Defining Scope 4 Emissions

Two people in hard hats stand inside a dimly lit corridor, talking. The image has text "Defining Scope 4 Emissions" and a company logo.

Greenhouse gas (GHG) emissions have been classified into different scopes to help businesses understand their environmental impact and take actions to reduce their carbon footprint. Scopes 1, 2 and 3 are increasingly getting recognition and taken into account by businesses, individuals and governments in their sustainability efforts. However, a more recent concept that is still not broadly known is scope 4.

We believe this last scope adds an important layer in the proactive approach to emissions reductions and it needs to be a focus in order to measure the avoided emissions when making wise decisions.

This article will help you grasp the concept of scope 4 and explain why it is relevant in lowering GHG emissions.

What are Greenhouse Gas Emissions?

Greenhouse gas emissions are the gasses released into the atmosphere, which contribute to the greenhouse effect and global warming. Human activities, such as burning fossil fuels and deforestation, have significantly increased atmospheric GHG concentrations.

The GHG Protocol, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), provides a standardized framework for measuring and managing GHG emissions. It addresses seven major greenhouse gasses, including:

  • Carbon dioxide (CO2)
  • Methane (CH4)
  • Nitrous oxide (N2O)
  • Hydrofluorocarbons (HFCs)
  • Perfluorocarbons (PCFs)
  • Sulfur hexafluoride (SF6)
  • Nitrogen trifluoride (NF3)

These emissions are officially categorized in three scopes: scope 1, scope 2 and scope 3.

Scopes 1, 2 and 3 Emissions

Scope 1 emissions are direct emissions from sources an organization owns or controls, including on-site power generation, fossil fuel heating and the release of chemical refrigerants.

Scope 2 emissions, on the other hand, are associated with purchased electricity, heating, and cooling, originating from external sources like the grid, power purchase agreements, or district heating and cooling systems.

Scope 3 emissions represent the most extensive and complex category, encompassing indirect emissions from activities both up and downstream of the organization. This includes supply chain emissions, waste management, water usage, customer emissions and business travel.

In a previous article, we have covered everything you need to know about scopes 1, 2 and 3 emissions. Click here to learn more!

What are Scope 4 Emissions?

Scope 4 emissions are often referred to as «avoided» emissions. The World Business Council for Sustainable Development defines avoided emissions as the reduction in greenhouse gas emissions achieved by implementing a solution compared to the emissions that would have occurred without that solution.

Time plays a big role in measuring and reporting avoided emissions. The time topic is important to consider for measuring the need to replace materials (including the act of demolition, the waste or recycling if possible, and reinstallation). It is also important to consider this factor for better performance and lower maintenance over time.

Unlike GHG inventory assessments (scopes 1 – 3), which focus on the variation of a company’s inventory emissions between two points over time, avoided emissions focus on the difference in emissions between two scenarios – one associated with the solution (the one that will be taking place), and one without. It is important to mention that measuring and reporting scope 4 should also focus on demonstrating, scientifically, how the decisions made are better for the environment.

While scope 4 is a newer concept that is not officially included in the GHG Protocol, its adoption is gradually growing as it provides businesses with an innovative and proactive approach to mitigate their environmental impact. Scope 4 should be considered in addition to scopes 1, 2 and 3 in a company’s ESG strategy.

Examples of Scope 4 Emissions

Examples of how to tackle scope 4 emissions will vary from industry to industry but they all include a thoughtful process of estimation to inform decision making when designing and implementing procedures or systems. These informed decisions will generate solutions that make use of longer-lasting, lower-carbon materials or adopt technology to offset carbon emissions. Thus, by estimating the GHGs that would be emitted without their solution, businesses can report on avoided (scope 4) emissions resulting from their implementation.

Difference Between Scope Emissions

Here is a diagram to better illustrate the difference between scope 1, 2, 3 and 4 emissions:

This infographic explains four scopes of greenhouse gas (GHG) emissions: scope 1 direct, scope 2 somewhat indirect, scope 3 indirect, and scope 4 avoided emissions, with brief descriptions for each scope.
Why Scope 4 Emissions Matter

While measurement, tracking and reduction of scope 1, 2 and 3 emissions is critical, a focus on scope 4 emissions incentivizes companies to innovate to become lower-carbon service providers. Therefore, reporting on Scope 4 emissions also shows how committed an organization is to sustainability and innovation. This type of commitment provides a competitive advantage, adding value to the business.

Calculating Scope 4 Emissions

Considering the challenges of calculating and reporting scope 4 emissions, the World Resources Institute (WRI) analyzed claims made by over 300 companies across various sectors and sizes, revealing substantial variability and methodological issues in how companies measure and report avoided emissions.

The WRI report provides a set of guidelines, including five crucial do’s and don’ts for companies looking to make credible claims about the climate impact of their products. Following these guidelines is an essential step for companies to enhance the credibility of their claims, improve consumer trust, and contribute to the fight against climate change.

To effectively calculate and report avoided emissions, companies must adopt a holistic approach to sustainability that encompasses scopes 1, 2, 3, and 4, as well as the time factor to improve performance and lower maintenance costs. This strategy should not only offer complete information into the processes and methodologies used but also prioritize transparency as a foundational principle.

Scope 4 and the Data Center Industry

In this Data Center Conversations video, Bill Kleyman and Nancy Novak discuss the concept of Scope 4 and its impact on the construction and data center industries. Nancy emphasizes the importance of Scope 4 in changing the narrative and behavior within the industry. It involves a holistic approach to decision-making, encompassing four categories: product selection, design decisions, means and methods, and the use of technology. These categories help ensure that the components chosen for a project not only reduce environmental impact but also provide long-term sustainability. They discuss the importance of considering the longevity of materials and the carbon footprint of products to make informed decisions.

They also discuss how Scope 4 is important to promoting efficiency, innovation and cost-effectiveness in data center construction. Novak mentions offsite manufacturing and technology as examples of ways to improve sustainability and efficiency in the industry. Additionally, the discussion highlights the importance of considering both the internal technology within a building and the methods used to construct it. Ultimately, Scope 4 encourages a forward-thinking approach to building design and construction, with a focus on future-proofing and understanding the environmental impact of the built environment. These and other sustainable practices are at the core of our ESG strategy. 

Learn more about Data Center ESG.

Make sure to also check out our article on Scope 1, 2 and 3 Emissions.