The unavoidable greenwashing of Scope 4 emissions

It looks like Scope 4 is tailor-made for companies’ marketing departments.

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A Tesla Roadster, with Earth in the background. At the wheel is a ‘Starman’ mannequin, wearing a SpaceX spacesuit. The image was taken during the Falcon Heavy missions by SpaceX. Photo: Official SpaceX photos/flickr.

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — If you thought the accounting of Scopes 1, 2 and 3 CO₂ emissions is complicated and mysterious, leaving enormous room for greenwashing, brace yourself for Scope 4.

Scope 4 emissions reflect the difference between the carbon footprint of a company’s customers when using its goods and services, relative to what their footprint would have been if they had instead used another company’s products or services. Scope 4’s accounting requires numerous assumptions about what other products and services consumers would have used instead and how they would have otherwise behaved.

Scopes 1, 2, and 3, in contrast, focus on the direct and indirect emissions of a company’s activities and its products.

Though most have never heard of Scope 4 before, the category has actually been around at least since 2013; that’s when the concept was introduced by the World Resources Institute. Given the difficulties in accounting for Scopes 1, 2 and 3, relatively little attention has been paid to Scope 4 — so far. This appears to be changing.