Scope 4: Everything You Need to Know About Avoided Emissions for Your Climate Strategy

By complementing the mandatory carbon footprint measurement, Scope 4 offers a new way to measure and demonstrate the positive climate impact of a company’s products and services.

What is Scope 4? Definition and Scope

The GHG Protocol, a global carbon accounting framework developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), categorizes an organization’s emissions into three scopes:

• Scope 1: Direct combustion emissions
• Scope 2: Indirect emissions related to purchased energy
• and Scope 3: all other indirect emissions, both upstream and downstream of the value chain.

These emissions actually exist. Their total reflects the carbon footprint actually generated by an organization. They are tracked through carbon accounting based on officially defined standards. They can be accurately calculated using carbon footprint software.

Scopes 1, 2, and 3 therefore measure a company's emissions. 

Scope 4, on the other hand, measures what it prevents.

First introduced conceptually by the WRI in 2013, Scope 4 refers to reductions in greenhouse gas (GHG) emissions that occur outside an organization’s operational boundaries but are directly attributable to the use of its products or services.

In other words: if a company markets a solution that, when adopted, enables its customers to emit fewer emissions than they would have otherwise, those avoided emissions constitute its Scope 4.

For example:

In each of these cases, the positive impact is felt by the customer, not within the company itself.

Please note, however, that Scope 4 is not an official scope. Unlike Scopes 1, 2, and 3, which have been rigorously defined and regulated since 2001 (GHG Protocol Corporate Standard), Scope 4 has not yet been subject to binding international standardization.

Neither the European CSRD nor the Science Based Targets initiative (SBTi) currently requires such disclosure.

Why is Scope 4 becoming an asset?

Scope 4 addresses a real need for companies whose products or services are inherently decarbonizing: energy efficiency, sustainable mobility, the circular economy, digital frugality, and other transition technologies

In fact, for their CSR departments, focusing solely on the company’s emissions is a disadvantage.

As a company grows, its Scope 1, 2, and 3 emissions inevitably increase. Scope 4 allows companies to demonstrate that this growth is accompanied by a net positive impact on the system: calculating their avoided emissions enables them to highlight their position as low-carbon actors.

Under the CSRD, Scope 4 does not replace any of the ESRS E1 requirements, but it enhances non-financial reporting in three specific areas where the standard allows for voluntary and qualitative information: documentation of the transition plan (E1-1), the materiality of positive impacts (SBM-3), and, most importantly, the quantification of climate opportunities and low-carbon revenues (E1-9).

Companies that have established their Scope 4 reporting before the standard requires it will have a head start: they are turning a reporting requirement into a demonstrable competitive advantage.

This is also where Scope 4 can serve as a tool for steering sustainable innovation: it enables innovation trade-offs.

By analyzing each product individually, it becomes clear that some "green" products have a much smaller environmental impact than expected, while other product lines have significant potential that can be further developed.

Scope 4 is also a selling point for investors. For them, Scope 4 serves as an indicator of transition potential and future value creation. They are increasingly focused on risk mitigation and contributing to the transition.

Scope 4 is a climate contribution metric: avoided emissions can lead to a more precise estimate of the carbon impact of an investment portfolio (the net contribution) and thus encourage the reallocation of capital toward the development of solutions that support the transition.

Methodology: How to Calculate Avoided Emissions?

Frameworks 

Although the calculation of Scope 4 emissions has not yet been standardized internationally, it can nevertheless be based on robust reference frameworks:

• In June 2022, the Net Zero Initiative (NZI) published a general methodological framework for calculating and reporting avoided emissions, known as Pillar B
• The WBCSD published Version 2 of its Guidance on Avoided Emissions in July 2025. This guidance is now the most comprehensive framework available on the market.

Calculate emissions avoided

The calculation of avoided emissions is based on this seemingly simple equation:

Avoided emissions = Emissions in the baseline scenario – Emissions in the scenario with the solution

The robustness of the calculation depends on how rigorously the baseline scenario is defined.

The baseline scenario answers the question: What would have happened if the product or service had not existed? What alternative would the customer have used instead?

Two main approaches coexist in practice. They are detailed in this foundational document published by the GHG Protocol.

The document makes a clear distinction between:

• The attributional approach: It compares the life cycle assessments (LCA) of the product under evaluation and a reference product that serves the same function. This approach is more accessible but does not account for market effects (rebound effects, indirect substitution, price fluctuations).
• The consequential approach: It measures the total change in emissions across the entire system, including all indirect effects. It is more complex, but it is the only approach that captures the reality of systemic impacts.

Regardless of the approach chosen, several requirements must be met to ensure the validity of the calculation:

• Relevance of the scenario: The baseline scenario should represent the most likely alternative, not the one with the highest carbon emissions.
  
  
• Identical functional scope: The solution being evaluated and the baseline scenario must provide the same service under the same conditions.
  
  
• Accounting for rebound effects: if a solution makes a service less costly (in terms of time or money), it may lead to an increase in overall consumption, which partially offsets the gains. These effects must be estimated and factored in.
  
  
• Traceability and transparency: All assumptions must be documented, justified, and ideally validated by an independent third party.
  
  
• Temporality: Emission factors change over time (for example, the electricity mix has become less carbon-intensive and will continue to do so). A calculation of avoided emissions must specify the base year and, ideally, be updated regularly.
  
  

This methodological rigor ensures credibility: a company capable of presenting a well-documented, transparent, and validated calculation of its avoided emissions has a much stronger selling point than a mere claim of being a "green solution."

Which brings us to reporting and the pitfalls to avoid in order to prevent any risk of greenwashing.

Pitfalls to Avoid: Reporting and Greenwashing

The fundamental mistake to avoid in reporting is to believe that avoided emissions can fully or partially offset actual Scope 1, 2, and 3 emissions.

This is why both ADEME and NZI prefer to refer to “emissions avoided” rather than “Scope 4” to avoid any risk of confusion.

In fact, treating Scope 4 as equivalent to Scopes 1, 2, and 3 is methodologically incorrect:

• Scopes 1, 2, and 3 measure actual emissions—GHG fluxes that physically exist in the atmosphere
• Scope 4, on the other hand, measures a hypothetical difference: emissions that could have occurred but did not, thanks to a particular solution.

Avoided emissions must therefore be reported separately from official carbon accounting, in a separate supplementary report.

Their report must include a detailed description of the methodology, the assumptions made, and the baseline scenario used.

Any presentation that gives the impression of a significant reduction in a company’s carbon footprint constitutes a form of greenwashing.

The clear distinction between carbon footprint and avoided emissions also makes it possible to manage these two aspects separately: 

• reduce one's carbon footprint on the one hand
• maximize the positive impact of the other

which is, precisely, the goal we aim to achieve.

Faced with the risk of being accused of greenwashing, many companies are already hesitant to publicize their CSR commitments.

Avoided emissions exacerbate this risk, which is why it is important to systematically implement peer review processes and independent certification. A third-party-audited Scope 4 is a mark of credibility and a sign of maturity.

Although the CSRD does not require companies to report on avoided emissions in their non-financial reporting, Scope 4 should certainly begin incorporating corporate decarbonization strategies now.

This metric helps transform CSR from a "cost center" into a "driver of performance and value creation."

By making a positive contribution to the decarbonization of the energy system—and thereby promoting independence from fossil fuels (whose supply can fluctuate depending on geopolitical tensions)—Scope 4 becomes a tool for driving sustainable innovation.