Corporate interest in Scope 4 emissions – also known as ‘avoided’ emissions – is mounting, but there are substantial risks to incorporating these often insubstantial claims. Defined by the World Resources Institute 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”, Scope 4 measurements rely on comparisons to hypothetical scenarios. As such, while it may be tempting to draw on Scope 4 initiatives to illustrate greenhouse gas reductions, doing so could open the doors to major reputational risks.
The key challenges to be aware of when considering the role Scope 4 emissions could play in corporate sustainability strategies are:
- Inability to quantify accurately.
Scope 4 emissions are measured by comparing the performance of a less carbon-intensive product – such as low-temperature detergent or fuel-saving tyres – with a reference product or service. Relying on assumptions and hypotheticals, they are inherently speculative and near-impossible to quantify accurately. With greenwashing litigation on the rise, this metric comes up against increasing pressure for any corporate sustainability claims to be robust and auditable. - Greenwashing accusations.
Due to their theoretical nature, claims of avoided emissions are susceptible to scepticism. If clients or regulatory bodies doubt the validity of Scope 4 claims, this could lead to accusations of greenwashing and resulting reputational and financial consequences. Communicating transparently is key to reduce the risk of litigation. - Limited strategic value.
As avoided emissions cannot be conflated with actions that directly reduce an organization's carbon footprint, their strategic impact is limited. Without the ability to confidently clarify and report specific measurements, Scope 4 initiatives may lack credibility and thus provide little benefit to corporate sustainability strategies.
It’s clear that Scope 4 initiatives must be approached with caution. However, avoided emissions could still have a limited but clear role to play in sustainability initiatives: storytelling. Narratives about avoided emissions, when crafted with care and transparency, can work to influence stakeholder perceptions. Alongside rigorous, standardized environmental assessments, Scope 4 data can help organizations attract green investments, and avoided emissions storytelling at a product design stage can secure support from supply chain decision-makers. But without proper understanding of the risks and limitations of Scope 4 emissions, business leaders may undercut their own decision-making and the validity of their sustainability claims.
