In the fight against climate change, businesses and organizations around the world are taking steps to reduce their greenhouse gas (GHG) emissions. While Scope 1, 2, and 3 emissions are commonly discussed in sustainability strategies, Scope 4 emissions also known as "avoided emissions" have emerged as a crucial concept for assessing the true environmental impact of a company’s products and services. In this blog, we’ll explore the importance of Scope 4 emissions, their role in achieving the Paris Agreement, how to calculate them, and their integration into Life Cycle Assessment (LCA).

What Are Scope 4 Emissions?

Scope 4 emissions refer to the reductions in greenhouse gas emissions that occur as a result of the use of a product or service, but outside the product's or service’s direct lifecycle or value chain. Unlike Scope 1, Scope 2, and Scope 3 emissions, which focus on direct and indirect emissions from a company's operations and value chain, Scope 4 emissions focus on the positive environmental impacts of a product’s use phase, specifically the emissions reductions it enables in the broader economy.

For example, when a company manufactures energy-efficient appliances, the emissions from producing and distributing those appliances are classified as Scope 1, 2, or 3 emissions. However, the Scope 4 emissions come into play when consumers use those appliances and, as a result, consume less energy and therefore contribute to a reduction in carbon emissions from electricity generation. These emissions savings occur outside the company's direct value chain, but they are still directly attributable to the company’s products.

How Does Scope 4 Emissions Contribute to Achieving the Paris Agreement?

The Paris Agreement, which aims to limit global warming to well below 2°C, ideally to 1.5°C, relies heavily on large-scale reductions in GHG emissions across all sectors. Scope 4 emissions play a critical role in meeting these goals by emphasizing the positive impact of products and services in reducing overall emissions. Here’s how Scope 4 emissions contribute:

• Expanding the Scope of Sustainability Efforts
  While Scope 1, 2, and 3 focus on a company’s direct emissions, Scope 4 highlights how a product or service can reduce emissions beyond its own lifecycle. For instance, products that lower energy consumption or reduce reliance on fossil fuels lead to avoided emissions that support the global effort to mitigate climate change.
  
• Supporting Carbon Neutrality
  By taking Scope 4 emissions into account, businesses can better assess their net impact on the environment. Products that enable significant emission reductions during their use phase, like electric vehicles or solar panels, play an essential part in achieving carbon neutrality, a key target of the Paris Agreement.
• ‍Promoting Circular Economy Models
  Scope 4 also promotes the idea of the circular economy, where products and services are designed not only to minimize environmental impacts during their production but to create lasting positive impacts during their use. This transition aligns with the goals of the Paris Agreement by encouraging practices that go beyond mere emission reductions and focus on system-wide sustainability.

How to Calculate Scope 4 Emissions

Calculating Scope 4 emissions can be complex, as it involves indirect emission reductions that result from the use of a product or service. However, there are two main approaches to estimating Scope 4 emissions:

• Attributional Approach
  This method involves comparing the environmental impact of a product to a reference product. For example, an energy-efficient LED bulb would be compared to a traditional incandescent bulb. The difference in energy consumption between the two and the associated GHG emissions reductions during their use phase would represent the Scope 4 emissions for the LED bulb.
  
  
• Consequential Approach
  The consequential approach looks at the broader system-level effects, considering market changes, shifts in consumer behaviour, and industry-wide dynamics. For instance, a company promoting remote work could measure the avoided emissions from reduced commuting, as well as the energy savings from smaller office spaces. This approach provides a more comprehensive analysis of the ripple effects a product or service has on the larger environment.

Both approaches are valuable, but businesses need to ensure consistency in their methodologies to maintain transparency and accuracy in their sustainability reporting.

Steps involved in measuring Scope 4 emissions

Role of Scope 4 in Life Cycle Assessment (LCA)

Life Cycle Assessment (LCA) is a process used to evaluate the environmental impacts associated with all stages of a product’s life, from raw material extraction to production, use, and disposal. Traditionally, LCA focused on Scope 1, 2, and 3 emissions, which track direct and indirect emissions from production, energy consumption, and supply chain activities.

However, Scope 4 emissions significantly enhance the LCA by providing a more holistic view of a product’s environmental impact. By factoring in avoided emissions, businesses can assess the long-term benefits of a product’s use phase, not just the emissions from its lifecycle.

Best Practices when Reporting Scope 4 emissions

How Scope 4 Enhances LCA:

• A More Complete Environmental Picture: Scope 4 emissions provide insights into how a product’s use phase leads to a reduction in emissions beyond its production. This helps businesses assess the true sustainability impact of their products.
• Accurate Comparison of Products: By including Scope 4 emissions, companies can compare different products or technologies (e.g., comparing an energy-efficient appliance with a traditional one), factoring in not only the emissions from production but also the positive impact of reduced emissions during use.‍
• Informed Decision-Making: Scope 4 emissions allow companies to prioritize the development of products that lead to significant emission reductions. These products can drive long-term sustainability and ensure businesses are meeting their environmental goals, as well as global targets like those set by the Paris Agreement.

Scope 4 emissions are a crucial component of the sustainability puzzle. By recognizing the avoided emissions from the use phase of products and services, companies can play a significant role in achieving global climate goals, including the Paris Agreement targets. Through accurate calculation and integration into Life Cycle Assessments, Scope 4 emissions provide a more comprehensive understanding of a company’s environmental impact.

With consulting services offered by Desapex, businesses have the tools and expertise needed to align their strategies with sustainability goals, reduce their carbon footprint, and contribute to a net-zero future.

Our Organization is at the forefront of helping businesses achieve net-zero emissions and meet their sustainability goals through its comprehensive Net-Zero Consulting services. With expertise in energy modelling, carbon auditing, and strategic sustainability planning, we empower organizations to significantly reduce their carbon footprint and contribute to the global fight against climate change.

Are you ready to reduce your Scope 4 emissions and make a significant environmental impact? Let’s work together to build a sustainable future.