Making things (that don’t exist) count: A study of Scope 4 emissions accounting claims

28 March 2024

This report investigates the implications of ‘Scope 4’ emissions accounting claims, which refers to greenhouse gas emission reductions or removals due to a decision or action. This study suggests that extant Scope 4 assessments do not fit the established framework for scope-based emissions accounting, and calls for cautious claims of this nature and the need for more research.

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OVERVIEW

This report explores the challenges posed by ‘Scope 4’ emissions accounting, which refers to greenhouse gas emission reductions resulting from using a product, decision or action. It examines the interconnected dynamic relationship between quantification, commensuration, and standardisation in emissions accounting and the scope of such emissions, highlighting the lack of standardisation in calculation methodologies, raising questions about coordinative mechanism between firm and sectoral stakeholders and their decision-making processes.

The authors argue against initiatives for Scope 4 claim, which deviates from the objectives of reducing absolute emissions. The report suggests caution in interpreting claims about avoiding emissions as Scope 4 emissions and the term’s assumed legitimacy, calling for the need to standardise calculation methodologies to make them quantifiable, comparable and transparent.

The study argues that avoided emissions are not included in any global industry standards guidelines for emissions reporting and that regulator intervention in standard recipes for calculating Scope 4 emissions is required. Furthermore, it calls for collaboration with third-party organisations to aid verification and analysis of Scope 4 emissions calculations and make them uniform, robust and cost-beneficial.

The report concludes that measurement of carbon emissions is highly complicated due to multiple methods of estimation and the variety of framings and setting and emphasises the need for sober understanding of the dynamic relationship between quantification, commensuration and standardisation. Exploration of differentiating metrics for avoided emissions across sectors helps to highlight the differences in boundaries and challenges faced by different industries.

Overall, the study recommends that companies should focus less on Scope 4 claims and more on reducing absolute emissions through regular monitoring and reporting of greenhouse gas emissions, integrating climate risk considerations into corporate governance practices, promoting openness, building collaboration and transparency with sectoral stakeholders and policymakers.