With the introduction of new sustainability directives, such as CSRD, the scope of companies subject to reporting obligations is expanding more and more, and environmental sustainability inevitably becomes an increasingly well-known topic for those who do business.
Many companies have become familiar with the concept of Scope 1, 2 and 3 emissions (although the difficulties in reporting are still evident), but there is another category of issues that is starting to gain attention: Scope 4 emissions.
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What do Scope 4 emissions mean?
The term”Scope 4“is relatively new and not yet fully defined globally. It is a metric introduced by World Resource Institute in 2013 and, unlike Scope 1, 2 and 3, highlights thepositive environmental impact of a company's products and services.
In practice, the Scope 4 of a company refers to emissions avoided or saved from its customers thanks to the performance of its products or services.
This new category of emissions It is not yet officially recognized by the GHG Protocol, but it is becoming increasingly important for companies that are looking for a even more complete understanding of their environmental impact, and that they have already successfully reported Scope 1, 2 and 3 emissions.
Before continuing with Scope 4, let's do a Brief review What do Scope 1, 2 and 3 emissions represent.
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What are Scope 1, 2 and 3 emissions? A short recap
Scope 1, 2 and 3 emissions refer to different categories of greenhouse gas (GHG) emissions associated with an organization's activities. Let's emphasize that these are the 3 categories on which a company It must focus; Scope 4 is an extra calculation, besides not yet standardized.
- Scope 1: they come directly from sources owned or controlled by the organization, such as boilers, business vehicles and industrial processes.
- Scope 2: represent indirect emissions related to energy purchased and used by the organization, such as electricity, heat or steam.
- Scope 3: include all indirect emissions upstream and downstream of the value chain, i.e. those produced by suppliers and customers, such as emissions deriving from transport, waste and purchases of goods and services.
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Examples of Scope 4 emissions
Returning to Scope 4, let's try to give some examples to understand in practice what it is.
We have seen that Scope 4 represents the”avoided emissions”, so it takes into account the emission reductions that occur as a result of the use of a product or service.
For example, products and services such as intelligent energy management systems, or teleconferencing services make it possible to reduce greenhouse gas emissions thanks to greater efficiency.
Teleconferencing services, in fact, reduce the need to make business trips, avoiding emissions due to travel.
The same is true for decarbonization services offered by companies like Up2You, which allow other companies to reduce their emissions.
In practice, all products and services that reduce emissions, thanks to greater efficiency or specific functionality, contribute to Scope 4 emissions of the company that delivers them.
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How to calculate Scope 4
Again, let's remember that Scope 4 is not yet formally integrated into the GHG Protocol, and that currently there is no standardized method for the calculation of this category of emissions.
It is important that this point be clear because, in the absence of official standards and regulations, a company that communicates on Scope 4 through official channels can easily fall into accusations of Greenwashing.
However, many companies are experimenting with this calculation with models based on life cycle analysis (LCA) and comparative reduction scenarios. These approaches consider the entire life cycle of a product or service and evaluate how certain innovations or changes in processes can reduce GHG emissions.
If you wanted Evaluate Scope 4 of a product, a calculation method sensible (sensible because there is currently no standardized method) could be represented by the following main steps:
- establish a reference base;
- life cycle assessment (LCA);
- comparison with less efficient alternatives.
Let's try to go into detail about this method.
The first step is to establish a reference base, or the assessment of the emissions that would have occurred in the absence of the product or service in question.
For example, the emissions of an energy-efficient appliance would be compared to those of standard appliances. This reference base provides a reference point for Measure emission reductions obtained from the product or service.
In this sense, it is necessary to conduct an analysis LCA (life cycle analysis) to be able to compare it with the reference base, represented by the least efficient alternative.
La Emissive impact difference between the reference base and the product or service under consideration, it would therefore represent the Scope 4.
Clearly this is a simplified model, which cannot be used to officially communicate the environmental performance of a product or service. However, this approach helps to understand what Scope 4 emissions could actually represent, pending official standards and regulations.
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What would be the advantages of introducing Scope 4?
Lo Scope 4 it certainly has great potential. Introducing and regulating this category of emissions could bring numerous pluses, both for the planet and for companies.
Measuring Scope 4 emissions would align companies with more ambitious and holistic sustainability goals. In addition, being able to evaluate thepositive impact of its own products and services would lead to a proactive attitude, essential in a business landscape that is increasingly attentive to environmental sustainability.
Let's see some specific advantages of Calculation of Scope 4 emissions:
- offers a Full vision the environmental impact of a company, including the positive effects of its products and services;
- Encourage theinnovation in the design of products and services oriented to sustainability;
- Demonstrate thecompany commitment in comprehensive environmental management, improving corporate reputation.
The future of Scope 4 emissions: what to expect
The future of Scope 4 emissions is undoubtedly promising and it has a Great potential for the improvement of companies' environmental strategies. However, its full integration and widespread adoption across sectors will likely require several years.
The calculation methods represent Just a theory And the lack of standards To follow for the calculation and reporting of saved or avoided emissions represents a big challenge.
In addition, many companies are still faced with the challenge of correctly reporting their Scope 1, 2 emissions and above all of Scope 3. The calculation of the latter, in particular, still represents a Big obstacle for most companies that are faced with emissions reporting.
Since companies are still working to understand these 3 categories, integrating Scope 4 emissions into standard reporting practices could take several years. The same World Resources Institute (WRI) recommends that companies should initially focus on reckoning And the reporting Of theirs Scope 1, 2 and 3 emissions to establish a full understanding of their total emissions profile.
