Exposed: Environmental documentation errors and EU’s greenwashing sanctions

Photo: Viega has ISO14001 certification, product spesific EPDs and DGNB Platinum for their educational building in Germany .

The EU Corporate Sustainability Due Diligence Directive (CSDDD) will implement measures from 2024 to strengthen environmental and human rights.

The construction industry plays a pivotal role in sustainable development, with significant climate and environmental impacts—also encompassing social factors—inherent in building materials from raw material extraction to production, pollution, and waste. Forward-thinking building owners impose climate requirements on materials in environmentally certified construction projects, such as BREEAM, Futurebuilt, and Svanemerket, which are regularly enhanced.

However, significant flaws have been identified in some environmental documentation, causing damage to the climate, environment, and serious manufacturers making substantial and costly efforts for the environment. Errors can be rectified similarly to other industries with relatively simple adjustments, as demonstrated by Statsbygg the largest public building owner in Norway.

Written by Chris Butters and Vikki Johansen. Opinions expressed are those of the authors.
Updated on January 30, 2024, with information from the EU Due Diligence Directive (CSDDD).

Control of finance and securities products

Financial statements are annually or quarterly verified by a third party for each business, not generally for an entire industry. Securities products are registered according to standards in digital systems, such as Securities Depositories for transparency and control of product information, ownership, transactions, and holdings. The Financial Supervisory Authority, as a regulatory body, examines documentation from securities firms every month and conducts on-site inspections to uncover illegal activities. Million-dollar fines are imposed on companies that violate laws or guidelines.

ESG – Sustainability for finance

Environmental, Social, and Governance (ESG) measures should include unified and transparent documentation verified by a third party for proper governance (G) according to EU taxonomy. ESG documentation can be a certified management system for annual improvement of a company’s entire product range or product-specific. Greenwashing towards consumers results in high fines and is sanctioned by the Consumer Authority.

EPD – Environmental Description of Building Materials with Limited Oversight

Environmental Product Declaration (EPD) is an environmental declaration for products based on Life Cycle Assessment (LCA) without trade secrets such as chemical composition. EPD should adhere to international standards verified by a third party, and footprints should be compared within the same product category (PCR), such as comparing greenhouse gas emissions from windows against other windows.

Product-specific EPDs should confirm the environmental impact for each factory. Industry and generic EPDs do not provide information on differences in environmental impacts, which can be significant for different production sites and factories.

Forgery of EPD

Glasopor lightweight fill material for foundations and SSAB, a steel manufacturer, have also found errors in some product-specific EPDs. Examples include forgery of information and false claims about the use of recycled scrap steel in factories. Information in the documents needs better verification than it currently receives.

Even though there are opportunities for improvements in today’s EPD system, it might be the best tool we have at the moment to assess different products against each other, so that purchasers, manufacturers, and developers can make the best choices regarding the environment and climate, according to Truls Børresen, CEO of Glasopor. He emphasizes the importance of specific EPDs, as generic EPDs have little value compared to the significant differences within a product category.

Specific vs. General industry EPDs

SSAB, a player in the steel industry, writes to Greenbuilt that they have experienced divergent values in EPDs. A problem has been the allocation of general values to steel mills that do not provide these figures. For example, the declared proportion of scrap metal in a product may be higher than what the mills actually utilize. Another example is a product group utilizing reference values from another product group with a completely different manufacturing method. This is like comparing apples and pears and does not provide an accurate picture.

SSAB has recently noticed a change where the use of low plant-specific values has been replaced with more general values not associated with any specific plant. One might ask if this is because the values from these plants were not initially favorable. Therefore, the use of general values can improve the result, which is not realistic.

The next question is: how would the specific values look if it were a requirement to use them? It also seems that third-party verifiers do not always possess the necessary knowledge about the products they are verifying. This lack of industry knowledge could lead to unreal values being incorrectly allocated. If industry knowledge were higher regarding the manufacturing of materials, such issues could be challenged and possibly avoided.

At the same time, SSAB notes a clear improvement from the past. Increased use of column D with resource recycling also provides a more comprehensive competitive basis, as the market for several decades is entirely dependent on “virgin” material due to the availability of scrap metal.

SSAB’s hope is that in the future, there will be greater focus on traceability, transparency, and knowledge, ensuring correct values that builders and end-users can rely on, making informed choices for real reductions in consumption and emissions.

How greenwashing with EPD can be addressed

The European Council adopted sanctions for violating sustainability directives in 2023. The due diligence directive (CSDDD) will impose significant obligations on large companies regarding actual and potential negative impacts on human rights and the environment, concerning their own operations, those of affiliated subsidiaries, and those performed by their business partners.

Statsbygg would like as precise information as possible about the actual environmental impact of a product, as they wrote to Greenbuilt. Therefore, they prefer product-specific EPDs that represent the environmental impact at a specific production site. Statsbygg also demands environmental management certification in selected projects. They do not accept average EPDs or industry EPDs, and they do not impose sanctions for EPD errors but rather central requirements in the contract.

Building owners, as well as planning and design professionals, should initially demand product-specific EPDs according to international standards verified by a third party for accurate environmental information. Building owners can impose requirements and sanctions if the demand for proper documentation is not fulfilled in the completed building. Authorities can ensure that requirements, systems, and sanctions for climate and the environment are as thorough as those for economic matters in society.

Explore further insight: 

Dissonance in obtaining green job cohesion is evident in the 2021 “Global Learner Survey: Climate Change” from Pearson

Eksternal references

Environmental crimes: deal on new offences and reinforced sanctions | News | European Parliament (europa.eu)

EMAS and environmental performance: A meta‐analysis (researchgate.net)