The standardisation of carbon reporting has become a go-to business practice, in an attempt to rectify our current climate and environmental crisis. Many countries across the globe have opted into the mandatory reporting of this CO2e in the hope of unifying all businesses and government efforts to reach that one global goal.
From this, many of us are aware of the business requirements and policies on reporting on Scope 1 and 2 (possibly 3) emissions. However, with a global goal that is overarching every aspect of business, political, and consumer lives, there has been an evolution into the next step of Scope Reporting.
Its unofficial name, Scope 4, aka Avoided Emissions, is now bringing further transparency and business actions to avoid the creation of emissions, rather than just reducing them. As this Scope is still fairly new in comparison to the rest, more businesses are getting to grips with what Scope 4 actually is.
Yet with this, there are challenges with Scope 4 reporting, gaps in its current design that can be manipulated by businesses who want to gain from its benefits without accurately tracking the avoided emission data. From this, there has been a discussion on whether Scope 4 is another form of Greenwashing.
However, the original purpose of the Scopes was to bring one standardisation of carbon reporting. As Scope 4 emissions reporting is still in its infancy, if we recognise these gaps, see how to accurately report and educate businesses and consumers about greenwashing (how to spot it and its negative effects), we can then use this evolution of Scope reporting to enhance the global and business commitments to reach our environmental goals.
This article aims to give an overview of these points, discussing greenwashing and scope 4.
Greenwashing
Modern consumers are using their wallets to vote for brands and products that add further value into society. Through the age of information, consumers are being shown the wider implications of their purchases. So as a response many consumers actively seek to support brands and organisations that work towards their values and concerns.
The biggest trending concern across many different demographics is the protection of our environment and the implications of climate change. So many consumers want to see brands who are leading the way in eco policies and standards. This drive from the public has led to a rise of businesses adopting more eco-policies and procedures.
Although the majority of businesses are genuine in their attempts towards sustainability, and share the values of the public, there are some organisations who are leveraging this eco-trend as a marketing tool, to keep potential customers onside.
First coined in the 1980’s Greenwashing is when a business is misleading the public or simply lying about their eco-credentials and policies. Greenwashing tactics can cover a wider range of tactics, from symbolism (use of green and leaves for example), certification from 3rd parties, language that implies eco-value or is vague and shouting about their eco-initiatives, whilst still quietly carrying out their non-eco procedures.
Greenwashing and Scope 4
As discussed in an earlier article, Scope 4 reporting is beneficial towards helping us reach our global sustainable goals, and has been discussed to have business benefits. Businesses reporting on their Scope 4 can attract possible investors, build stronger relationships with their consumers, and stand out from the competition. With these clear business benefits, more businesses are taking the time to get to know how Scope 4.
Due to its potential business benefit, there has been an uptake of interest around Scope 4. Although many businesses are genuine in their reporting, as it is not yet fully established and clear (like the other Scopes) it has a heightened risk of Greenwashing. Here are some reasons why Scope 4 is being linked to Greenwashing tactics:
1. Framing
Positioning your messages, your data, and how your business is actually doing, has always been a part of Greenwashing. Framing your business to look like it's doing better (in regards to its environmental policies and impact) rather than showcasing the entire picture. Now this has always been a tactic of Greenwashers, however, the lack of unity with Scope 4 emission reporting has opened the door to Greenwashers. Companies can be at risk of tunnel vision, when it comes to avoided mission, with them just focusing on the product and not its entire lifecycle, making their report incomplete.
2. Accurate Comparisons
A lot of avoided emissions are based on a market average, rather than a specific competitor, making the switch misleading. Even self-comparison across their own products, can be a problem for framing, when companies are stating their new product is better for avoiding emissions, compared to their older models – yet they don’t disclose the full information on the other products.
3. Accuracy in data
As avoided emissions, are emissions that were never created, the basis of reporting on them is essentially an estimation, rather than pure statics. However, as there is yet to be one agreed standard of Scope 4 reporting, the benchmark to rate these estimations is infrequent – creating different results from the same data. Businesses can use their best results from the different standards out there, rather than all businesses posting their results from the same standards.
4. Impact
As there are not clear guidelines, there is a chance that businesses are focusing on the market size of the product – over its actual impact. Even over-estimating the impact by not thinking about how society changes. For example, you report avoided emissions due to your remote working policy, however, these numbers are overcompensated as you didn’t factor in the at-home emissions from your remote workforce (utilities like charging laptops, boiling kettle, etc).
Issues with Greenwashing
We all know that to lie or mislead is a bad thing. However, with Greenwashing it can have serious repercussions. Modern B2C relationships are built on trust and value, if one organisation breaks the trust through manipulation and lying – consumers can be sceptical and even disbelieve in the efforts of any sustainable business efforts/actions.
This can affect the whole sustainable movement, as those greenwashed products are still having negative effects on their environment, thus undermining the efforts of the sustainable movement.
Yet in terms of Scope 4, as there are gaps and already premade associations with Greenwashing, GHG Protocol in their Avoided emissions survey found that 21% of their respondents, thought that creating a demand for avoided emissions would just further validate greenwashing.
This is why there needs to be further discussions over the gaps and lack of standards interactionally regarding Scope 4 before people lose complete trust in it. If we don’t continue to push for these better reporting metrics, then those environmental benefits of Scope 4 reporting will be lost.
How to avoid Greenwashing with Scope 4
Whether you’re a business leader or a member of the public – it would be beneficial for all stakeholders to understand how to avoid greenwashing when looking into scope 4.
Setting Standards
The standardisation and collective metrics of CO2e emissions are exactly what Scope Emissions were designed to do. They were created to bring one standard across countries, industries, and businesses – so everyone could be held to the same level of accountability. This is what needs to happen for Scope 4 emissions.
Accepting one universally based standard, metrics, data collection, and laying out the overall picture of the products before they can publish their Scope 4 findings is needed. Within this standard set:
- Fair and Accurate Comparisons – e.g. not comparing apples with pears
- Clear mapping out of each stage of the product's lifecycle.
- Consider the wider behavioural changes of society. E.g. working from home saves transport emissions, however, think about the increase of utilities in the home. Compare them.
- Understand Market Size vs Impact.
- Show your entire portfolio, not just your sustainable hits.
Find out more about these by reading more from the GHG Protocol.
Seeing it as an addition to the movement
Scope 4 emissions are great for progressing the sustainable business space, and adding further action through more transparency. However, avoided emissions are only beneficial if we continue to reduce our own impact. So scope 4 reporting should be an addition to the c02e reduction plans, rather than businesses solely focusing on this. For this to happen, the WRI should first have to calculate their scope 1, 2, and 3 emissions, before calculating and disclosing their avoided emissions.
Deterrents for Greenwashing
Bringing in penalties, penalisation, and deterrents, can act as a deterrent for those possible companies Greenwashing. It can also elicit a further development of public trust, showing that there are consequences to these fraudulent actions. Using an accredited source for the reporting, genuine certifications, and abiding by set standards will help with this.
If you are a business looking into how to report on your Scope 4 emissions without the fear of greenwashing, here is a guide.
Conclusion
Businesses are following the needs and values of the public, through more sustainable driven actions. These actions can be a direct result of public outcry, or can be based on their own value set. Yet due to this current zeitgeist of environmental protection, there is an increased risk of organisations greenwashing for commercial gain. The act of greenwashing not only harms the planet, but affects the trust, relationship and actions of the environmentally active public.
Scope 4 is seen to be both beneficial for businesses and the planet alike. However as we are not yet unified in its standards, policies, and metrics, it is leaving the door open for businesses to take advantage of its benefits through greenwashing.
To maintain the benefits that Scope 4 emissions promises, there is a clear necessity for the creation of global standards on quantifying and reporting avoided emissions.
Understanding and assessing the problems at this stage, before Scope 4 takes prominence in day-to-day business practices, can help guide this CO2e reporting method to be a tool to support our progression to sustainability, rather than a greenwashing tactic.
