Scope 4 revolutionizes emissions management: Avoided emissions beyond Scope 1-3

In addition to the common terms Scope 1, 2 and 3, a new term is currently coming into focus: Scope 4This category, also known as "avoided emissions," offers companies a new perspective on assessing and communicating their impact on the climate. But what does it mean Scope 4 exactly, and why is it becoming increasingly important?

|  April 11, 2024

🕓 Reading time 14 minutes

Scope 4

1. What are Scope 4 emissions?

 

In the complex web of corporate climate responsibility, Scope 1, 2, and 3 are common terms that describe a company's direct and indirect emissions. But now a new term is coming into focus: Scope 4.

Scope 4emissions, often referred to as “avoided emissions” referred to, include the greenhouse gas reductions, indirectly through the use of products or services of a company compared to more conventional alternatives can be achieved. Scope 4Emissions represent the GHG emissions (Greenhouse Gas Emissions) avoided by using a company's products or services compared to conventional alternatives. This approach enables companies to not only reduce their own emissions but also make a positive contribution to the Climate protection by offering innovative products or services. Quantifying these avoided emissions opens up a new dimension of environmental responsibility and climate management.

They go beyond the direct (Scope 1) and indirect (Scope 2 and 3) a company's emissions and consider the positive impact a company has on the environment, for example by offering more energy-efficient solutions that help end users reduce their own emissions.

However, this category is not standardized and its measurement and reporting are more complex than the first three scopes.

2. Who is Scope 4 interesting for?

 

Scope 4 for all Stakeholder who are interested in a comprehensive understanding of the climate impacts of companies and who want to look beyond the traditional boundaries of Scope 1, 2 and 3 to positive effects of products and services to be considered.

Pursue

Companies that offer products or services that lead to a reduction in greenhouse gas emissions for their customers can find Scope 4 a possibility to to quantify and communicate positive impact. It enables them to paint a more comprehensive picture of their environmental impact, which can be useful for internal strategy development and market positioning.

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Investors

Investors who want to invest in sustainable companies can Scope 4 as an indicator of a company's commitment to environmental responsibility and innovation. This can play a role in the assessment of ESG (Environmental, Social, and Governance) factors.

consumer

Consumers who increasingly value sustainability can benefit from Scope 4information to make more informed decisions when purchasing products or services that lead to Reducing their own carbon footprints contribute.

Politics and regulators

Governments and policy makers can Scope 4-use data to evaluate and understand the effectiveness of environmental policies and programs, how companies contribute to achieving national or international climate goals.

3. What are concrete application examples from different industries?

 

Scope 4Emissions, or avoided emissions, offer interesting application possibilities across industries. Here are some concrete examples from various sectors:

Energy sector

A company that manufactures and installs renewable energy equipment could calculate the avoided emissions resulting from the Use of its solar panels or wind turbines compared to conventional energy sources This highlights the company's contribution to reducing greenhouse gas emissions.

technology industry

A manufacturer of energy-efficient servers and data centers could quantify how its products contribute to reducing its customers' energy consumption and thus their CO2 emissions. This is especially true when compared to older or less efficient technologies.

Automotive industry

A car manufacturer that produces electric vehicles could avoided emissions compared to vehicles with combustion engines This calculation could help highlight the potential contribution to emission reduction through the switch to electromobility.

construction industry

A company that offers energy-efficient building solutions such as offers better insulation or energy-efficient windows, could evaluate the avoided emissions due to the reduced energy demand for heating and cooling compared to standard buildings.

Consumer goods industry

A manufacturer of household appliances could Energy savings and thus the avoided emissions of its energy-efficient devices compared to conventional models. This not only helps raise environmental awareness but also informs consumers.

agriculture

A supplier of advanced fertilizers or farming methods that increase yields while reducing the need for agricultural inputs could offset the avoided emissions by reduced use of fuels, fertilizers and other resources calculate.

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4. Does Scope 4 reduce Scope 1, 2 and 3 emissions?

 

Scope 4, or avoided emissions, as well as compensations no direct impact on Scope 1, 2 and 3 emissions of a company. Instead, Scope 4 a separately reported category that measures a company's positive impact on reducing emissions outside its own operational boundaries.

Essentially, Scope 4 a way of reporting on the positive impact of a company on reducing emissions in the wider world, not a reduction of its own direct or indirect emissions. It is a tool to highlight the external benefits of a company's products or services, such as how teleconferencing services can help reduce business travel and related emissions that are outside the company's direct control.

5. According to which standard is Scope 4 accounted for?

 

Currently there is no generally accepted standard for the accounting of Scope 4emissions. Since Scope 4 a relatively new concept and is different from the traditional emission categories (Scope 1, 2 and 3) defined by protocols such as the Greenhouse Gas Protocol are well established, the guidelines and standards for Scope 4 still in development.

Companies seeking to report avoided emissions often rely on existing frameworks and standards for similar calculations, but adapt them to the specific requirements of calculating avoided emissions. This adaptation can be achieved, for example, through a detailed life cycle assessment (LCA) of products or services, measuring avoided emissions against a defined baseline scenario.

When reporting avoided emissions, companies should Transparency, consistency and verifiability to ensure the credibility of their information. Given the lack of established standards, it is important to Methodology and assumptions, on which their calculations are based, so that stakeholders can understand and evaluate the reported avoided emissions.

In the Future it is possible that more specific guidelines and standards developed to help companies calculate and report on Scope 4-emissions.

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6. How do you account for avoided emissions?

 

Avoided emissions accounting is a complex process that requires careful analysis to determine the greenhouse gas reductions achieved by using a product or service compared to conventional alternatives. First, a baseline scenario be defined as Reference point against which the avoided emissions are measured. This baseline scenario could, for example, be the industry average or the conventional product being replaced.

After Selection of the specific product or service, For the product or service for which avoided emissions are to be calculated, it is necessary to collect comprehensive data across the entire life cycle of both the product or service and the baseline alternative. This includes all phases from raw material extraction through production and use to disposal.

A Life Cycle Assessment (LCA) is carried out to determine the Determine total emissions of both scenariosThe difference between the total emissions of the baseline and those of the product or service indicates the avoided emissions.

For transparent communication, companies should report in detail how they calculated avoided emissions, including the methods and assumptions used. Since both technologies and market scenarios can change, it is important to regularly update and review these calculations. Although there are no universal standards for calculating Scope 4 It is essential for companies to use transparent, consistent and verifiable procedures to build trust with stakeholders and customers.

Avoided emissions in Scope 4 of the Corporate Carbon Footprint

At the Corporate Carbon Footprint (CCF) Avoided emissions from all relevant products and services of the company in total These then result in the Scope 4 emissions.

This includes also climate-friendly corporate practices, reduce emissions compared to traditional practices. For example, online meetings reduce the need for travel, thereby preventing emissions that would otherwise have been generated by travel.

Avoided emissions in a product carbon footprint assessment with scenario comparison

A similar approach is taken when collecting a single Product Carbon Footprint (PCF) with scenario comparison. A scenario comparison in the context of PCF accounting can compare different versions of a product or different usage scenarios to show how changes in design or usage affect the overall emissions of the individual product can influence.

 

 

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