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PG&E Risks Greenwashing with Definition of ‘Scope 4’ Emissions

The decision by mammoth California utility Pacific Gas & Electric to report avoided emissions due to its operations could be a progressive step towards climate accountability, but unofficially framing them as “Scope 4 emissions” could open the door to corporate greenwashing, experts warn.

“I think a corporate player who makes a move that goes into a new direction that could be considered outside the box should be encouraged,” said World Resources Institute climate expert Pankaj Bhatia.

But he advised companies not to adopt the “Scope 4” label and find something else instead, reports BNN Bloomberg.

Calculations for Scope 1, 2, and 3 emissions are widely used to “capture the full sweep of a company’s climate footprint,” says Bhatia, and they have been rigorously defined in greenhouse gas accounting protocols since 2001. Together, the different scopes take stock of the emissions directly linked to a company’s activity (Scope 1), indirect emissions from the energy a company uses to make its products or deliver its services (Scope 2), and all other indirect sources of emissions associated with a company’s value chain (Scope 3).

But “Scope 4” emissions are not included anywhere in that framework. So what do they refer to?

“We acknowledge that ‘Scope 4’ is an emerging term for categorizing emission reductions enabled by a company and present the term in quotations to distinguish it from Scope 1, 2, and 3 greenhouse gas emissions,” said PG&E spokesperson Lynsey Paulo.

To clarify what the company measures as “Scope 4”, Paulo explained that “as a utility that provides gas and electric service to millions of Californians, we have dedicated programs and strategies to enable our customers to reduce their carbon footprint and our ‘Scope 4’ goals quantify our 2030 objectives.”

Essentially, PG&E is using the term to account for any efforts the company makes to help customers reduce their emissions from customers. The utility says efficiency and electrification programs can help households and businesses cut back 48 million tonnes of carbon dioxide equivalent by 2030, while supporting the uptake of electric vehicles can save more than 58 million tonnes of CO2e, Bloomberg explains.

In the best case, reporting avoided emissions shows the positive steps a company is taking and connects those steps directly to outcomes with consumers. Reporting “Scope 4” emissions could also send a strong signal to investors that a company is serious about reducing its footprint. PG&E’s actions to date—which include plans for a transition to a net-zero energy system by 2040, five years ahead of California’s goal—align with this interpretation, Bloomberg says.

But the utility hasn’t yet clearly defined the term or how it is calculated. And while the bid to avoid emissions is laudable, categorizing them as “Scope 4” could be interpreted as negating other scopes of emissions, facilitating corporate greenwashing. Laura Draucker, Ceres’ director of corporate greenhouse gas emissions, said the goal of sharing such emissions should not be “to take pressure off their Scope 1, 2, and 3 emissions.”