From theory to practice: 3 tangible examples of major companies avoided emissions

Avoided emissions are emissions that occur outside a product or company’s value chain but result from the use of a company’s product / service / action. In previous articles, we dove into what avoided emissions are and how they differ from emissions in scopes 1, 2 and 3. We also discussed how to calculate these emissions and disclose them accurately and transparently.

Today, we’ll look at real examples of companies using avoided emissions to better understand the benefits of calculating and disclosing emissions.

Before we dive into the details of these examples, let’s uncover why we choose these specific cases. There are multiple examples of companies using the practice of avoided emissions. Major companies such as Cimarron Energy and DSM have used avoided emissions to highlight certain positive aspects of their products, and companies such as Johnson Controls and Panasonic have gone one step further and set tangible avoided emissions targets.

However, many of these companies are not using best practices when it comes to calculating and discussing avoided emissions. Tesla, Rockwool, and Siemens have all managed to present a clear and compelling narrative around these emissions while observing two key best practices referenced in WRI’s framework for comparative emissions:

1. Don’t neglect corporate emissions Each company calculates their scopes 1, 2 and 3 emissions and is actively trying to reduce the emissions derived from their value chain. This additional focus on avoided emissions does not equal neglecting corporate emissions within their sustainability or in their disclosures.
2. Make sure your calculations are clear Being transparent about the methodology used is of utmost importance. Sharing potential assumptions and being conservative helps the audience of the disclosure feel more confident about the numbers presented and may help in avoiding claims of “greenwashing.” In addition, it’s important to consider the broader market context for these claims. For example, if Electric Vehicles (electric vehicles) are projected to make up the majority of new vehicles produced by 2030, are Tesla’s vehicles really replacing traditional vehicles, or just other EVs?

With these practices in mind, let’s look at each company in closer detail.

1. Tesla (Automotive Manufacturer / Solar Panel + Energy Storage Production)

Tesla has been a prominent (and vocal) advocate of including avoided emissions in sustainability discussions. From angry Elon Musk tweets to Tesla’s annual impact report, the company has repeatedly and consistently emphasized they are working to make society more sustainable, not their business alone.

To support this message, Tesla included two avoided emissions claims in their 2022 impact report:

• “A single Tesla vehicle avoids 55 tons of CO₂e over its life.”
• “In 2022, the global fleet of Tesla vehicles, energy storage and solar panels enabled our customers to avoid emitting 13.4 million metric tons of CO₂e.”

To generate these claims, Tesla looks at the lifecycle emissions of their products vs. comparable solutions. For example, their analysis compared Tesla’s EV to a traditional internal combustion engine (ICE) vehicle. Over a vehicle lifetime of 17 years, the EV uses 55 tons of CO₂e less than an ICE equivalent. To calculate these numbers, Tesla uses conservative assumptions. For instance, they assume electric grid emissions intensity (CO₂e/kWh) remains the same throughout the vehicle’s lifespan. This means no additional renewable energy is added to the grid in the future (which would make EVs seem even more effective as their electric fuel source becomes cleaner).

But why make these claims? One of the main benefits of Tesla’s cars is that they are a low-carbon alternative to a traditional car. If a customer opts for an EV for their next vehicle over an ICE vehicle, there will be less global emissions overall. The more vehicles Tesla sells, the greater the impact on our planet.

That said, there is no corporate GHG accounting to prove this statement – in fact, if more customers start purchasing Tesla vehicles, the company’s emissions are likely to increase, not decrease (due to increased manufacturing, greater product use, etc.). By including avoided emissions, Tesla can shape a more complete and compelling sustainability story.

2. Rockwool (Stone Wool Insulation Manufacturer)

Rockwool is the leading manufacturer of stone wool insulation, a unique product that uses stone and minerals to create a more sustainable product for buildings (vs. traditional insulation). In their 2022 sustainability report, Rockwool included a few avoided emissions claims:

• “ROCKWOOL building insulation sold in 2022 will save annually 19 TWh heating energy – equivalent to the annual energy use of more than one million homes.”
• “Over its lifetime ROCKWOOL building insulation sold in 2022 will save 197 million tonnes CO₂ emissions, equivalent to more than 38 million homes’ annual electricity use. All the while our production is energy-intensive we are saving far more – as much as 100 times more energy than is consumed and carbon that is emitted to make these products.”

What makes Rockwool’s claims credible is their complete transparency around their methodology. In their report, they acknowledge the lack of standard methodology for avoided emissions. To address this, they engaged a third party to develop a methodology for Rockwool based on prominent industry guidelines. They later shared this methodology, as well as their assumptions, as part of their disclosure. This type of transparent communication can help avoid claims of greenwashing.

With similarity to Tesla, Rockwool has a product that enables customers to reduce their emissions. In this case, installing Rockwool insulation in a building improves the building’s ability to retain heat. As per consequence, the building requires less space heating, resulting in lowered emissions. These savings are not captured anywhere in Rockwool’s GHG inventory but appear as a direct result of using Rockwool insulation. By calculating avoided emissions, Rockwool can take credit for their product efficiency and provide a more complete picture of their business impact on GHG emissions.

3. Siemens (Technology company with focus on industry, infrastructure, transport, and healthcare)

Avoided emissions are a key theme in Siemens’ sustainability disclosures. Siemens chose to show their positive impact alongside their corporate emissions (i. e. scopes 1, 2, and 3):

Siemens’ carbon footprint is dominated by emissions from the use of Siemens products (over 95% of total emissions). At first glance, these results may paint a negative picture – using Siemens’ products creates emissions and harms the environment. This is yet another case where corporate GHG accounting fails to tell the whole story. Many of Siemens’ products reduce emissions for their customers, either by displacing less efficient alternatives or by enabling the development of more efficient processes. While Siemens products do generate emissions through use, they equally decrease emissions.

Although product generated emissions are significant, the chart provides more context regarding the actual impact Siemens has on global emission rates. Although avoided emissions don’t count towards reducing scope 1, 2 and 3 emissions, including these emissions proves that the products have both good and bad consequences. As Siemens continues to improve the efficiency of their products, the use of sold product emissions will decrease and avoided emissions will increase, further emphasizing the positive impact of their work.

Looking at real examples of avoided emissions in practice can help identify best practices and find inspiration for your own avoided emission efforts. That said, if you are looking to get started with your avoided emissions work you will be required to take action. So where do we start?

It is important to consider avoided emissions work should never take priority over scope 1, 2 and 3 emissions. If your company has not yet completed its GHG inventory or planned to reduce emissions inside the value chain, start there.

If your company is already working on reducing scope 1, 2 and 3 emissions, it is worth considering if and how your company can benefit from quantifying avoided emissions. Unsure where to start? Don’t worry – our experts are here to help you assess your company’s risk and opportunities.