CSRD Scope 3: Why Your EPD Is Now a Supply Chain Compliance Tool

Understanding CSRD and Its Reach into Construction Supply Chains

The Corporate Sustainability Reporting Directive (CSRD), adopted as Directive (EU) 2022/2464, fundamentally transforms how European companies report on sustainability. Unlike its predecessor — the Non-Financial Reporting Directive, which applied to roughly 11,700 companies — the CSRD extends mandatory sustainability reporting to approximately 50,000 companies across the EU, including many mid-sized construction firms, building material manufacturers, and property developers that previously had no formal sustainability reporting obligations.

The CSRD does not merely ask companies to describe their sustainability ambitions in narrative form. It requires disclosure according to the European Sustainability Reporting Standards (ESRS), which are detailed, prescriptive standards developed by EFRAG and adopted by the European Commission as delegated acts. Among these, ESRS E1 — Climate Change — is perhaps the most consequential for the construction value chain, because it requires companies to disclose their greenhouse gas emissions across all three scopes: Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from purchased energy), and Scope 3 (all other indirect emissions in the value chain).

For construction companies and building material distributors, Scope 3 is where the real challenge — and the real relevance of EPDs — lies.

Why Scope 3 Is the Dominant Challenge for Construction

The GHG Protocol, which forms the methodological foundation for ESRS E1 emission disclosures, divides Scope 3 into 15 categories. For construction companies, Category 1 — Purchased Goods and Services — typically represents the largest share of total emissions, often exceeding 70 or even 80 percent of a company’s entire carbon footprint.

The reason is straightforward. A construction company’s Scope 1 emissions come from fuel burned in its own equipment — cranes, excavators, site vehicles, and generators. Its Scope 2 emissions come from the electricity it purchases for offices and site operations. These are significant but manageable in scale. However, the concrete, steel, aluminium, glass, insulation, and hundreds of other materials that a construction company purchases and installs in buildings carry enormous embedded carbon from the energy-intensive manufacturing processes used to produce them. When a contractor pours 5,000 cubic metres of concrete into a foundation, the CO₂ released during clinker production, aggregate processing, and concrete batching is attributed to the contractor’s Scope 3.

This means that meaningful Scope 3 reporting for construction is fundamentally about understanding the carbon intensity of purchased materials. And this, in turn, is precisely what Environmental Product Declarations are designed to communicate.

Scope 1, 2, and 3: A Clear Distinction

Scope 1: Direct Emissions

These are emissions from sources that the reporting company owns or directly controls. For a construction company, this includes diesel burned in excavators and trucks, natural gas used in on-site heating, and any refrigerant leaks from company-owned equipment. For a cement manufacturer, Scope 1 includes both the fuel combustion in kilns and the process emissions from the calcination of limestone — which together make cement production one of the most carbon-intensive industrial activities.

Scope 2: Energy Indirect Emissions

Scope 2 covers emissions from the generation of purchased electricity, steam, heating, or cooling consumed by the reporting company. A steel mill’s Scope 2, for example, includes emissions associated with the electricity purchased to run its electric arc furnace. Companies report Scope 2 using both the location-based method (average grid emission factor) and the market-based method (specific emission factor of the purchased electricity product).

Scope 3: Value Chain Emissions

Scope 3 encompasses all other indirect emissions that occur in the reporting company’s upstream and downstream value chain. For construction, the most material categories are typically Category 1 (purchased goods and services — i.e., building materials), Category 4 (upstream transportation and distribution), Category 5 (waste generated in operations), and Category 11 (use of sold products — relevant for building developers whose buildings will consume energy for decades). Category 1 almost always dominates, because the embodied carbon of materials dwarfs transport and waste emissions.

EPDs as Primary Data for Scope 3 Category 1

Under ESRS E1, companies are expected to use the best available data for their emission calculations. The standard distinguishes between primary data — specific to the actual products purchased — and secondary data — generic emission factors drawn from databases or industry averages. The use of primary data is strongly encouraged, particularly for material emission categories.

An EPD, prepared in accordance with EN 15804+A2 and verified by an independent third party, provides exactly the primary data that Scope 3 reporting requires. The GWP-total figure reported in modules A1–A3 of an EPD represents the cradle-to-gate greenhouse gas emissions per declared unit of the product. When a construction company knows exactly which manufacturer’s concrete, steel, or insulation it has purchased, and that manufacturer has a current EPD, the contractor can use the EPD’s GWP figures directly in its Scope 3 calculations rather than relying on generic emission factors.

The difference in data quality is substantial. Generic emission factors for concrete, for instance, might be based on national or regional averages that do not reflect the specific mix design, clinker ratio, or energy source of the actual concrete plant. A specific EPD, by contrast, captures those exact parameters. Using EPD data therefore produces a more accurate picture of a company’s actual carbon footprint — and, in many cases, a more favourable one, since manufacturers that invest in EPDs tend to be those that have also invested in reducing their environmental impact.

How Buyers Are Asking Suppliers for EPDs

The CSRD is creating a cascading demand for environmental data throughout construction supply chains. Large contractors and developers subject to CSRD reporting are, in turn, asking their material suppliers to provide EPDs — not as a nice-to-have marketing document, but as a compliance necessity.

This plays out in several practical ways. Procurement departments are increasingly including EPD requirements in tender specifications, sometimes as mandatory submission documents and sometimes as evaluation criteria that favour suppliers with declared environmental performance. Framework agreements with material suppliers are being amended to include clauses requiring the provision of EPDs or equivalent environmental data. Some large contractors have implemented digital platforms where suppliers upload their EPDs, which are then automatically linked to project material schedules and fed into corporate Scope 3 calculations.

For suppliers that do not have EPDs, the consequence is not necessarily exclusion from the market — not yet — but a competitive disadvantage. When a contractor must choose between two equivalent products and one comes with a verified EPD while the other does not, the EPD-bearing product reduces the contractor’s reporting burden, improves its data quality, and may even lower its reported Scope 3 figure. That is a tangible commercial advantage that goes beyond sustainability branding.

Primary EPD Data vs. Generic Emission Factors

The distinction between primary and generic data is not merely academic; it has real implications for the credibility and accuracy of sustainability reports. Generic emission factors — such as those found in databases like ecoinvent or GaBi — represent industry averages or typical values for a product category. They are useful as screening tools and for initial estimates, but they inherently cannot capture the specific performance of a particular manufacturer’s product.

Consider two concrete producers: one uses a high clinker ratio Portland cement and conventional aggregate processing, while the other uses a blended cement with 40 percent ground granulated blast furnace slag and locally sourced recycled aggregate. Their products might be functionally identical for a given application, but their GWP profiles differ enormously. A generic emission factor would assign the same carbon figure to both. An EPD captures the real difference.

For the reporting company, this matters because ESRS E1 requires disclosure of the methodologies used, the proportion of primary versus secondary data, and the level of estimation involved. Auditors reviewing CSRD reports will scrutinise data quality, and reports that rely heavily on generic factors for material emission categories will face more questions about accuracy and completeness. Using EPDs as primary data strengthens the assurance case and demonstrates a serious, evidence-based approach to carbon reporting.

Practical Integration: From EPD to Scope 3 Report

1. Map material purchases. Identify which products are purchased, in what quantities, from which suppliers, and which of those suppliers have current EPDs. This mapping exercise often reveals significant data gaps.
2. Calculate primary-data emissions. For products where EPDs are available, multiply the quantity purchased (in the declared unit of the EPD — per tonne, per cubic metre, or per square metre) by the GWP-total figure from modules A1–A3.
3. Fill gaps with secondary data. For products without EPDs, use generic emission factors from recognised databases, adjusted where possible for regional or technology-specific differences.
4. Aggregate and report. Sum primary and secondary data calculations for the overall Category 1 figure. Disclose data sources and the proportion of primary vs. secondary data as required by ESRS E1.
5. Improve over time. Actively encourage key suppliers to develop EPDs, increasing the proportion of primary data and improving accuracy and credibility of reported figures.

Integrating EPD data into Scope 3 calculations requires a systematic approach. The first step is to map the company’s material purchases — identifying which products are purchased, in what quantities, from which suppliers, and which of those suppliers have current EPDs. This mapping exercise often reveals significant data gaps, which can then be prioritised for supplier engagement.

For products where EPDs are available, the calculation is conceptually simple: multiply the quantity purchased (in the declared unit of the EPD — typically per tonne, per cubic metre, or per square metre) by the GWP-total figure from modules A1–A3. Summing across all purchased products with EPDs gives the primary-data-based portion of Category 1 emissions.

For products without EPDs, the company must use secondary data — generic emission factors from recognised databases, adjusted where possible for regional or technology-specific differences. The GHG Protocol and ESRS E1 both accept this approach but require transparency about data sources and quality.

The overall Scope 3 figure for Category 1 is then the sum of primary and secondary data calculations. Over time, as more suppliers obtain EPDs, the proportion of primary data increases, and the overall accuracy and credibility of the reported figure improves. This is why forward-thinking construction companies are not just passively waiting for suppliers to provide EPDs but are actively encouraging — and in some cases financially supporting — their key suppliers’ EPD development efforts.

EPD Polska and Supply Chain Readiness

For manufacturers in Poland and Central and Eastern Europe, EPD Polska provides an accessible pathway to producing the verified environmental declarations that downstream customers increasingly require. As a recognised programme operator under EN 15804+A2, EPD Polska offers the credibility and standardisation that CSRD reporting demands.

Manufacturers that develop their EPDs through EPD Polska not only satisfy their direct customers’ data needs but also position themselves favourably in a market that is rapidly shifting toward environmental transparency. The cost of developing an EPD — while not negligible — is modest compared to the potential commercial impact of being unable to provide the environmental data that your largest customers now need for regulatory compliance.

This is particularly relevant for contractors seeking supplier EPDs as part of their CSRD preparation. When a Polish steel or concrete supplier can provide a verified EPD, it removes a data gap from the contractor’s Scope 3 calculation, strengthens the contractor’s reporting, and solidifies the commercial relationship.

The Convergence: CSRD, CBAM, Taxonomy, and CPR

Scope 3 reporting under CSRD does not exist in a regulatory vacuum. It intersects with the Carbon Border Adjustment Mechanism, which requires embedded emission data for imported materials; the EU Taxonomy, which uses embodied carbon data for Do No Significant Harm assessments; and the evolving Construction Products Regulation. Across all these frameworks, the common denominator is verified, product-level environmental data — and the EPD is the established instrument for delivering it.

Companies that view EPD development as serving only one regulatory purpose are undervaluing the investment. A single EPD can simultaneously support a customer’s CSRD Scope 3 reporting, facilitate CBAM compliance for cross-border trade, contribute to EU Taxonomy alignment assessments, and provide the environmental performance information that the construction market increasingly demands. The return on investment multiplies as the regulatory landscape converges around common data needs.

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