Beyond Scope 1, 2, and 3

Scope 1 covers a company's direct emissions, from its own facilities and vehicles. Scope 2 covers emissions from purchased electricity, steam, heat, or cooling. Scope 3, first published as a standard in 2011, covers emissions across 15 categories of a company's value chain, from purchased goods and services through to the use of sold products, sitting outside the company's direct control.

Avoided emissions, sometimes informally called Scope 4, is not an official GHG Protocol scope category at all. It refers to emissions reductions that occur outside a company's value chain because someone else used its product or service, compared to what would have happened under a counterfactual baseline scenario without that product or service.

The distinction matters because Scope 1, 2, and 3 use attributional accounting, measuring emissions that actually occurred and can be traced to a company's operations. Avoided emissions use consequential accounting, modeling a hypothetical difference against a scenario that never happened. These are fundamentally different kinds of numbers.

Avoided emissions measure something genuinely different from Scope 1, 2, and 3: a modeled comparison against a scenario that never occurred, rather than emissions a company actually caused. That difference is exactly why the number needs its own disclosure treatment, not a place inside the standard inventory.

Until the GHG Protocol's Actions and Market Instruments guidance moves from draft to finalised standard, boards asking about Scope 4 should treat every avoided emissions figure they see as a claim to be checked, not a number to be taken at face value.