As climate concerns continue to grow, organisations are becoming more rigorous in how they track and reduce emissions. While Scope 1, 2, and 3 emissions are well-established in carbon accounting frameworks, a lesser-known but increasingly important category is emerging: Scope 4 emissions. These represent a forward-looking approach to emissions tracking, one that highlights the avoided emissions resulting from climate-positive products or services.
In this article, we explore what Scope 4 emissions are, why they matter, and how your organisation can begin to understand and engage with them as part of a more complete sustainability strategy.
What Are Scope 4 Emissions?
Scope 4 emissions, also referred to as avoided emissions, are indirect greenhouse gas emissions that are prevented or reduced through the use of a product or service. Unlike Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased energy), and Scope 3 (value chain emissions), Scope 4 does not reflect emissions generated, it reflects emissions avoided.
For example, a company that manufactures solar panels or electric vehicles might claim Scope 4 for the emissions avoided by customers using those low-carbon alternatives instead of fossil-fuel-based systems.
Why Scope 4 Emissions Matter
Including Scope 4 in carbon accounting offers several advantages:
- A fuller picture of climate impact: It accounts not just for emissions generated, but also for emissions a company helps to prevent.
- Recognition for climate-positive innovation: Companies investing in low-carbon solutions can demonstrate how their offerings support global emissions reductions.
- Alignment with climate goals: Scope 4 reporting supports broader net zero and decarbonisation targets by quantifying the positive downstream impacts of sustainable technologies.
This additional layer of reporting can strengthen an organisation’s ESG credentials and strategic narrative, especially in sectors where product use has a meaningful climate impact.
Examples
To understand Scope 4 more clearly, here are several examples of avoided emissions in action:
- Renewable energy equipment: Wind turbines or solar panels avoid emissions that would have occurred from fossil-based energy production.
- Energy-efficient appliances: An energy-saving air conditioner avoids emissions compared to a conventional unit.
- Digital solutions: Video conferencing tools reduce the need for business travel, avoiding travel-related emissions.
- Sustainable packaging: Compostable or reusable packaging avoids the emissions of landfill or incineration.
Each of these examples demonstrates how Scope 4 are inherently linked to the impact of product use rather than the production process itself.
Challenges in Measuring Scope 4
Despite their growing relevance, this emerging Scope 4 category is not yet part of most regulatory frameworks, and it presents a number of challenges:
- No global standard: There is currently no universal methodology for calculating avoided emissions, leading to inconsistencies.
- Risk of double counting: Multiple companies may claim the same avoided emissions if supply chain boundaries are unclear.
- Data uncertainty: Estimating future or theoretical emissions reductions can be speculative without robust usage data.
These challenges have led to Scope 4 being considered “voluntary” for now, but several initiatives, including the GHG Protocol and World Economic Forum, are exploring standardised reporting approaches.
The Future of Scope 4 in Sustainability Reporting
The avoided‑emissions concept are increasingly discussed in climate disclosure and corporate sustainability conversations. As businesses look to articulate their positive climate impact, avoided emissions will likely become more relevant, especially in industries built around low-carbon innovation.
While formal standards are still evolving, forward-thinking organisations can begin exploring Scope 4 frameworks now to:
- Gain a strategic advantage in ESG positioning.
- Show alignment with science-based targets and global climate goals.
- Prepare for future reporting expectations.
Conclusion
Scope 4 represent an important evolution in carbon accounting. By measuring avoided emissions, companies can better demonstrate how their solutions contribute to the decarbonisation of the broader economy. Though not yet mandatory, understanding Scope 4 today can position your organisation as a climate leader tomorrow.
FAQ
What is scope 1, 2, 3 and 4 emissions?
Scope 1, 2, 3, and 4 are labels for different types of greenhouse gas emissions linked to a company’s activities. Scopes 1, 2, and 3 are defined by the Greenhouse Gas Protocol, while Scope 4 is a newer, voluntary concept. Scope 1 covers direct emissions from sources the company owns or controls, such as fuel burned in company vehicles or on-site boilers. Scope 2 covers indirect emissions from purchased energy, like electricity or heat used in buildings. Scope 3 includes other indirect emissions across the value chain, for example supplier manufacturing, employee travel, and product use. Scope 4 refers to avoided emissions, such as those prevented when customers use a company’s low-carbon or energy-saving solutions instead of more carbon-intensive alternatives.
How is Scope 4 different from Scope 1, 2, and 3 emissions?
Scopes 1, 2, and 3 describe greenhouse gas emissions a company generates directly or indirectly through its operations and value chain. Scope 4 is different because it focuses on avoided emissions: the reductions that occur outside the company’s own footprint when its products or services replace more carbon‑intensive alternatives. In short, Scopes 1, 2 and 3 measure what a company emits, while Scope 4 looks at what it helps others not emit.
What are examples of Scope 4 emissions in practice?
Scope 4 typically arise when customers use low‑carbon solutions instead of conventional options. Examples include solar panels and wind turbines that displace fossil‑fuel electricity, energy‑efficient appliances that reduce power consumption, video conferencing tools that avoid business travel, and reusable or compostable packaging that cuts waste and associated emissions. In each case, Scope 4 refers to emissions that would have happened in a “business‑as‑usual” scenario, but are avoided thanks to the cleaner alternative.
Why do Scope 4 matter for sustainability reporting?
Scope 4 matter because they capture the positive climate impact of products and services, not just the emissions a company produces. Reporting avoided emissions helps organisations demonstrate how their solutions contribute to decarbonisation beyond their own operations, which can strengthen ESG narratives, support investor and stakeholder expectations, and highlight climate‑positive innovation. When done transparently and with robust methods, Scope 4 can complement traditional Scopes 1, 2 and 3 reporting rather than replace it.
Are Scope 4 part of official standards like the GHG Protocol?
Scope 4 is not yet an official category in major standards such as the Greenhouse Gas Protocol, which formally recognises only Scopes 1, 2, and 3. However, several initiatives linked to these frameworks provide guidance on estimating and disclosing avoided emissions, and treat Scope 4 as a voluntary, supplementary lens. Best practice is to report Scope 4 separately from Scopes 1, 2 and 3 and clearly explain assumptions, scenarios, and methodologies to avoid confusion or double counting.
Should our company start reporting Scope 4 emissions?
Whether you should report Scope 4 depends on your products and data maturity. If your offerings clearly help customers reduce emissions and you already have a solid accounting process for Scopes 1, 2 and 3, adding carefully defined Scope 4 metrics can enhance your climate story and ESG positioning. If your underlying data is weak, or the avoided emissions are hard to substantiate, it is usually better to focus first on improving measurement and reduction of Scopes 1, 2 and 3 before making Scope 4 claims.
