The concept of decarbonization has evolved significantly across boardrooms around the world.

Companies are focusing on product level environment transparency via Lifecycle Assessment (LCAs) and Environmental Product Declaration (EPD), making net-zero commitments, setting-up sustainability teams, and ensuring implementation of climate disclosures. The purchase of renewable energy has increased considerably, however, in spite of these developments, the majority of the decarbonization plans have structural weaknesses. The supply chain is the main source of direct difficulty than direct operations.

The Structural Imbalance: Where Emissions Truly Reside

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Majority of the emissions from most organisations do not originate from owned sources but come from different parts of the value chain such as sourcing of raw materials, supplier production processes, logistic networks, use of products and end-of -life treatment.

Almost 90% of the carbon footprint of an organization is categorised as scope 3 emissions. The number can be greater than 90% for many businesses, showing how the upstream and downstream activities contribute to climate change. In decarbonisation plan, the operational emissions are taken into account, while the majority of the emissions are in the value chain of the company, posing a major decarbonisation issue.

Where Decarbonisation Strategies Break Down

1. Over-Reliance on Spend-Based Emissions Factors

Most of the scope 3 emissions are calculated using the spend-based approach, which uses sector average carbon intensity for purchase expenditure to estimate emissions. The approach does not provide a significant insight into supplier performance or product level emissions difference. This is often why the procurement teams cannot differentiate suppliers based on carbon efficiency, and the decisions are made based on quality, delivery timelines rather than environmental performance.

2. Limited Supplier Engagement Across Value Chains

The Supplier Engagement program of most companies considers Tier 1 suppliers and after this level, the visibility into emissions remains low. Most of the carbon intensive processes like raw materials extraction and primary manufacturing are often done by Tier 2 and Tier 3 suppliers.

3. Disconnect Between Corporate and Product-Level Data

The divide between corporate level greenhouse gas accounting and environmental assessment at the product level is another major problem. The greenhouse gas emissions reporting at the organizational level focuses on frameworks such as GHG Protocol and ISO 14064-1. The Product level assessment is based on Lifecycle Analysis (LCA) procedures that are done under ISO 14040/44 and ISO 14067.

Thus, the companies cannot decide which product, materials, or suppliers have the biggest impact on emissions. Hence, decarbonisation plan continues to be high level and have little effect on operational change.

Environmental Product Declarations: The Missing Link

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The Environmental Product Declarations (EPDs) are the main way to address these gaps. An Environmental Product Declarations is a third party verified document that highlights the environmental performance of the product across its lifecycle, from raw material extraction to end-of-life. It is developed under ISO 14025 and provides transparent, comparable, and credible data.

The Environmental Product Declarations (EPD) are different from Product Carbon Footprint (PCF), which focuses on greenhouse gas emissions only. Environmental Product Declaration (EPD) studies multiple environmental impact categories such as resource depletion, acidification, eutrophication, and water use along with climate change.

In the Environmental Product Declarations (EPD), the complex LCA data is translated into a format that is usable within the procurement processes, as they alone direct comparison between product based on verified environmental performance, supporting informed and data driven purchase decisions.

The Last Mile: Where Environmental Product Declarations Drive Real Impact

A. Construction and the Built Environment

The construction sector is one of the most carbon intensive industries globally, and its emissions are dependent on the type of materials used. The Environment Product Declarations (EPD) help in comparing embodied carbon across products and help in selecting materials that can result in significant reduction of emissions at the project level. In the absence of such data, the purchase decision lack clarity on embodied emissions, thus affecting the decarbonisation efforts.

B. Market Competitiveness and Procurement Dynamics

In most of the digital procurement platforms, the bids are based on embedded carbon of the products and products without verified environmental data are disadvantaged. In the European market, evidence shows that products with Environmental Product Declarations (EPD) gain market share, and those without verified data face reduced competitiveness. And sometimes, when Environment Product Declarations (EPD) is not available, then a default high-carbon profile is assigned to the product.

C. Regulatory Acceleration: CSRD and CBAM

The Corporate Sustainability Reporting Directive (CSRD) by the European Union requires detailed disclosure of the sustainability parameters such as the scope 3 emissions across the value chain. The Carbon Border Adjustment Mechanism (CBAM) has introduced financial implications for embedded carbon in imported goods into the European Union. When verified data is not available, the CBAM applies default emission values that often result in higher reported emissions and increased financial implications.

Thus, the organisations that have established product-level data system are in advantage and comply efficiently with the regulatory requirements. While others may face challenges for building such capabilities under time constraints.

Building a Last-Mile Decarbonisation Strategy

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  • A structured and data driven approach is required to connect the gap between organisational ambition and supply chain impact.
  • Identification of carbon hotspot at product level is required that focuses on upstream material flows which mostly contribute to the majority of the embodied emissions.
  • To ensure consistency and comparability in Environmental Product Declarations (EPD) development, align products with the Product Category Rules (PCRs).
  • The Environmental Product Declaration (EPD) data should be integrated into procurement systems so that the carbon performance becomes the standard evaluation criteria along with cost and quality of the product.
  • The Supplier Engagement framework should be strengthened including capacity building initiatives and standardised data collection approaches.
  • The Product level data should be aligned with regulatory frameworks such as the CSRD disclosures and CBAM compliance requirements.

Conclusion

The next phase of decarbonisation will be defined by the ability to operationalize the commitments within a complex supply chain and not by corporate commitments alone. Closing the last-mile gaps in decarbonization will require moving from aggregated reporting to granular and detailed product level data. The Environmental Product Declaration (EPD) provides a connection between organizational climate ambition and product-level action. With increasing regulatory scrutiny, evolving procurement practices and stakeholder expectations, companies that invest in Environmental Product Declaration (EPD) will be well positioned to convert ambition to impact.

Why Choose Ascentium India?

At Ascentium India, we help businesses move beyond carbon accounting to product-level environmental transparency. Our expertise spans Life Cycle Assessment (LCA), Environmental Product Declarations (EPDs), Product Carbon Footprints (PCFs), and decarbonisation strategies, enabling organisations to quantify, verify, and communicate the environmental performance of their products with confidence. From conducting robust life cycle assessments to developing internationally compliant EPDs and supporting regulatory requirements, we help organisations transform sustainability commitments into credible, data-driven product disclosures. Whether your goal is to meet customer expectations, access global markets, or strengthen ESG performance, Ascentium India provides the technical expertise and strategic guidance needed to deliver measurable results. To learn more about our services, please email us at in-info@ascentium.com or reach out to us via WhatsApp at (+91) 77380 66622.

Authored by:
Shreyash Khadse | Sustainability & ESG

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