Opinion | Close encounters of the 4th kind – Scope 4 GHG Emissions
Most likely, you have heard about scope 1, 2 and 3 GHG emissions. Recently, some of you may have experienced a close encounter of the 4th kind: Scope 4 GHG emissions. Scope 4 GHG emissions have been mentioned in the climate strategy report of PG&E, a California-based utility company. What are scope 4 GHG emissions? A new category of indirect emissions? This blog post sheds some light on how PG&E uses the term.
The GHG Protocol and Scope 1, 2 and 3 Emissions
To give some context: The Greenhouse Gas Protocol (GHG-Protocol) is an internationally accepted standard for carbon accounting. The GHG Protocol distinguishes three kinds of GHG emissions:
- Scope 1 emissions are direct emissions that have their origin in operations owned or controlled by the respective company, like combustion in owned or controlled boilers or emissions from chemical production.
- Scope 2 emission covers indirect emissions that arise from purchased electricity, steam, heating, cooling or hot water used by a company.
- Scope 3 emissions are a company’s indirect greenhouse gas emissions that are not covered within scope 2, which result from company activities but occur from sources not owned or controlled by the company.
For more information on Scope 1, 2, and 3 emissions, read our detailed blog post. However, according to the GHG protocol, there are no scope 4 emissions.
What are “Scope 4 emissions”?
The PG&E Climate Strategy Report defines “Scope 4” emissions in the context of “transitioning into a decarbonised and more climate-resilient economy” as “an emerging term for categorising emissions reductions enabled by a company. PG&E can make a significant contribution by enabling these emissions reductions in our service area”. 
So “Scope 4” emissions may fit into the category of avoided emissions.
Reducing Scope 1, 2 and 3 Emissions, then helping and supporting customers with their decarbonisation journey
PG&E follows the strategy to reduce its own Scope 1, 2 and 3 emissions and help its customers along their decarbonisation journey.
Reducing Scope 1, 2 and 3 Emissions…
PG&E commits to a climate- and nature-positive energy system by 2050:
- Net-zero energy system by 2040.
- 2030 climate goals: Reducing Scope 1 and 2 emissions by 50% from 2015 levels and reducing Scope 3 emissions by 25% from 2015 levels.
… enabling customers on decarbonisation
The report states, “Our commitment goes beyond reducing our own emissions and includes achieving substantial “Scope 4″ reductions by enabling the customers and communities we serve to reduce their carbon footprints, as well. To track progress, we will continue our rigorous effort to complete a comprehensive, verified greenhouse gas emissions inventory each year across our Scope 1, 2, and 3 emissions.” 
How PG&E plans to achieve that:
- saving 48 million metric tons of CO2 by lifecycle emissions reductions through comprehensive customer energy efficiency and decarbonisation strategies, with an increasing focus on electrification)
- reducing emissions from transportation (Transportation electrification that leads to 58+ million metric tons CO2-e / cumulative annual emissions reduction from fueling at least 3 million EVs within PG&E’s service area).
- Industrial conversion to natural gas saves 2.5 million metric tons of CO2-e as cumulative avoided emission reductions by proactively converting customers unable to electrify from higher carbon-intensity fuels to natural gas.
Scope 4 Emissions – Just a marketing stunt?
Coming up with a term like “Scope 4” emissions that may imply a direct relationship to the GHG Protocol may sound like a marketing stunt.
Scope 1, 2 and 3 emissions are, well, emissions that establish a company’s carbon footprint.
On the other hand, actions that fall under the category of what PG&E describes as “Scope 4” are to be considered as avoided emissions.
Does the GHG Protocol need to be extended to cover Scope 4 emissions?
We do not think this is the case, but clarification is needed. PG&E commits to reducing its scope 1, 2 and 3 emissions. That in itself defines a boundary for carbon accounting. At the same time, PG&E is enabling its customers to reduce their emissions by providing programs and services that help them progress on their decarbonisation goals.
Looking at it from that perspective makes it evident that there are two distinct boundaries.
We understand the PG&Es Climate Strategy Report to be very clear at this point keeping its customers’ results separate from its carbon reduction strategies.
Sharing insights on plans and commitment to helping clients with their carbon reduction goals is an indicator of the goals that the utility company wants to achieve when it comes to fighting climate change.
However, it should not be misunderstood by the clients of PG&E that carbon accounting and decarbonisation can be outsourced to a utility company since this is a duty that must be done in-house.
NordESG is an independent consulting firm that advises on sustainability and ESG. We support companies in navigating their sustainability landscape and develop strategies and concepts individually tailored to their requirements. We look forward to hearing from you via email. You can also make an appointment with us directly for a free introductory meeting.
Links and Sources
 PG&E Climate Strategy Report: Our Commitment: Helping to Heal the Planet p. 5
 PG&E Climate Strategy Report: 2040: Net Zero Energy System p. 7