Avoided emissions: Scope 4 as the new frontier in Climate Governance

December 18, 2025 / Flávia Tostes, Lucas Buzatto and Lucilia Fernandes

In recent years, the debate on sustainability and environmental responsibility has gained strength in the business sector. Companies operating in high-carbon segments are increasingly being called upon by investors, regulators, and society to demonstrate concrete actions toward decarbonization.

Traditionally, greenhouse gas (GHG) emissions are classified into three scopes (1, 2, and 3). But there is a new concept gaining ground, Scope 4, also known as avoided emissions. It represents the positive impacts generated by the use of products or services that help reduce emissions in other sectors or contexts.

Why is Scope 4 important?

Although it is not yet officially recognized by standards such as the GHG Protocol, Scope 4 has been discussed by institutions such as the World Resources Institute (WRI), the World Business Council for Sustainable Development (WBCSD) and the Net Zero Initiative (NZI). The idea is simple, if a company offers a solution that helps other sectors to emit less carbon, this should be valued.

Three main approaches have been used: WRI (2019) proposes two forms of calculation, one simpler (comparing similar products) and the other more comprehensive (considering systemic impacts). The WBCSD & NZI (2023) approach brings clear criteria for declaring avoided emissions, such as alignment with climate goals and real impact on decarbonization. Finally, the Avoided Emissions Framework – AEF (2020) focuses on technological innovation and strategic planning, considering future scenarios and behavioral changes. All these methodologies reinforce the importance of transparency, accuracy, and traceability in the data reported.

What does this mean for companies?

Adopting Scope 4 measurement practices can bring several benefits, such as: strengthening climate governance; greater attractiveness for ESG investors; strategic positioning in the face of new regulatory requirements; and effective contribution to the climate neutrality agenda.

Despite the advantages, it is essential to be aware of the risks and limitations associated with measuring avoided emissions. They are:

Lack of standardization: there is no consolidated official methodology, which can generate inconsistencies and make it difficult to compare between companies.

Risk of double counting: in collaborative solutions, more than one company can claim the same avoided emissions, compromising data integrity.

Greenwashing: without clear criteria, there is a risk of exaggerated or unfounded claims, which can damage the company’s reputation.

Methodological complexity: more robust approaches require detailed data, lifecycle analyses, and consideration of indirect effects such as the rebound effect.

Basic inventory as a prerequisite: B
before reporting Scope 4, it is critical that Scope 1, 2, and 3 inventories are complete and audited.

Scope 4 opens up new possibilities for companies that truly contribute to global decarbonization. However, its use requires responsibility, technical rigor, and commitment to data integrity. By adopting this approach with caution and transparency, companies can strengthen their position in the energy transition and respond to the new demands of the market and society.

Aware of the importance and complexity involved, WayCarbon is closely following the technical and regulatory discussions on Scope 4, with the aim of guiding its clients in the adoption of responsible, transparent practices in line with the best available methodologies. By supporting this journey with technical rigor and a commitment to data integrity, we reinforce our role as a strategic partner in building sustainable solutions and promoting a low-carbon economy.