Facing mounting environmental and regulatory pressures, organizations are finding that reducing their carbon footprint is both a necessity and a strategic advantage. Businesses globally are responsible for a significant share of greenhouse gas (GHG) emissions. Beyond environmental responsibility, reducing emissions can improve brand reputation, increase operational efficiency and even boost employee engagement. This resource outlines common steps on how to reduce your carbon footprint effectively. 

Understanding your organization’s carbon footprint 

Understanding your organization’s carbon footprint is essential for developing an effective emissions reduction strategy and meeting growing environmental responsibilities. Organizations must first grasp what contributes to their carbon footprint before they can take meaningful steps to reduce it. 

What is a carbon footprint? 

A carbon footprint measures the total GHG emissions resulting from your organization’s operations, including: 

Scope 1: Direct emissions from owned or controlled sources, such as company vehicles and on-site fuel combustion.
Scope 2: Indirect emissions from the consumption of purchased energy, including electricity, heating and cooling.
Scope 3: Other indirect emissions in your value chain, including purchased goods and services, business travel and product use. 

The business case for decarbonization 

Decarbonizing is no longer just about meeting regulatory requirements — it offers a pathway to substantial competitive advantages and cost savings for organizations. Here’s why reducing emissions has become essential for today’s businesses: 

• Market demand and financial performance: Decarbonization can drive revenue growth and align with consumer demand for sustainable products. According to NielsenIQ, 61% of people acknowledge the environmental impact on their health and are willing to pay a premium for eco-friendly offerings. Transparency and sustainable practices are also crucial, with 76% of consumers prioritizing honest information from brands, which builds trust and enhances profitability. 
• Resilience against climate risks: Climate-related disruptions, such as wildfires and flooding, are prompting businesses to adopt resilience-enhancing strategies. Companies that focus on decarbonization and resilience benefit from greater operational stability and avoid costly disruptions. 
• Investor and regulatory pressure: Investor interest in corporate sustainability is surging, with stakeholders demanding transparency around climate risks, particularly Scope 3 emissions. Within the past few years, over 500 institutional investors representing $39 trillion in assets called for mandatory climate risk disclosures. This aligns with regulatory developments, including the SEC’s proposed climate disclosure requirements. 
• Operational efficiency and cost savings: Decarbonization yields immediate financial benefits by improving energy efficiency and minimizing waste. For example, switching to energy-efficient lighting or optimizing HVAC systems can significantly reduce operating costs while lowering carbon emissions. 

How to reduce your carbon footprint 

Here are the nine steps that your organization should follow to reduce its carbon footprint: 

1. Measure and analyze your carbon footprint

Start by assessing your carbon footprint to pinpoint where emissions are most significant. A thorough measurement provides insights into key emission sources, allowing for more focused and effective reduction strategies. 

2. Set emission reduction targets

Establish clear, measurable carbon reduction goals that align with your organization’s sustainability strategy. For example, setting net-zero goals or reducing emissions by a certain percentage over time can guide ongoing efforts. 

3. Strategic prioritization and implementation

Achieving significant carbon reduction requires strategic prioritization, focusing on initiatives that yield the highest impact with available resources. The following matrix provides a structured approach to categorizing and prioritizing projects: 

Carbon reduction prioritization matrix 

4. Industry-specific decarbonization strategies

It’s worth noting that different industries have unique emissions profiles, making tailored strategies essential for effective reduction, as the following examples will illustrate.  

Manufacturing 

This sector often has high Scope 1 emissions due to on-site fuel use and energy-intensive production processes. One approach to reducing emissions is to replace fossil-fuel-powered equipment with electric alternatives. For instance, an automotive manufacturer might install electric heat pumps instead of gas heaters, cutting both emissions and operational costs. 

Consumer goods and retail 

The retail sector has a substantial portion of its carbon emissions embedded in its supply chain (Scope 3). Retailers can make meaningful reductions by working with suppliers to adopt renewable energy and using more sustainable packaging. Additionally, data-driven approaches can help companies optimize inventory management to reduce overproduction and minimize waste. 

Technology and software 

Data centers and electronic devices are key emission sources for technology companies, especially within Scope 2. A cloud services provider might adopt efficient cooling systems and renewable energy for data centers, which not only reduces emissions but also improves energy efficiency.  

Agriculture 

Methane emissions from livestock and nitrogen-based fertilizers are major emission contributors. An agricultural company might mitigate emissions by adopting regenerative agriculture practices, such as using organic fertilizers and rotational grazing to maintain soil health and reduce methane emissions. 

Financial services

This industry sees the majority of its emissions through financed activities (Scope 3). By investing in green bonds and eco-friendly funds, a bank can significantly reduce its carbon footprint. For example, a bank might allocate capital specifically to projects in renewable energy, helping offset emissions linked to its investments. 

5. Reduce energy use

Adopt energy-efficient practices to cut emissions from Scope 1 and Scope 2 sources. This might include installing LED lighting, improving HVAC systems and implementing smart technology to monitor and reduce energy consumption. Switching to renewable energy sources like solar or wind can further reduce reliance on fossil fuels. 

6. Optimize transportation and travel

Transportation emissions, often significant in Scope 3, can be reduced by consolidating shipments, using electric vehicles and promoting virtual meetings over business travel. For essential travel, consider using sustainable transport options such as trains over flights when possible. 

7. Enhance supply chain sustainability

For many companies, the supply chain represents the largest share of carbon emissions. To address this, partner with suppliers that prioritize sustainable practices and request transparency in their emissions data. Incorporate environmental sustainability questions into the vendor procurement process to start collecting critical information about the practices of suppliers and identify opportunities for improvement. Additionally, encourage or require your suppliers to adhere to international standards like ISO 14001, which focuses on reducing environmental impact. 

8. Reduce waste

Implement waste reduction practices, such as reusing and recycling materials, eliminating single-use items in offices and adopting zero-waste policies. Conduct audits to identify waste hotspots and move toward circular economy principles by reusing materials or sourcing recycled inputs, which can significantly reduce emissions. 

9. Implement carbon offsetting

Where emissions are unavoidable, consider investing in carbon offsets to support projects that reduce GHG emissions elsewhere, such as reforestation or renewable energy projects. Offsetting is not a substitute for direct reduction but serves as a complementary strategy. 

Partner with BPM for effective decarbonization  

It’s important to know how to reduce your carbon footprint. Reducing it within your organization can help contribute to climate goals, enhance reputation and mitigate risks for long-term business continuity.  

With BPM’s support in carbon accounting and decarbonization strategies, we simplify emissions measurement, reporting and reduction. We help you meet compliance requirements while guiding you from goal setting to meaningful action, building a strong foundation for future sustainability initiatives. Additionally, our tax team can assist in financing decarbonization efforts by leveraging Inflation Reduction Act tax credits. We support you in maximizing financial incentives while investing in sustainable practices. 

Get in touch today to discuss how BPM can facilitate your carbon emissions measurement and reduction journey.