Scope 4 Emissions

Scope 4 emissions, also known as avoided emissions, refer to reductions in greenhouse gases (GHG) emissions that occur outside a company's value chain as a result of the use of its products or services. Unlike the traditional scopes defined by the GHG Protocol (Scopes 1, 2, and 3), Scope 4 is not an official reporting category. However, it is increasingly used to measure the positive impact an organization generates for third parties, particularly when it develops low-carbon technologies or business models.

For example, a company that develops videoconferencing software generates Scope 4 emissions when its clients avoid air travel to meet in person. If the flight would have emitted 500 kg of CO₂ and the video call emits only 5 kg, the difference (495 kg) is considered avoided emissions.

Difference Between Scope 4 and Scopes 1, 2, and 3

The GHG Protocol classifies emissions into three official categories:

• Scope 1: Direct emissions generated from sources owned or controlled by the company (combustion, fleets, industrial processes).
• Scope 2: Indirect emissions derived from the consumption of purchased electricity, heat, or steam.
• Scope 3: Indirect emissions across the value chain (suppliers, transportation, product use, end-of-life, etc.).

Scope 4, by contrast:

• Does not measure a company's own emissions.
• Is not part of the mandatory inventory.
• Is not included in the total carbon footprint.
• Is based on a comparison with a more carbon-intensive alternative scenario.

While Scopes 1, 2, and 3 quantify the impact generated, Scope 4 estimates the impact avoided.

Scope 4 is a useful but also controversial concept. It should never be deducted from the total inventory of Scopes 1, 2, and 3. It must be reported separately to prevent misleading interpretations regarding carbon neutrality or implicit offsets.

The Importance of Scope 4 Emissions in Carbon Footprint Measurement

Although they do not replace traditional measurement, Scope 4 emissions play a strategic role in the climate transition.

Net Impact Perspective

They complement the traditional carbon footprint by showing:

• Contribution to customer decarbonization.
• Systemic emission reductions.
• Positive impact beyond the organization.

Competitive Advantage

In markets where clients must reduce their Scope 3 emissions, offering solutions that lower emissions becomes a key differentiator.

Attraction of Sustainable Investment

Investors increasingly value:

• Energy transition-enabling technologies.
• Business models with positive climate impact.
• Solutions aligned with net-zero targets.

Although regulatory frameworks such as the CSRD do not require Scope 4 reporting, they do demand transparency and consistency in climate disclosures, making rigorous methodology essential.

How to Calculate Scope 4 Emissions

The calculation is based on a comparative or baseline scenario approach.

Step 1: Define the Reference Scenario

• What technology or solution would be used in the absence of your product?
• What is its emissions intensity?

Step 2: Calculate the Footprint of the New Product or Service

This may require a Life Cycle Assessment (LCA) in accordance with standards such as:

• ISO (ISO 14040 / 14044)
• GHG Protocol

Step 3: Compare Both Scenarios

Avoided emissions = Emissions from the conventional scenario − Emissions from the new scenario

Key Considerations

• Avoid double counting.
• Justify technical assumptions.
• Clearly define system boundaries.
• Maintain methodological consistency.
• Always separate Scope 4 from official inventories.

Want to go deeper into impact measurement? Explore how our platform helps organizations structure their emissions inventories with methodological rigor.

At Manglai we help companies measure their carbon footprint and report avoided emissions transparently. Discover how Manglai can help you.

References

World Economic Forum (2022) You've probably heard of Scope 1, 2 and 3 emissions, but what are Scope 4 emissions? World Business Council for Sustainable Development (2025) Guidance on Avoided Emissions v2.0: Drive Innovations and Scale Solutions Toward Net Zero