The measurement and disclosure of Avoided Emissions—sometimes informally referred to as “Scope 4”—are rapidly gaining attention as a potential next standard in international reporting, following the inclusion of related questions in CDP questionnaires and ongoing GHG Protocol revisions. Understanding this development early and preparing proactively can become a direct driver of strategic differentiation in sustainability. This article provides an overview of the definition of Avoided Emissions, emerging international frameworks, real-world corporate examples, and approaches for leveraging Avoided Emissions to build competitive advantage.

What Are Avoided Emissions? Definition and Positioning   

As global stakeholders work toward a 2050 net-zero future, expectations are expanding beyond reducing emissions within the value chain (Scope 1–3). Companies are increasingly evaluated on how their products and services contribute to decarbonization across society. Avoided Emissions refer to greenhouse gas reductions that occur when a product or service replaces a higher-emission alternative with the same function, or when processes such as recycling prevent emissions. This concept has emerged alongside Scope 1 (direct emissions), Scope 2 (indirect energy-related emissions), and Scope 3 (value-chain emissions) (1)(2).

Avoided Emissions account for reductions outside a company’s value chain—for example, when renewable energy replaces fossil power generation or when electric vehicles reduce gasoline vehicle use (3). A practical example is an energy-efficient appliance manufacturer whose products reduce customer electricity consumption, thereby lowering CO₂ emissions. In short, Avoided Emissions quantify the broader societal decarbonization impact enabled by a company’s solutions (4).

International frameworks such as the GHG Protocol, ADEME (France), and ISO14069 do not formally recognize “Scope 4.” Instead, they use terms such as Avoided Emissions or Comparative Emissions Impact (1)(5). Despite differences in terminology, these frameworks share the same underlying principle: recognizing the emissions reductions generated using a company’s products and services (1)(6)(*7).

Global Treatment of Avoided Emissions   

Avoided Emissions are increasingly included in global reporting frameworks. For example, the 2024 CDP Corporate Questionnaire introduces Avoided Emissions–related questions for the first time, asking companies to demonstrate how their offerings contribute to emissions reductions beyond their operational boundaries (*8).

Interest is already substantial: in a CDP climate survey (2014), 70% of responding companies reported that their products or services contributed to Avoided Emissions. This trend was particularly strong in telecommunications and utilities (*9).

The GHG Protocol is now formally assessing whether to introduce Avoided Emissions guidance as part of its next framework update (10)(11). Research organizations such as WRI and WBCSD have also published reference frameworks, indicating increasing maturity and convergence (7)(9).

While methodological challenges remain—particularly around baseline setting and life-cycle modeling—the direction of global reporting practice is unmistakable. For example, companies in Japan, including Daikin Industries, Toray Industries, and Sojitz, have begun calculating Avoided Emissions as part of their carbon-neutrality strategies (*12). Similar initiatives can now be observed in Europe, the United States, and Southeast Asia.

Competitive Differentiation Using Avoided Emissions: Case Examples   

Competitive Differentiation Using Avoided Emissions: Case Examples
Several companies already treat Avoided Emissions as a strategic differentiator. In the SaaS sector, Persefoni quantifies Avoided Emissions by comparing the emissions of its cloud-based carbon management platform to traditional on-premises data centers (*5).

In manufacturing, examples from the International Council of Chemical Associations (ICCA) are particularly illustrative. One case demonstrates that replacing steel automotive bodies with high-strength resin can reduce vehicle weight and improve fuel efficiency, resulting in lower emissions during the use phase. ICCA presents this as a representative Avoided Emissions mechanism (*3).

Linking Avoided Emissions to Product Value and Corporate Value   

Measuring and disclosing Avoided Emissions is becoming an important differentiator in sustainability strategy. Quantifying a company’s contribution to system-level decarbonization strengthens credibility with investors, markets, and regulators. However, successful implementation requires careful baseline definition and alignment with evolving international standards. Because this field is evolving rapidly, continuous monitoring is essential.

cuoncrop tracks international discussions and emerging reporting practices relating to Avoided Emissions and supports companies in applying them in operational and reporting contexts. Beyond Avoided Emissions, we integrate broader environmental-impact quantification approaches, including biodiversity and nutrient-profiling methodologies. While these frameworks can be complex and resource-intensive to adopt, our My Eco Measure platform consolidates them into a practical, business-ready format. If you are exploring ways to differentiate product value through broader ecological metrics—not limited to decarbonization—please feel free to contact us.

cuoncrop ESG
Global Trend Research Division

References 

1.https://globalclimateinitiatives.com/en/scope-4-emissions-evitees-de-quoi-parle-t-on/ 

2.https://www.enecho.meti.go.jp/about/special/johoteikyo/scope123.html 

3.https://icca-chem.org/wp-content/uploads/2020/05/Addressing-the-Avoided-Emissions-Challenge.pdf 

4.https://plana.earth/glossary/scope-4-emissions/ 

5.https://www.persefoni.com/blog/scope-4-emissions 

6.https://librairie.ademe.fr/air/404-emissions-evitees-de-quoi-parle-t-on-.html 

7.https://www.iso.org/obp/ui/#iso:std:iso:tr:14069:ed-1:v1:en 

8.https://s26.q4cdn.com/888045447/files/doc_downloads/2024-CDP-Corporate-Questionnaire.pdf 

9.https://www.wri.org/research/estimating-and-reporting-comparative-emissions-impacts-products 

10.https://ghgprotocol.org/sites/default/files/2024-03/Corporate-Standard-Survey-Summary-Final.pdf 

11.https://ghgprotocol.org/blog/standards-update-process-frequently-asked-questions 

12.https://shizenenergy.net/decarbonization_support/column_seminar/avoided_emissions/