success of the company internally and/or externally.

Defining a position to actively lead on human rights, oversee implementation of the strategy, and drive continuous improvement efforts.

Ensuring there are defined procedures for escalating human rights risks and identify impacts to the executive team.

Management Systems

A management system for people and procedures is in place, ensuring that necessary corrective actions are taken, actions are effective, and that performance in protecting human rights is ultimately improved.

Requirements

Implement a management system that supports the achievement of the human rights policy commitments within company operations.

Implement a responsible sourcing management system that supports the achievement of the human rights policy commitments within the product’s supply chain.

The management system must include the following elements:

Designated staff with social compliance responsibilities.

Designated oversight function and process.

Business procedures that support the implementation of the human rights policy within the company’s workplace and across corporate functions and different levels of management.

Education for staff with social-related duties on human rights principles.

Internal communication and employee involvement.

Procedures to measure and evaluate work activities against the human rights policy.

Policies and procedures for the prompt implementation of corrective and preventive actions within the company’s workforce.

The responsible sourcing management system must include the following elements:

Designated staff with ethical sourcing responsibilities.

Designated oversight function and process.

Procedures to communicate to suppliers the company’s human rights policy and any associated ethical sourcing business processes.

Supplier contractual requirements for human rights policy compliance and monitoring (supplier codes of conduct is defined as a contractual term). Contracts must require suppliers to extend social compliance expectations to their suppliers.

Evaluation of new suppliers prior to the awarding of contracts to determine if the supplier can meet requirements.

Policies and procedures for the prompt implementation of corrective and preventive actions.

Education for sourcing and/or procurement team(s) on responsible sourcing and/or human rights principles.

Business procedures for identifying and documenting the cause and resolution of human rights issues and/or impacts in the supply chain that arises as a result of audits/reviews or concerns raised by employees or other third parties.

Grievance Mechanisms

A mechanism is in place by which employees, customers, suppliers, and other stakeholders may safely report negative effects of business activities and operations and other social fairness concerns to the company in order to obtain redress for those impacts.

Requirements

Provide a grievance mechanism that permits company employees and other stakeholders to obtain redress for negative human rights impacts. For any contract final manufacturing stage facilities, request that a grievance mechanism be made available.

For contract final manufacturing stage facilities, ensure that a grievance mechanism is available that permits employees and other stakeholders to obtain redress for negative human rights impacts.

The applicant company must have a grievance mechanism for company employees and other stakeholders that:

1. Is supported by a non-retaliation policy.
2. Is capable of addressing the risks and potential adverse impacts on people.
3. Addresses concerns promptly, using an understandable and transparent process based on local best
   practices that are readily accessible by any affected stakeholder.
4. Provides feedback to those concerned, without risking retribution.
5. Includes informing direct employees about the mechanism at the time of hire.
6. Does not impede or preclude access to judicial or administrative remedies that might be available
   under law or through existing arbitration procedures, or substitute for grievance mechanisms
   provided through collective agreements.
7. Includes written records and periodic reviews to identify and make necessary improvements.

Positive Impact Project

Positive impact on a social issue of significant importance to the company and/or value chain of the product.

Requirements

Implement a positive impact project that measurably improves the lives of employees, the local community, or a social aspect within the value chain of the product.

Conduct an assessment to determine the impact of the positive impact project using quantitative metric(s).

The applicant must invest in a social impact project that involves issues or opportunities that were identified in the risk assessment process or that are otherwise material to the company.

The project goals must be supported by one or more key performance indicators that are tracked before, during, and after the project.

Project selection must incorporate employee input.

An impact assessment must be performed based on the defined key performance indicators.

Transparency and Stakeholder Engagement

The applicant company is held accountable for any negative human rights impacts, encouraging ever-improving performance.

Requirements

Use open and transparent governance and reporting, making information on how human rights risks are managed and adverse impacts are addressed publicly available.

Incorporate stakeholder engagement and feedback into human rights risk management, using it to shape company strategy and operations.

The applicant must make the following information publicly available:

The human rights policy, objectives, and progress toward achieving objectives (activities and outcomes).

A description of adverse impacts on human rights and how they are addressed.

Sourcing information includes a number of suppliers by geographic location. Required for the final manufacturing stage, direct suppliers to the final manufacturing stage, and suppliers of high-risk components and raw materials.

The applicant must have a robust process for accepting or soliciting, and responding to, stakeholder feedback. Input from stakeholders must be regularly obtained and used to shape the strategy for implementing the human rights policy, management systems, and related operations.

Collaborating to Solve Social Issues

Industry-wide progress is made toward solving social issues that are widely recognized as being difficult and complex.

Requirements

Collaborate to develop and scale solutions to an intractable social issue within the value chain of the product.

Collaboration must be with a multi-stakeholder program or consortium working on a common goal to comprehensively address a social issue. The applicant must actively participate for the full certification period. The initiative selected must:

Support implementation of the company’s social strategy and policy.

Aim to drive progress within an industry or across multiple industries.

Ensure that ground rules for the partnership allow for an adequate voice for all participants.

Include an ongoing assessment of partnership impact.

Fostering a Culture of Social Fairness

Socially fair business practices in its governance and management approaches are applied by the applicant company. This is reflected by a diverse, inclusive, and engaged workforce and through training, remuneration, and payment of a living wage.

Requirements

Foster a diverse, inclusive, and engaged work environment in which social fairness operates as a core part of recruitment, training, remuneration, performance evaluation, and incentive structures.

Hiring and promotion processes must be evaluated and amended, if needed, to promote inclusivity and equal opportunity.

Access to training on key social issues (those included in the policy or identified per the risk assessment) must be provided to all executives and employees.

Awareness training on diversity and inclusion, gender equality, and anti-discrimination must be provided to all staff.

Social performance indicators must include ethnicity-, race-, sex- and age-disaggregated data on hiring, compensation, promotion, demotion, training, and mentoring for employees of all levels.

Data must be evaluated for pay equity, including a comparison of the average wages by ethnicity, race, and gender for work of equal value, and the ratio of the compensation of the CEO or equivalent to the median and average wage of a full-time worker.

Pay equity data must be published externally and made publicly accessible. An explanation of differences that may be realized or quantified overtime must be included.

Data on violence in the workplace, including gender-based violence, must be documented where it
has occurred.

Performance assessments of any executives or employees with designated social responsibilities must include consideration of criteria or metrics derived from the human rights policy and strategy.

Diversity and equal opportunity employment must be included in the organization’s social strategy and implementation.

The company must:

Conduct an evaluation to understand why differences in representation by ethnicity, race, and gender exist in the boardroom, the workplace, and the first tier of the supply chain.

Develop and implement a plan for remedying any differences that are or may be attributable to unequal opportunity.

Investigate, encourage, and promote equal opportunities for women and racial, ethnic, religious, or economically disadvantaged minorities in supervisory and management roles in the workplace, particularly if they are under-represented in such roles.

Employees must be paid a living wage. This is defined as being paid sufficiently for a standard workweek (not including overtime) to afford a decent standard of living for their families, inclusive of food, water, housing, education, health care, transportation, clothing, and other essential needs including savings for unexpected events and some disposable income.

Programs must be implemented to regularly engage employees (including other workers on the premises or under the supervision of the company) on the company’s social vision and goals and to identify actions that will help the company to achieve them.

Packaging for Certified Products

The requirements in this section apply to the packaging of a product seeking certification. At a minimum, the packaging for a product seeking certification is subject to the requirements listed in this section.

Alternatively, packaging may be:

Certified as a separate product- In this case, the product must meet all standard requirements, the same as other products.

Product packaging meets high product circularity standards at the entry-level of certification, ensuring alignment with the Nexity Network principles for these typically non-circular product types.

Requirements

For product packaging, design the packaging for cycling, incorporate cycled content, and ensure access to cycling.

The following are required:

The primary packaging materials for formulated consumer products are fast-moving consumer goods, including cosmetics, personal care, and household and industrial/institutional cleaning products, and for any product, packaging materials that are intended to be used with the product or for the application or dispensing of the product (mascara brush, lipstick tube, or other types of applicators, paper towel or toilet paper cores, tape dispenser, glue stick), must comply with:

• The RSL;
• The restriction on organohalogens and functionally related chemicals of concern;
• The sum of post-consumer cycled and renewable content must be ≥ 20% or equal to the percentage of cycled and renewable content required for the increasing demand;

The packaging is reusable/refillable, is part of a refill system (refill pouches), and/or the packaging has a product-specific take-back program.

Any other packaging materials contained in one sales unit as it is offered to the end-user or consumer at the point of purchase and not added exclusively for shipping (a toothpaste box, outer box containing individually wrapped product units), must comply with restrictions on organohalogens.

The packaging must be compatible with municipal cycling systems.

Plastic materials must be a type that is commonly recycled or composted via curbside pickup and the material must be accepted by municipal recycling programs in the region(s) where the product is sold.

Materials that are intended for composting must be fully compostable by a recognized compostability standard consistent with the intended cycling pathways.

Materials that are commonly recyclable (paper, steel, aluminum) must not contain
additives or features that are likely to result in low-value (low-quality) reprocessed material. Additives that may be present in the recycled content used are out of scope for this determination.

Exception:

Glass is exempt from this requirement.

The packaging is reusable/refillable, is part of a refill system (refill pouches), and/or the packaging has a product-specific take-back program.

The applicant has demonstrated efforts to reduce the amount of weight of the packaging materials for the certified product.

The following materials are not subject to the packaging requirements:

1. Materials used exclusively for shipping the product, such as a box, pallet, or shrink/plastic wrap, are not the primary packaging materials that contain, envelop, or hold the product.

2. Packaging materials for products that are sold exclusively as material inputs for other products (rather than being sold to the general public).

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