Scope 4 emissions refer to the avoided emissions that are prevented or reduced as a result of a company's products or services. Scope 4 emissions also refer to home working emissions. The term scope 4 emissions also refers to emission reductions that happen outside of a life cycle of the product or value chain, but as a result of the use of that product.
Goods related to scope 4 emissions examples: Low-temperature detergents, fuel-saving tires, energy-efficient ball-bearings, and teleconferencing services.
The term "Scope 4" was coined by World Resources Institute, which established the GHG Protocol.
Dating back to 2013, the GHG Protocol identified avoided emissions as emission reductions which occur outside of a product's lifecycle or value chain, but as a result of the use of the product.
There are neither mandatory requirements to report Scope 4 emissions, nor universally recognized standards to measure them for carbon accounting purposes. The identification of emission reduction opportunities are also not officially required by climate regulations, but should be part of a comprehensive strategy for reducing emissions.
Scope 4 emissions should not be counted when calculating or compensating scopes 1, 2, and 3 emissions because they fall outside of those scopes. Few businesses take into account scope 4 emissions, though measuring scope 1 and 2 emissions has become standard for many companies.
This article will discuss scope 4 emissions, why businesses should include them in their carbon accounting and how to calculate avoided emissions.
Organizations should be aware of scope 4 emissions and the concept of avoided emissions when developing their corporate sustainability strategies. By understanding scope 4 emissions, organizations can better understand the potential savings from investing in sustainable projects and can make informed decisions about how best to reduce their carbon footprint. When businesses report avoided emissions, they create an opportunity to develop emissions scenarios and strategies to act on them.
Scope 4 emissions offer a broader perspective on a company's environmental impact by emphasizing the external impact of its products or services. This element of carbon accounting is essential for comprehending the full extent of a company's carbon footprint and its role in achieving a net-zero economy. By reporting on Scope 4 emissions, a company not only accounts for the emissions it directly or indirectly causes but also the emissions it helps to prevent through its innovative solutions.
For example, if a company creates a product and optimizes it to emit less CO2 during its production then emissions can be reported according to the making of the product from the beginning of the value chain until it reaches the end user, and then the estimated calculated emissions of what would be used during the product's cycle. So the overall reduction has been made at the product design stage by optimizing the product. (During the manufacturing and logistics processes the scopes 1 and 2 were counted for and scope 3 if they report the up and downstream emissions if the outside companies in the value chain don't count their scopes 1 and 2s). The avoided emissions are what would have been had the product never been optimized or complimented.
Certain stakeholders may be concerned that the emissions from making a new product will be too high. If the pros outweigh the cons and in the long-term the emissions of the product are less damaging than the former, and all scopes were counted for, then it will improve the environment given the manufacturing process is as clean as efficient as it can be. Since conscious consumers now demand to know the product carbon footprint (PCF) of what they buy, they further demand to know their final impact on the environment by using that product.
Reporting avoided emissions is a powerful way for businesses to accurately account for their impact on the environment, helping them meet sustainability and climate goals.
Recommended reading
To learn more about scope reporting and carbon reductions, check out our free resources:
• Article: What Are Scope 1, 2, and 3 Emissions?
• Article: Scope 3 Emissions: Contributing Factors, Measurement and Reduction
• Article: 30 Most Common Questions About Scope 3 Emissions
Calculating Scope 4 emissions involves quantifying the emissions avoided through the use of a company's products or services.
1. Identify the Product or Service: Determine which products or services contribute to emissions reductions. Examples include renewable energy solutions, energy-efficient technologies, or sustainable materials.
2. Determine the Baseline Scenario: Establish a baseline scenario representing the emissions that would have occurred without the product or service. This often involves comparing it to a conventional alternative. For instance, if your product is a solar panel, the baseline scenario could be electricity generated from fossil fuels.
3. Measure the Impact: Calculate the emissions produced in the baseline scenario and compare them to the emissions produced using your product or service. This involves gathering data on the energy consumption, fuel usage, or other relevant metrics for both the baseline and the product/service. And using standardized emission factors to convert energy consumption or other metrics into CO₂ equivalents. These factors are often provided by government agencies or international organizations.
4. Calculate Avoided Emissions: Subtract the emissions associated with your product or service from the emissions of the baseline scenario. The formula is:
Avoided Emissions=Emissions (Baseline Scenario)−Emissions (Product/Service)
5. Adjust for Usage and Market Penetration: Scale the avoided emissions based on the actual usage and market penetration of your product or service. For example, if your product has a market penetration of 10%, only 10% of the total avoided emissions should be attributed to it.
6. Account for System Boundaries: Ensure that the boundaries of the analysis are clearly defined and that all relevant indirect effects are considered. This includes potential rebound effects, where the increased efficiency leads to increased usage.
7. Document Assumptions and Methodologies: Keep a detailed record of all assumptions, methodologies, data sources, and calculations used in the process. This documentation is crucial for transparency and credibility.
8. Verify and Validate: Where possible, seek third-party verification or validation of your Scope 4 emissions calculations to enhance credibility and ensure accuracy.
Let's say your company produces an energy-efficient LED light bulb, and you're calculating the avoided emissions compared to traditional incandescent bulbs.
Scope 4 emissions reduction opportunities arise from the development and deployment of products or services that enable other entities to avoid or reduce their greenhouse gas emissions. Here are some key areas where these opportunities can be found:
Understanding and implementing scope 4 emissions strategies is essential for companies committed to making a tangible difference in the fight against climate change. By focusing on avoided emissions, businesses can not only highlight the positive impact of their products and services but also drive innovation and market transformation toward more sustainable practices.
Schedule a call with an expert to learn about Net0's sustainability tools and how our advanced AI-first solutions help you strategize for mitigating scope 4 emissions.
