Scope 4 ‘Avoided’ Emissions: More A Narrative Than A Metric

Scope 4 ‘Avoided’ Emissions: More A Narrative Than A Metric

Scope 4 emissions, commonly referred to as ‘avoided’ emissions, are attracting mounting attention but represent a significant risk for greenwashing. A 2013 paper from the World Resources Institute defines avoided emissions as “emission reductions that occur outside of a product’s life cycle or value chain but as a result of the use of that product”. Examples of products (goods and services) that they believe demonstrate avoided emissions include low-temperature detergents, fuel-saving tyres, energy-efficient ball bearings and teleconferencing services.

While Scope 4 emissions can illustrate potential greenhouse gas (GHG) reductions by using less carbon-intensive products, compared with a reference product or service, their measurement is highly circumstantial. In our Strategic Focus: The Contingent Use of Scope 4 Avoided Emissions For Low-Carbon Storytelling report, we unpack some of the key challenges and risks that avoided emissions present, namely that they are:

• Speculative in nature.
  The measurement of Scope 4 emissions relies on assumptions and comparisons to hypothetical scenarios, making them inherently speculative and challenging to quantify accurately.
  
  
• Create a risk of greenwashing.
  Due to their theoretical nature, claims of avoided emissions are susceptible to skepticism and could lead to accusations of greenwashing if not communicated transparently.
  
  
• Have limited strategic value.
  Beyond their role in enhancing firms’ sustainability narratives, avoided emissions offer limited strategic value. They should not be conflated with direct actions that reduce an organization’s carbon footprint.
  
  

However, the picture isn’t all negative – we also argue that Scope 4 emissions can be used in a few specific contexts, but only as a narrative function to craft stories. This storytelling can help shape public and investor perceptions but must be approached with caution. Specific use cases span:

• Product design and supply chain decisions: demonstrating CO₂ reductions through innovative product designs to appeal to a supply chain decision-maker.
  
  
• Fundraising in the green economy: leveraging avoided emissions data to attract green investments, supported by rigorous, standardized environmental assessments.
  
  
• Reducing long-term transition risks: using avoided emissions calculations to showcase strategic alignment with low-carbon initiatives, enhancing market fit and reducing regulatory risks.
  
  

Scope 4 emissions have a restricted but targeted role in corporate sustainability strategies. Businesses, software vendors and consumers must recognize the limitations associated with these emissions when basing decisions on them. Proper understanding and cautious use of the narratives surrounding Scope 4 initiatives will ensure that sustainability claims are responsible and substantiated.