Supply Chain Leadership Award

Description

Recognizes organizations that have their own comprehensive greenhouse gas inventories and aggressive emissions reduction goals and demonstrate they are at the leading edge of managing greenhouse gas emissions in their organizational supply chains.

Application and Submission Instructions

  1. Review the general eligibility requirements and the specific evaluation criteria for the Supply Chain Leadership Award category specified below.
  2. Download the 2021 Climate Leadership Awards Application: Supply Chain (15 pp, 309 K, August 2020).
  3. Complete the application package, save it to your computer. Collect any required or additional supporting information.
  4. Submit application and supporting materials online via the CLA SmarterSelect portal.

PLEASE NOTE: If applying for an award in more than one category, submissions must be made separately for each. An organization may not reapply for an award category in which it has won in the past two years (e.g., an organization that won in a category in 2019 may not reapply for the same category until the 2022 awards, however, it can apply in another category if it meets the eligibility requirements for that category).

Supply Chain Leadership Award Eligibility Requirements

Applicants for the Supply Chain Leadership Award must meet the following eligibility requirements:

General Requirements

    1. Applicants must have significant operations in the United States. Given the global nature of climate change, the majority of greenhouse gas emissions reductions do not have to occur in the United States.
    2. Meet one of the following descriptions:
      • Legally-recognized corporate organization with annual revenue over $100 million; or
      • Governmental entity or academic organization with annual budget over $100 million
    3. CLA applications and applicants may be reviewed and evaluated for environmental, civil rights, and/or financial improprieties.  An application may be denied if the applicant/organization is found to be in serious violation of environmental regulations, civil rights, or financial impropriety by the CLA Steering Committee. Where areas of concern are identified, additional follow up may be conducted. 
    4. Exemplary supply chain-focused activities must have taken place between January 1, 2018 and December 4, 2020. However, applications may also refer to actions that commenced before that time and continued into the application period and the length of time an action has been in practice, or which explains how that prior activity served as a foundation for ongoing and more current activities.

GHG Inventory & Verification Requirements

  • GHG inventory must be publicly reported and include both Scope 1 and 2 emissions. The organization must report both location-based and market-based Scope 2 emissions for the base year.
  • Organizations may track progress toward a goal using a single base year or a base period that reflects an average of annual emissions over several consecutive years.*
  • Applicants must conduct a Scope 3 screening in line with the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standards, and use the criteria for relevance (outlined in this document, Table [6.1], pg. 61) to assess the relevance of Scope 3 categories. If Scope 3 emissions comprise over 40% of total entity-wide emissions, applicants should measure and publicly report those emissions.
  • Inventories must be third-party verified to a limited level of assurance or have been through a third-party critical review. If Scope 3 or direct or indirect biogenic emissions are included as part of the applicant’s goal, these must also undergo third-party verification or critical review.
  • Third-party verified GHG inventory statement is required for goal’s base year.
  • If purchases of renewable energy (demonstrated by the ownership and retirement of renewable energy instruments, such as renewable energy certificates) and/or offsets have been accounted for in the applicant’s base year or current year inventory, information about the (1) quantity (in units of MWh and/or CO2e, respectively), (2) description or project types, (3) certification/quality (e.g., Green-e certified), and (4) product vintage must be provided. If market mechanisms are purchased and applied, this information should be incorporated into the applicant’s verified GHG inventory and the third-party review documentation submitted alongside the application.
  • An applicant’s annual GHG inventory must include all Scope 1 and 2 sources, with the exception of small sources that are cumulatively equal to or less than 10% of total emissions.
    •   Similarly, up to 10% of an inventory can be accounted for using simplified estimation methods
    •   For organizations that have determined certain sources are immaterial and do not include them in their inventory, those sources should be documented in their inventory management plan and verification statement.
  • If base year emissions have changed by 5% or more as a result of structural change, a change in calculation methodologies, or because of a discovered error, applicants must adjust the base year inventory to reflect this correction or change. The organization must include both location-based and market-based scope 2 emissions in its reported GHG inventory for the base year, regardless of the magnitude of the change from previously reported scope 2 emissions.
  • If adjustments of 5% or more are made to the base year emissions, a third-party verification body or critical reviewer must attest to the accuracy of the base year adjustment. This requirement also applies if the difference between newly reported base year location-based or market-based scope 2 emissions and previously reported base year scope 2 emissions is 5% or more.
  • If an organization changes its reporting approach (e.g., from a calendar year to a fiscal year-basis) during the goal period it must provide emissions data for the period of time not reflected in the achievement year inventory so as to demonstrate that the organization would have still achieved the original goal had the reporting approach not changed. While verification of that data is recommended, it is not required. Alternately, organizations can elect to adjust the base year to conform to the reporting approach of the achievement year – in which case verification of the adjustment would be needed if the change in emissions is 5% or greater.
 

GHG Reduction Goal Requirements

  1. The goal must be publicly announced.
  2. The geographic boundaries of the goal and GHG inventory must include all U.S. operations, all North America operations, or all global operations. Within the chosen geographic boundaries, the reduction goal should include all scope 1 and 2 (either location-based or market-based) emissions sources that are included in the inventory. If Scope 3 emissions comprise over 40% of total entity-wide emissions (after conducting a Scope 3 screening in line with the GHG Protocol standards), applicants should include at least one third of relevant Scope 3 categories in their GHG reduction goal or justify their exclusion. Applicants may also provide information on plans for addressing relevant Scope 3 emissions categories in the future. ** The goal boundaries must remain consistent throughout the goal period.
  3. The goal must be an absolute reduction goal. Intensity goals will only be accepted if accompanied by a publicly announced absolute reduction goal.
  4. The base year for a first-generation goal may not be more than four years prior to the year the goal was publicly announced. For instance, for first generation goals set in 2017, 2013 would be the earliest base year accepted. Subsequent goals may use the same base year as a previous goal, provided that the new goal extends the goal period by three years at a minimum.
  5. The goal period (the time between the base year and achievement year) should be no less than three and no more than 15 years for a first-generation goal. Subsequent goals that use the same base year may extend the previous goal period by no fewer than three and no more than 15 years. 
  6. The timeframe between the goal being set and achieved should be at least three years to demonstrate ambitious and aggressive action.
  7. Goals must represent an aggressive reduction, which is defined as follows***:
    • An organization’s first goal must commit to at least a 2.5% reduction per year over the life of the goal. For example, a 5-year goal must commit to at least 12.5% total reduction. The 2.5% annual reduction requirement is intended to align with the Science Based Targets Initiative’s (SBTi) minimum ambition threshold for a ‘Well Below 2°C’ temperature goal. While organizations will be required to have goals that align with SBTi’s ambition threshold for a ‘Well Below 2°C’ temperature goal (2.5% linear annual reduction), applicants are encouraged to align with the SBTi threshold associated with a 1.5°C temperature goal (4.2% linear annual reduction.).
    • A subsequent goal with a new base year must also commit to at least a 2.5% reduction per year over the life of the goal. For example, a 5-year goal must commit to at least 12.5% total reduction. An organization may substantiate their case for a subsequent goal that is below the required 2.5% threshold but that has ≥1.8% reduction per year, such as a goal considered aggressive in a specific sector.

       

For more specific information on third-party verification, reporting GHGs, or the use of RECs and offsets, please refer to the FAQ page on this website.

Requirements Related to Transportation and Distribution-Related Activities

Applicants citing significant achievements in U.S. and Canadian transportation and distribution-related supply chain activities should belong to the EPA SmartWay program and be eligible for recognition under the EPA SmartWay program. However, this is not a requirement.

Additional Considerations for Evaluation:

  1. Breadth and scope of the implemented program, which should cover multiple supply chain (Scope 3) emissions categories from significant sources.
  2. Degree to which an action surpasses normal business practice in a sector.
  3. GHG reduction potential or effect of the implemented action.
  4. Level of commitment demonstrated by the applicant.
  5. Demonstration of collaborative engagement with suppliers and/or customers.
  6. Activities that are deemed to exceed business-as-usual.

* A single year could be defined as a calendar year or a fiscal year. A rolling base year, which involves shifting or rolling the base year forward by a certain number of years at regular intervals of time, may also acceptable if transparently documented.

** GHG reduction goals publicly set by applicants whose Scope 3 emissions comprise over 40% of total entity-wide emissions (after conducting a Scope 3 screening in line with the GHG Protocol standards) after January 1, 2021 must address at least one third of relevant Scope 3 categories. This update will impact future applicants beginning in the 2022 Climate Leadership Award application cycle.

*** A goal publicly set after January 1, 2020 must commit to at least a 2.5% reduction per year over the life of the goal. For example, a 5-year goal must commit to at least a 12.5% reduction. Goals set prior to January 1, 2020 must have achieved at least a 1.8% average annual reduction. As of January 1, 2025, all recognized goals (including those recognized in the Goal Achievement category) must have achieved at least 2.5% average annual reductions. Goals achieved prior to January 1, 2025 must have achieved at least a 1.8% average annual reduction.