Scope 4 Emissions

Scope 4 emissions is an informal term for avoided emissions: the emissions reductions that occur outside a company’s value chain when customers use its products or services instead of a higher-emitting alternative. It is not an official category under the GHG Protocol, which defines only Scopes 1, 2 and 3.

The term matters because it gives companies a way to show the climate benefit their products can deliver beyond their own footprint. Avoided emissions are calculated against a baseline scenario, an estimate of what would have been emitted without the product. They therefore rely on assumptions and are harder to verify than Scope 1, 2 and 3 data. For this reason, they should be reported separately and never netted off against a company’s Scope 1, 2 or 3 totals.

For example, a manufacturer of high-performance insulation might estimate the heating energy its customers save compared with standard insulation. Those savings are the manufacturer’s avoided emissions, but its own reported footprint stays the same.

Avoided emissions are also different from carbon removals, which actively take CO₂ out of the atmosphere. They are also separate from avoidance credits bought in carbon markets. When buying carbon credits, the distinction between carbon avoidance and carbon removals is important when making climate claims. Scope 4 claims sit alongside a company’s emissions reduction efforts, not in place of them, and are increasingly scrutinised by regulators, investors and standard-setters.

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