Scope 4 Emissions: The Next Form Of Greenwashing?

Uncover the truth behind “avoided emissions” claims and why companies’ Scope 4 methodologies demand scrutiny. Ravi Chidambaram shares his expert analysis – read about the importance of transparent standards in evaluating carbon reduction strategies.

Are scope 4 emissions a groundbreaking solution or just another greenwashing tactic? The new, “hot” strategy amongst MNCs, particularly in Japan, for carbon reduction is “avoided emissions,” also known as scope 4. Coined by the World Resources Institute, scope 4 emissions encompasses reductions that “occur outside a product’s life cycle or value chain but as a result of the use of that product.”

Avoided emissions are achieved when a company makes a new product, which means normally replacing an older generation product, that carries lower emissions over its lifecycle – from manufacturing to end of life recycling. The scope 4 emissions savings are then offset against the company’s scope 1, 2 and 3 emissions to present a more complete picture of its carbon footprint.

It sounds in principle like a great idea and is indeed at the heart of new reporting protocols, such TCFD, that want companies to map out and quantify their carbon transition plans. However, as is the case with most things in the sustainability world, things are never as straightforward as they seem.

At Rimm Sustainability, we have been doing more research on Scope 4 and believe that many avoided emissions claims deserve closer scrutiny. Our director, Kim Schumacher, a world authority on the subject of greenwashing, has also voiced his doubts on the methodologies used by companies to claim avoided emissions, which he recently shared in a Financial Times article.

The gist of the problem with Scope 4 methodologies can be summarized as follows:

  • Companies often do not conduct a full lifecycle product analysis and may omit some aspects, such as raw materials sourcing or end-of-life recycling, making their claims incomplete
  • Many claims are often made on a comparative basis, i.e. their new product is superior to those of competitors in the market or the company’s own older models, but the basis for comparison for which products were compared are often not disclosed
  • Even if a company’s new product is demonstrably lower in emissions, it does not mean that all its customers will switch from the old product to the new one, meaning the overall market impact may be exaggerated based on optimistic new product sales forecasts

It would therefore be wise of all interested stakeholders, from consumers to regulators to investors, to be wary of scope 4 claims made by companies. As ever with sustainability, a set of published transparent and standard methodologies – akin to an audited accounting report – will be needed before scope 4 claims can be taken seriously.

Learn more about Rimm’s sustainability and ESG solutions – browse our solutions catalog or book a free demo today!

Ravi Chidambaram
CEO – Founder

A strong believer in ethical, purpose-driven, and environmental-focused principles, Ravi Chidambaram has brought much value to the community through his knowledge and expertise. He shares his insight as a Professor of Sustainability at Yale-NUS and as a global commentator on sustainability issues. Now a serial entrepreneur, he is currently working on his 4th start up. It was there where he realized the need for sustainability that is both accessible and actionable, resulting in the creation of Rimm.

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Empowering SMEs on their Net Zero Journey: the Importance of Sustainability in Brand Building

By integrating sustainability into their brand and culture from day one, SMEs can gain a competitive advantage, drive growth, improve performance, and attract clients who share their values. Dr Leeya Hendricks, Chief Marketing Officer at Rimm Sustainability, shares insights on how to do it.

Sustainability is no longer just a buzzword. It has become a critical factor for businesses of all sizes, including SMEs, in driving long-term success and positive impacts on the planet.

In today’s competitive business landscape, small and medium-sized enterprises (SMEs) have a great opportunity to integrate sustainability into their brand-building strategies. This can help them build significant competitive advantage while also contributing to global efforts on issues such as climate change.

Embracing the journey towards net-zero emissions is an excellent place to start for SMEs looking to bake sustainability into their identity and DNA. Achieving net zero emissions means balancing the greenhouse gases they emit with the amount they remove from the atmosphere.

But embedding other issues in the sustainability-related areas of environment, social and governance will also help them position for success. Customers are increasingly seeking brands that align with their values and prioritize sustainability. If the firm can demonstrate a genuine commitment to sustainability, it will become a magnet for customers who want to make ethical purchasing decisions.

By communicating their sustainability initiatives clearly and reporting progress transparently, SMEs can attract new clients who share the same values and build a loyal customer base.

Building sustainability into culture

For SMEs, sustainability should be more than just a standalone initiative. They should embed it in their brand, culture, values, and operations.

By making sustainability a core principle, SMEs can demonstrate their commitment to environmental stewardship and social responsibility. This includes integrating sustainable practices into their supply chain, adopting energy-efficient technologies, minimizing waste generation, and supporting ethical sourcing. Doing so doesn’t just reduce their environmental footprint, it inspires and engages their employees, customers, and stakeholders.

Competitive advantage and growth

Increasingly, consumers seek products and services from companies that align with their values, including environmental consciousness.

By demonstrating commitment to sustainability from start-up, SMEs can gain a competitive advantage by attracting a growing customer base that prioritizes ethical and eco-friendly choices. Moreover, most research shows sustainability-driven innovation can also create value by generating market opportunities, improving operational efficiency, saving costs and attracting clients.

Sustainability goes beyond environmental considerations. It encompasses social and governance aspects too. SMEs that prioritize these aspects enhance their overall performance by, for example, fostering a positive company culture, ensuring fair labor practices, promoting diversity and inclusion, and practicing transparent governance.

These factors contribute to a positive brand image and attract prospective clients who value responsible business practices. SMEs can then use sustainability to stand out in a crowded marketplace and forge long-term partnerships with like-minded clients.

Enabling the net zero journey

To embark on the net zero journey, SMEs need to set clear goals, establish a roadmap, and track their progress. This includes conducting a comprehensive assessment of their carbon footprint, identifying emission sources, and implementing measures to reduce and offset their emissions. Collaboration with sustainability experts, leveraging technology solutions, and engaging employees and stakeholders are essential for achieving net zero targets.

Sustainability and brand building are intertwined for SMEs on their journey to net zero. Integrating sustainability into culture boosts competitive advantage, growth, and performance; and attracts clients with shared values. Embracing sustainability and communicating it effectively will also help position the company as a leader in its industry, driving success while contributing to a more sustainable future.

It’s an opportunity to impact the planet positively, while ensuring long-term success and resilience for the company. With the right commitment, strategy, and tools, SMEs can lead the way towards a sustainable and prosperous future.

How Rimm can help

Companies can use technology to mitigate sustainability risks and optimize their environmental and financial performance. Rimm offers automated ESG reporting services and analytics tools that help organizations improve their corporate strategy, risk management and sustainability performance.

Learn more about Rimm’s sustainability and ESG solutions – browse our solutions catalogue or book a free demo today!

Dr. Leeya Hendricks
Chief Marketing Officer, Rimm Sustainability

Dr Leeya Hendricks has held executive roles across financial services and technology and has led global portfolios driving impactful brand awareness, demand generation, growth marketing initiatives that will further our mission around sustainability and create impactful value with and for our clients.

Simplify Your Sustainability Performance & Tracking With myCSO

✅ Calculate your scope 1, 2 and 3 emissions instantly

✅ Gauge your company’s sustainability performance

✅ View your sustainability performance all from one dashboard

Benchmark against industry peers

Enter your information below to book a demo with our team today.

ESG Needn’t Cost the Earth: Powerful New Reporting and Management Tools are Affordable for SMEs

Lower-cost digital tools are breaking boundaries for SMEs in sustainability. From automated ESG reporting analytics and carbon calculation, to ESG risk ratings, embracing sustainability is at last achievable and cost-effective.

Do you want your firm to be more sustainable but worry about how much it will cost? Sustainability is becoming essential for businesses as stakeholders and regulators demand greater transparency and accountability on environmental, social, and governance (ESG) issues.

For small and medium-sized enterprises (SMEs), the cost and complexity of managing and reporting sustainability initiatives have been daunting. Although the global economy has so far avoided recession, it is still a strong risk, says the World Bank. A recession would tighten the financial squeeze on firms already struggling with the impacts of war in Ukraine, persistently high inflation, and higher interest rates.

Such worsening conditions could tempt time and cash-poor SMEs to delay critical sustainability initiatives. But help is at hand.

The perception that sustainability involves expensive, resource-heavy activities out of reach for SMEs is changing with the emergence of affordable digital tools. These tools help you automate ESG reporting, analytics and carbon calculation to reduce costs; and they make ESG risk rating more affordable and achievable too. Let’s explore how these new technologies can support your journey to sustainability and positive impacts.

1) Automated ESG reporting

In the past, ESG reporting has been a time-consuming and resource-intensive process that requires extensive data collection and analysis. However, digital tools have simplified and automated this process, enabling your SME to generate ESG reports efficiently.

By centralizing data collection and using pre-built templates, these tools streamline the reporting process, saving time and effort. For example, you can now easily track and report your environmental impact, social initiatives, and governance practices while reducing the burden on your internal resources.


2) Analytics for performance insights

Digital tools offer affordable analytics that give SMEs powerful insights into their sustainability performance. These insights allow your SME to make informed decisions, prioritize initiatives, and optimize resource allocation effectively. By collecting and analyzing data on factors such as energy consumption, waste generation, carbon emissions, and social impact, you can also set sustainability targets, monitor progress, identify areas for improvement, and demonstrate continuous improvement in your sustainability efforts.

3) Carbon calculation tools

Calculating and managing carbon emissions is a crucial aspect of sustainability. Carbon calculation tools enable SMEs to measure and track their carbon footprint accurately. They consider various emission sources, including energy consumption, transportation, and supply chains, to provide a comprehensive assessment.

By understanding your SME’s emissions, you can target reduction strategies and offset programs, leading to cost savings and a positive environmental impact. The good news is digital carbon calculation tools are now affordable to SMEs. So even if the world nudges into recession and you’re feeling the financial squeeze, you can still start or continue your journey to carbon neutrality without it costing a fortune.

4) ESG risk rating and benchmarking

ESG risk rating and benchmarking tools enable SMEs to benchmark their sustainability performance against industry peers and established standards. These tools evaluate a range of factors, from environmental impact to social practices, governance structure, and ethical considerations.

By understanding your firm’s relative position, you can identify improvements and implement strategies to enhance ESG performance. ESG risk rating tools also assist SMEs in understanding potential sustainability-related risks and opportunities, enabling you to make proactive decisions and mitigate risk.

Cost savings and competitive advantage

Embracing affordable digital sustainability tools helps your SME achieve significant cost savings by optimizing energy consumption, reducing waste, and improving resource management. These tools help you achieve long-term financial benefits by identifying opportunities for process optimization and efficiency gains.

But integrating sustainability practices also enhances your reputation, and helps you attract environmentally conscious customers, investors, and partners. By enabling you to demonstrate this commitment to sustainability, digital sustainability tools can ultimately help you gain competitive advantage without straining your resources.

At Rimm with our myCSO product, we believe sustainability should be accessible, actionable and affordable. Let us be your Chief Sustainability Officer and handle all your company’s sustainability needs. Get started today.

Simplify Your Sustainability Performance & Tracking With myCSO

✅ Calculate your scope 1, 2 and 3 emissions instantly

✅ Gauge your company’s sustainability performance

✅ View your sustainability performance all from one dashboard

Benchmark against industry peers

Enter your information below to book a demo with our team today.

World Oceans Day: How SMEs Can Play a Part in Restoring Our Oceans

Today on World Oceans Day, Dr. Lee-Ann Modley shares her expertise on ocean risks and opportunities and the steps SMEs should take to act responsibly and transparently on ocean-related governance.

“A healthy ocean is our most important ally in the fight against climate change.”

World Ocean Day is an international day that takes place annually on June 8. On this day, we aim to inform the public of the impact of human actions on the ocean, develop a worldwide movement of citizens for the ocean, and mobilize and unite the world’s population on a project for the sustainable management of the world’s oceans.

As a consequence of human actions that fragment wetland habitats and restrict landward migration, coastal ecosystems progressively lose their ability to adapt to climate-induced changes and provide ecosystem services, including acting as protective barriers.

Projections show that beyond 2100, sea levels will continue to rise for centuries due to continuing deep ocean heat uptake and mass loss of the Geographic Information System (GIS) and Air Insulated substations (AIS) and will remain elevated for thousands of years. Risk related to Sea Level Rise (including erosion, flooding and salinization) is expected to significantly increase by the end of this century along all low-lying coasts in the absence of major additional adaptation efforts.

The Blue Economy gives us the opportunity to produce economic resources related to the oceans, while restoring damaged ecosystems and introducing innovative technology that helps us efficiently and sustainably manage everything the seas can offer us.

What does this mean for SMEs?

Small and medium enterprises (SMEs) have a critical role in restoring ocean health as they represent 70% of employment and 90% of total enterprises in developing countries across all sectors of the Blue Economy. On the basis of research, knowledge and data, ocean industries and SMEs can drive the innovation needed to meet the Green Deal targets and address the grand challenges of climate change, biodiversity loss and post-pandemic recovery.

As a step in this direction, SMEs based on, depending on or affecting the ocean should integrate relevant ocean-related risks and opportunities into their corporate strategy, risk management and reporting. In supporting the use of sustainable ocean finance principles and other voluntary mechanisms led by the private sector and multilateral financial institutions in recovery and stimulus efforts, companies can guide, de-risk, incentivise and monitor investments in sustainable ocean activities to increase transparency and ensure reporting consistency.

How can Rimm help?

By leveraging technology, companies can mitigate risks to optimize their environmental and financial performance. Rimm offers automated ESG reporting services and analytics tools that provide insight to help organizations improve their corporate strategy, risk management and sustainability performance.

To learn more about Rimm’s sustainability and ESG solutions, browse our solutions catalogue or book a free demo!

Dr. Lee-Ann Modley

Dr. Lee-Ann Sade Modley is a Senior Lecturer and Deputy Head of Department of Geography, Environment management and Energy in the Faculty of Science at the University of Johannesburg. She holds a PhD in Environmental management from UJ and has been deeply involved with the water services industry with a particular focus on communities.

Simplify Your Sustainability Performance & Tracking With myCSO

✅ Calculate your scope 1, 2 and 3 emissions instantly

✅ Gauge your company’s sustainability performance

✅ View your sustainability performance all from one dashboard

Benchmark against industry peers

Enter your information below to book a demo with our team today.