Scope 4 emissions, also known as avoided emissions, are becoming an increasingly important part of the net zero conversation as organisations look beyond their direct operations to drive wider impact.
Scope 3 emissions account for up to 75 percent of total emissions for many organisations, placing the majority of impact outside direct control. This creates a growing business risk, as companies are increasingly expected to measure, manage, and reduce emissions across their value chain, driven by pressure from customers, investors, and regulation, including frameworks such as CSRD.
In this context, Scope 4 emissions (reductions enabled by an organisation’s products or services) are gaining attention as a way to demonstrate wider influence. This raises a critical question: should Scope 4 emissions form part of credible business sustainability strategies?Â
What are Scope 4 emissions?
Scope 4 emissions refer to avoided emissions – reductions in greenhouse gas emissions that occur outside your organisation’s value chain as a result of your products, services, or interventions.
In simple terms, Scope 4 answers the question: How does what we offer help others reduce their emissions?Â
Unlike Scope 1 emissions (direct emissions), Scope 2 emissions (purchased energy), and Scope 3 emissions (value chain emissions), Scope 4 is not formally defined within the Greenhouse Gas Protocol.
Examples of Scope 4 emissions include:
- A renewable energy provider enabling customers to switch from fossil fuels
- A software company reducing travel through virtual collaboration tools
- A manufacturer producing energy-efficient equipment that lowers downstream energy use
While these examples demonstrate positive impact, they are fundamentally different from emissions your organisation is directly responsible for.
Scope 4 and the net zero conversation
The rise of Scope 4 reflects a broader shift in how organisations think about value and impact.
Net zero strategies traditionally focus on reducing absolute emissions across Scope 1, 2, and 3. This remains the benchmark for credibility, particularly in the context of regulatory frameworks and reporting expectations.
However, Scope 4 introduces a more expansive perspective, recognising the role organisations can play in enabling wider decarbonisation across the economy.
This is particularly relevant for:
- Technology providers
- Renewable energy companies
- Circular economy businesses
- Organisations offering low-carbon alternatives
Despite this, most net zero standards, including those aligned with the Science Based Targets initiative (SBTi), do not allow Scope 4 emissions to be counted towards emissions reduction targets.
Instead, they are viewed as complementary, not substitutive.
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Use cases for Scope 4 in practice
While Scope 4 should not replace core emissions reduction efforts, it can provide value in several areas:
1. Demonstrating broader impact
Organisations can use Scope 4 to communicate how their products or services contribute to system-wide decarbonisation.
2. Strengthening value propositions
For businesses operating in competitive markets, avoided emissions can differentiate offerings and support customer decision-making.
3. Supporting innovation narratives
Scope 4 is particularly useful for organisations investing in low-carbon technologies or circular solutions.
4. Engaging stakeholders
Investors, customers, and partners increasingly want to understand not just how organisations reduce harm, but how they create positive impact.
Risks and challenges
Despite its potential, Scope 4 comes with significant limitations:
Lack of standardisation
There is no universally accepted methodology for calculating Scope 4 emissions, making comparisons difficult.
Risk of double counting
Avoided emissions can overlap across organisations, leading to inflated or misleading claims.
Credibility concerns
Over-reliance on Scope 4 may be perceived as a way to distract from insufficient progress on Scope 1, 2, and 3 emissions.
Regulatory uncertainty
Frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and global reporting standards currently prioritise measurable, attributable emissions – not avoided ones.
Should you include Scope 4 in your strategy?
Scope 4 emissions can play a valuable role, but only when used appropriately.
They should not be included as part of your core net-zero emissions targets or used to offset incomplete decarbonisation efforts.
Instead, organisations should:
- Prioritise reducing Scope 1, Scope 2, and Scope 3 emissions
- Use Scope 4 selectively to communicate broader impact
- Ensure transparency in methodology and assumptions
- Avoid overstating claims or using Scope 4 as a substitute for action
When applied carefully, Scope 4 can enhance your narrative, but it cannot replace a robust decarbonisation plan grounded in measurable reductions.
Conclusion
Scope 4 emissions reflect an important evolution in how organisations think about their role in the transition to net zero. They highlight the opportunity to move beyond reducing impact to enabling it.
However, credibility remains critical. A strong corporate sustainability training foundation ensures that organisations understand where Scope 4 fits (and where it does not) within a credible net zero strategy.
If your organisation is navigating the complexities of emissions reporting, decarbonisation, and ESG expectations, building internal capability is essential. Explore how ISS can support your team with practical, expert-led sustainability education designed to turn strategy into action.
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