Strategic Focus: The Contingent Use of Scope 4 Avoided Emissions For Low-Carbon Storytelling

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Executive Summary

Scope 4, or avoided emissions, quantify the theoretical GHG reductions from using less carbon-intensive products or services. However, accurately measuring these emissions is challenging, due to reliance on speculative assumptions and the difficulty of proving direct emission reductions. Despite these issues, avoided emissions narratives help organizations quantify contributions towards low-carbon product design and supply chains, as well as towards climate-positive solutions. Transition risk assessments incorporating avoided emissions offer strategic insights for aligning with a low-carbon economy, albeit with acknowledged estimation limitations.

Table of contents

Scope 4 avoided emissions are a fuzzy proxy for a low-carbon future
Scope 4 avoided emissions measurement has significant limitations
Firms should apply Scope 4 emissions calculations for well-vetted, low-carbon strategy decisions

Table of figures

Figure 1. Avoided emissions: definitions and examples from different sectors
Figure 2. Avoided emissions and assumptions that can reverse them
Figure 3. Choice of base case for comparison can lead to huge differences in avoided emissions
Figure 4. WBCSD’s three gates and nine reporting principles for avoided emissions claims

About the authors

Adam Barnard

Principal Analyst

Adam is a Principal Analyst in the Verdantix Net Zero & Climate Risk practise. Prior to joining Verdantix, Adam was a Director at an environmentally focused US investment firm. Adam has previously held roles in London in investment management at Man Group, UBS and Morgan Stanley and in strategy at SABMiller in South Africa. Adam holds a Masters from Yale with a concentration on investment and the environment, a MBA with a concentration on impact investing and sustainability and a BCom(Honors) in Economics and Finance from the University of Cape Town

Ryan Skinner

Research Director, Net Zero & Climate Risk
Ryan is the Research Director for the Verdantix Net Zero & Climate Risk practice. He guides the research team to develop compelling research at the intersection of net zero strategies, carbon management, climate risk and technology. Prior to joining Verdantix, Ryan was a principal analyst at Forrester Research, where he initiated the research into ESG data and analytics offerings. He also has extensive experience of helping software companies with their messaging, positioning, market and technology strategies. Ryan studied at Duke University, the University of Manchester and the University of Oslo, and speaks Norwegian fluently.

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