Many companies have extensively discussed and heard about scope 1, 2, and 3 emissions, but what are scope 4 emissions? And what role do employees play in this new realm of emissions?

Companies have been reporting on their emissions for quite some time, including efforts to reduce those with the most negative impact. While comprehensive reports on scope 1 and 2 emissions seem to be the norm, those included in scope 3 tend to create more complications. And if that weren’t enough, there appears to be a relatively new side to all of this—one that many are not even aware of.

Known as “avoided emissions,” the term scope 4 is gaining traction among organizations, highlighting how far corporate governance must strive for sustainability.

But what does this fourth installment of emission reporting entail? And why should companies consider it for their reports and emissions reduction strategies?

Scope 4 Emissions and the Role of Employees

Scope 4 emissions are commonly known as “avoided emissions.” In some cases, they have also been described as “work-from-home emissions,” which already hints at the importance of employees in this aspect of reporting.

Before we delve further, let’s briefly recap the definitions or implications of scope 1, 2, and 3 for a company’s emissions report:

Scope 1: Direct emissions—those caused by a company’s operations involving assets it owns or controls.

Scope 2: Indirect emissions resulting from the energy production purchased by the organization.

Scope 3: Indirect emissions beyond the company’s control, occurring within the broader value chain.

Now that this is clear, let’s understand what scope 4 emissions are and why companies should start considering them for their sustainability reports and overall strategies.

Avoided Emissions

As mentioned earlier, scope 4 emissions are commonly known as “avoided emissions.” They refer to emission reductions occurring outside the product’s lifecycle or value chain directly due to the use of that product or service.

These emissions also include “work-from-home emissions,” such as those created to keep laptops running or maintain central air conditioning or heating systems.

An easy-to-understand example of scope 4 emissions is energy-efficient technologies. Consider a laptop manufactured with a more energy-efficient battery. Users won’t need to charge the device as frequently, ultimately reducing electricity emissions.

The second most common interpretation of scope 4 emissions relates to people working remotely from home. These emissions can be considered avoided because not having to commute or travel for business purposes helps reduce emissions.

Why Should Companies Report Scope 4 Emissions?

While reporting on scope 4 emissions is not mandatory and, in some cases, not even considered a relevant element in a company’s emissions report, we believe there is significant potential for improving a company’s sustainability performance. Therefore, companies should take a moment to reflect on their scope 4 emissions. In other words, scope 4 can help many companies enhance their awareness and accountability for sustainability.

But why should companies report seemingly unrelated emissions within scope 4? The answer is quite simple: the sustainability challenge is so vast that every element and individual in the emission chain matters. This includes emission reduction goals and the objective of limiting global temperature increase—critical targets we must achieve before it’s too late. The power companies wield in this context carries great responsibility and requires significant innovation.

Measuring and managing scope 4 emissions provide an excellent arena for innovation. More importantly, it offers a holistic approach to a company’s emissions. For instance, a company’s product may initially generate more emissions during production, but over time, it could demonstrate significant reductions in scope 4 emissions.

Engaging Employees in Sustainability

No single institution, organization, or actor in society can tackle the magnitude of work needed to save our planet and well-being. The only way to achieve environmental and social goals is by working together.

This is precisely why involving employees in sustainability strategies—equipping them with tools to live more sustainably, raise awareness, and measure their impact—is as crucial as improvements made for scope 1, 2, and 3 reporting.

Employees, far from being indifferent to sustainable efforts, seek opportunities to actively participate and find purpose in making a positive impact through their work.