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

By complementing the mandatory carbon footprint measurement, Scope 4 opens up a new way to measure and prove 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 standard developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), structures an organization's emissions into three scopes:

• Scope 1: direct combustion emissions
• Scope 2: indirect emissions from purchased energy
• and Scope 3: all other indirect emissions, both upstream and downstream of the value chain.

These emissions physically exist. Their sum reflects the actual carbon footprint generated by an organization. They are subject to carbon accounting based on officially defined standards. They can be precisely accounted for using a Carbon Footprint software.

Scopes 1, 2, and 3 therefore measure what a company emits. 

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

Conceptually introduced by the WRI in 2013, Scope 4 refers to greenhouse gas (GHG) emission reductions that occur outside of an organization's operational scope, but which are directly attributable to the use of its products or services.

In other words: if a company markets a solution whose adoption allows its customers to emit less than they would have otherwise, these avoided emissions constitute its Scope 4.

For example:

In each of these cases, the positive impact occurs at the customer's end, not within the company's own operations.

However, it's important to note: 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 mandate its reporting.

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, circular economy, digital sobriety, and other transition technologies.

Indeed, for their CSR departments, focusing solely on what the company itself emits is detrimental.

As soon as a company grows, its Scopes 1-2-3 mechanically increase. Scope 4 allows them 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.

Regarding CSRD, Scope 4 does not replace any ESRS E1 obligation, but it enriches extra-financial reporting on three specific points where the standard allows for voluntary and qualitative information: documentation of the transition plan (E1-1), positive impact materiality (SBM-3), and especially the quantification of climate opportunities and low-carbon revenues (E1-9).

Companies that structure their Scope 4 before it becomes mandatory will have a head start: they transform a reporting requirement into a demonstrable competitive advantage.

This is also where Scope 4 can become a innovation management tool for sustainability: it enables innovation trade-offs.

By conducting the exercise product by product, it's possible to discover that some "green" products have a much lower avoided impact than anticipated, while other secondary lines have major potential that can be developed.

Scope 4 is also an asset for investors. For them, Scope 4 is an indicator of transition potential and future value creation. They are increasingly attentive to risk reduction and contribution to the transition.

Scope 4 is a climate contribution indicator: avoided emissions can lead to a more precise estimation of the carbon impact of an investment portfolio (net contribution) and thus encourage the reallocation of capital towards developing solutions useful for the transition.

Methodology: How to calculate avoided emissions?

Reference frameworks 

While Scope 4 calculation has not yet been internationally standardized, it can nonetheless rely on robust reference frameworks:

• the Net Zero Initiative (NZI) published in June 2022 a general methodological framework for calculating and reporting avoided emissions, Pillar B
• the WBCSD published V2 of the Guidance on Avoided Emissions in July 2025. This guide currently represents the most advanced framework on the market.

Calculating avoided emissions

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

Avoided emissions = Baseline emissions – Emissions with the solution

The robustness of the calculation depends on the rigor with which the baseline scenario (baseline) is defined.

The baseline scenario answers the question: what would have happened if the product or service had not existed? What solution 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 rigorously distinguishes between:

• The attributional approach : it compares the life cycle inventories (LCIs) of the evaluated product and a reference product fulfilling the same function. This approach is more accessible but it ignores market effects (rebound effects, indirect substitution, price variations).
• The consequential approach : it measures the total change in system-wide emissions, including all indirect effects. It is more complex but it is the only one that captures the reality of systemic impacts.

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

• Scenario relevance : the baseline scenario must represent the most probable alternative, not the one most unfavorable in terms of carbon.
  
  
• Identical functional scope : the evaluated solution and the baseline scenario must provide the same service under the same conditions.
  
  
• Consideration of rebound effects : if a solution makes a service less costly (in time or money), it can lead to an increase in overall consumption, which partially cancels out the gains. These effects must be estimated and integrated.
  
  
• Traceability and transparency : all assumptions must be documented, justified, and ideally validated by an independent third party.
  
  
• Temporality : emission factors evolve over time (for example, the electricity mix has decarbonized and will continue to decarbonize). A calculation of avoided emissions must specify the reference year and, ideally, be updated regularly.
  
  

This methodological rigor ensures credibility: a company capable of presenting a documented, transparent, and validated calculation of its avoided emissions has a much stronger differentiating argument than a simple declaration of a "green solution."

This brings us to reporting and the pitfalls to avoid to prevent any risk of greenwashing.

Pitfalls to Avoid: Reporting and Greenwashing

The fundamental reporting error to avoid is believing that avoided emissions can offset, in whole or in part, the actual Scope 1, 2, and 3 emissions.

This is why ADEME and NZI prefer to speak of avoided emissions rather than Scope 4, to avoid any risk of confusion.

Indeed, placing Scope 4 on the same level as Scopes 1, 2, and 3 is methodologically incorrect:

• Scopes 1, 2, and 3 measure actual emissions, GHG flows that physically exist in the atmosphere
• Scope 4, on the other hand, measures a hypothetical differential: emissions that could have existed but did not occur thanks to a given solution.

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

Their communication must be accompanied by the detailed methodology, the assumptions made, and the reference scenario used.

Any presentation that gives the impression of a net reduction in a company's emissions balance constitutes a form of greenwashing.

The strict separation between carbon footprint and avoided emissions also allows for managing both dimensions separately: 

• reducing one's carbon footprint on the one hand
• maximizing one's positive impact on the other

which is, precisely, the ambition to achieve.

Given the risk of greenwashing accusations, many companies are already hesitant to communicate about their CSR commitments.

Avoided emissions heighten this risk, hence the importance of systematically implementing peer review processes and independent certification. A third-party audited Scope 4 is a guarantee of credibility and a sign of maturity.

Although the CSRD does not require reporting on avoided emissions in non-financial reporting, it is in Scope 4's best interest to integrate companies' decarbonization strategies immediately.

It is an indicator that helps shift CSR from a "cost center" to a "driver of performance and value creation."

By positively contributing to the decarbonization of the system, and thereby fostering independence from fossil fuels (whose supply can fluctuate due to geopolitical tensions), Scope 4 becomes a tool for managing sustainable innovation.