Understanding the Fundamentals of EPDs

Environmental Product Declarations have emerged as essential documents in the sustainability landscape, providing third-party verified assessments of products' complete carbon footprints and environmental performance throughout their lifecycle. These comprehensive reports enable companies to make meaningful comparisons between similar products and accurately calculate the environmental impact of their own offerings. As industries worldwide intensify their focus on sustainability and climate impact reduction, EPDs have gained significant prominence, particularly in material procurement decisions. "EPDs are already commonly used in the purchasing of raw materials especially for the construction industry," explains Kaisa Ahvonen, Sustainability & Product Manager at SSAB. Their importance extends beyond procurement, with Ahvonen noting that "In future, LCA calculation can be used as an evaluation criterion for future production investments and as tools for R&D, to evaluate future product concepts." Despite their value, EPDs often present interpretation challenges due to their technical complexity and specialized terminology. Understanding how to navigate these documents effectively has become a crucial skill for businesses committed to enhancing their sustainability performance while maintaining competitive advantage in increasingly environmentally conscious markets.

Navigating Technical Complexity for Strategic Advantage

The technical nature of EPDs can initially appear daunting to many businesses. "EDPs can be complicated because of their technical language and many abbreviations used," acknowledges Kaisa Ahvonen. "However, the information they contain can be invaluable to your business and your operations." This complexity, while challenging, conceals strategic opportunities for companies that invest in developing EPD literacy. Emanuel Lindbäck, LCA Specialist at SSAB, emphasizes that proper interpretation of EPDs can yield significant business benefits: "By correctly interpreting an EDP, companies can get insights into the environmental impact of different life cycle stages of a product such as production, use and end of life treatment." These insights enable businesses to make data-driven decisions about supplier selection, operational improvements, and regulatory compliance strategies. The competitive advantages extend beyond operational efficiencies, with Lindbäck noting that effective use of EPD data can "enhance the company's reputation, drive innovation and improve market competitiveness." As sustainability becomes increasingly central to business strategy, the ability to extract actionable intelligence from EPDs represents a valuable organizational capability that can differentiate companies in crowded marketplaces and appeal to environmentally conscious customers, investors, and partners.

Identifying the Reference Unit: The Foundation of EPD Analysis

One of the fundamental challenges in interpreting EPDs is correctly identifying the reference unit being used, as this forms the basis for all environmental impact calculations within the document. "Known as a declared or functional unit, this can be expressed in terms of kilograms, tonnes, cubic meters or as a specific function when the product is installed," explains Emanuel Lindbäck. "Since all calculations in an EPD are in relation to this unit, knowing what this unit is, is essential for interpreting its results." This variation in reference units makes direct comparisons between different EPDs potentially misleading unless the reader carefully accounts for these differences. For example, one product might express its environmental impact per kilogram of material, while another might use a functional unit based on performance over time or application in a specific context. Accurate interpretation requires careful attention to these details, particularly when using EPD data to inform procurement decisions or product development strategies. Companies seeking to maximize the value of EPD information must develop systematic approaches to standardizing and normalizing this data across different products and suppliers, ensuring that comparisons reflect genuine environmental performance differences rather than merely different measurement approaches.

Navigating Standards and Product Category Rules

Another critical aspect of EPD interpretation involves understanding the specific standards and Product Category Rules under which the document was developed. "Different PCRs can have varying rules for calculating and presenting their environmental impact," notes Emanuel Lindbäck. "So, knowing the specific rules used is vital for accurate interpretation. This also applies to the version of the PCR as it might have been updated since the EPD was published." These variations in methodology can significantly impact the reported environmental performance, making awareness of the underlying frameworks essential for meaningful analysis. PCRs establish sector-specific guidelines for conducting life cycle assessments and creating EPDs, ensuring consistency within product categories while potentially creating differences between them. Companies working across multiple industries or with diverse supply chains may encounter various PCR frameworks, requiring adaptable interpretation approaches. Additionally, as sustainability standards evolve, PCRs undergo periodic updates to reflect new scientific understanding, regulatory requirements, or industry best practices. Staying informed about these changes helps businesses maintain accurate environmental performance assessments and avoid misinterpretations that could lead to flawed strategic decisions or misleading communications with stakeholders.

Taking a Holistic View of Environmental Performance

When analyzing EPDs, it's essential to resist the temptation to focus exclusively on a single environmental indicator, such as carbon footprint, at the expense of a more comprehensive assessment. "EPDs contain a lot of figures and when comparing products the environmental performance cannot be judged on a single environmental indicator since its impact can vary from product to product. Therefore, it is important to have a holistic perspective when reading an EPD," advises Emanuel Lindbäck. This multidimensional approach acknowledges that environmental impact encompasses numerous factors, including resource depletion, water usage, acidification potential, and various emissions categories. Products that perform well in one environmental dimension may have significant impacts in others, making balanced evaluation crucial for truly sustainable decision-making. Companies seeking to optimize their environmental performance must develop frameworks for weighing these different factors according to their specific priorities, regulatory contexts, and stakeholder expectations. This holistic perspective also helps businesses identify unexpected environmental trade-offs and avoid unintentionally shifting impacts from one environmental domain to another when making product or process changes based on EPD insights.

SSAB's Enhanced Transparency Approach

SSAB has taken significant steps to enhance the transparency and utility of its EPDs, going beyond minimum requirements to provide customers with more comprehensive environmental information. "To further improve transparency of its products' environmental impact, SSAB's EPDs not only include all the required information as defined by EPD standards, but also detailed information from production flows," the company explains. This additional detail includes specific information about production locations, material flows between different facilities, and the main process steps at each site. By providing this enhanced level of transparency, SSAB enables its customers to develop more accurate understanding of the environmental footprint associated with the materials they purchase and incorporate into their own products. This approach reflects growing market demand for supply chain transparency and detailed environmental data that can support sophisticated sustainability strategies. For companies using SSAB materials, this additional information facilitates more precise lifecycle assessments of their own products, potentially strengthening their competitive position in markets where environmental performance is increasingly valued. SSAB's approach also demonstrates how EPDs can evolve beyond compliance tools to become valuable resources for collaborative sustainability improvement throughout value chains.

Leveraging EPDs for Your Own Products

For companies seeking to maximize the value of EPDs, the logical progression moves from understanding suppliers' declarations to developing EPDs for their own products. This process enables businesses to quantify and communicate the environmental performance of their offerings, potentially creating competitive differentiation in environmentally conscious markets. When creating product EPDs, companies can incorporate the environmental data from suppliers' EPDs, including those from SSAB, as inputs to their own lifecycle assessments. This approach creates a chain of verified environmental information flowing through the value chain, supporting accurate sustainability claims and identifying improvement opportunities. Developing EPDs for finished products requires investment in lifecycle assessment expertise, data collection systems, and third-party verification, but these costs are increasingly justified by market demands for environmental transparency. Companies that successfully implement this approach can respond effectively to customer requests for environmental information, demonstrate compliance with evolving regulations, and potentially command premium pricing for products with verified superior environmental performance. As sustainability continues to influence purchasing decisions across industries, the ability to produce credible EPDs for a company's product portfolio represents an increasingly valuable capability that supports both environmental improvement and business growth.

Future Trends in EPD Utilization

As sustainability considerations become more deeply embedded in business decision-making, EPDs are likely to evolve in both form and function. The growing emphasis on circular economy principles will likely expand EPDs to more comprehensively address end-of-life scenarios, material recoverability, and potential for remanufacturing or recycling. Digitalization of EPD information is another emerging trend, with machine-readable formats enabling more sophisticated analysis, comparison, and integration with design and procurement systems. This digital transformation could significantly enhance the practical utility of EPDs by allowing real-time environmental impact assessments during product development or material selection processes. Regulatory developments, particularly in regions like the European Union with its focus on sustainable products and supply chain due diligence, will likely increase both the requirements for EPDs and their importance in market access strategies. Companies that develop advanced capabilities in EPD creation, interpretation, and strategic utilization will be well-positioned to navigate this evolving landscape. As environmental performance increasingly influences competitiveness across industries, EPDs will transition from primarily technical documents to strategic business tools that inform innovation, marketing, and stakeholder engagement, rewarding organizations that invest in developing related expertise and systems.

Key Takeaways:

• Environmental Product Declarations provide third-party verified assessments of products' environmental impacts, becoming increasingly crucial for regulatory compliance and competitive advantage in sustainability-focused markets.

• Effective EPD interpretation requires understanding reference units, applicable standards, and Product Category Rules, while avoiding the common mistake of focusing on single environmental indicators rather than taking a holistic view.

• SSAB enhances its EPDs with detailed production flow information beyond standard requirements, enabling customers to better understand environmental impacts and create more accurate lifecycle assessments for their own products.