Lower Emissions: Your Guide to Carbon Reduction Strategies

A carbon footprint is the total amount of greenhouse gases (GHG) produced by an individual, organization, or activity. While personal choices around energy use, transportation, and consumption matter, companies account for most global emissions. Reducing corporate carbon footprints is essential to meeting larger sustainability goals. Companies have a greater share of responsibility and greater influence across supply chains, industries, and communities. Taking decisive action offers a critical opportunity to drive systemic change at scale.

What is the Carbon Footprint?

A carbon footprint measures the total greenhouse gas emissions generated by a person, organization, product, or event. These emissions, typically expressed in terms of carbon dioxide equivalents (CO2), come from a wide range of activities, including energy consumption, transportation, manufacturing, and supply chain operations.

In a corporate context, a company’s carbon footprint is shaped not only by its direct activities but also by the broader network of suppliers, service providers, and product lifecycles it manages. To fully account for these emissions, organizations need to measure them across the scope 1, scope 2, and scope 3 categories. This approach provides a comprehensive view of where emissions occur and where strategic, intentional action can deliver the greatest impact.

Understanding Scope 1, 2, and Scope 3 Emissions

To fully capture their climate impact, companies categorize emissions into three scopes:

Scope 1 emissions are direct emissions from sources the company owns or controls, such as fuel burned in company vehicles, emissions from on-site factories, or natural gas used in company-owned buildings.
Scope 2 emissions are indirect emissions tied to the energy a company purchases and uses. This includes the electricity that powers office buildings, manufacturing plants, and data centers.
Scope 3 emissions cover all other indirect emissions across a company’s entire value chain, including the production of raw materials, the shipping of goods, business travel, employee commuting, product use, and even end-of-life disposal.

While scope 1 and scope 2 emissions are relatively straightforward to measure and manage, scope 3 emissions often represent the largest share of a company’s total footprint, frequently exceeding 70% in industries like manufacturing, retail, and technology. Because scope 3 emissions come from activities beyond a company’s direct control, addressing them requires deep engagement with suppliers, partners, and customers. Tracking emissions across all three scopes is critical for building an effective, credible carbon reduction strategy.

Why Companies Must Prioritize Carbon Footprint Reduction

Corporate emissions are under sharp scrutiny, and the pressure to act is coming from every direction. Companies that take carbon footprint reduction seriously are protecting their brand and positioning themselves for a stronger, more resilient future. Primary drivers for carbon reduction include:

Regulatory compliance: New regulations, like the EU’s Corporate Sustainability Reporting Directive (CSRD), demand transparent, verifiable emissions data to combat climate change.
Investor expectations: ESG performance is now a core investment metric, with investors increasingly steering capital toward companies demonstrating credible climate action.
Customer loyalty and brand trust: Buyers are shifting toward brands that show a real commitment to corporate social responsibility and sustainable, low-carbon practices.
Employee attraction and retention: Sustainability leadership helps recruit and retain top talent, particularly among younger, purpose-driven employees.
Operational and financial resilience: Managing emissions reduces future carbon cost exposure, strengthens supply chain stability, and mitigates regulatory and reputational risk.

Companies that ignore carbon emissions are increasing their exposure to regulatory non-compliance and lost business opportunities. Taking clear, credible steps to reduce emissions is a critical path to maintaining trust and stability in today’s environmentally aware market.

How to Reduce Carbon Footprint: Practical Strategies

Reducing carbon emissions takes action at every level, from personal decisions to corporate strategy. While individuals can make meaningful choices in daily life, companies have the largest levers to pull and the greatest opportunity to minimize environmental impacts and drive change in the low-carbon economy.

Making conscious choices about how people live, travel, and consume can meaningfully lower personal carbon footprints. Companies have a broader impact – and a greater responsibility – to lead carbon reduction efforts. Effective strategies begin with a holistic evaluation of risks, opportunities, and emissions across the entire business and supplier network.

Conduct a carbon audit: Establish a detailed baseline by measuring direct and indirect emissions (scope 1, 2, and 3). A complete assessment gives companies the data they need to focus resources where reductions will have the greatest impact.
Embed carbon considerations into procurement decisions: Evaluate and select suppliers based on their sustainability practices and ability to support low-carbon goals. Integrating carbon criteria into sustainable procurement strengthens supplier networks and aligns sourcing decisions with emissions targets.
Drive carbon reduction across the supply chain: Optimize logistics, manufacturing, and distribution practices to cut emissions across the full value chain. Focus on improving energy efficiency in production, transitioning to low-carbon transportation, and working with suppliers to reduce emissions at every stage of sourcing and delivery.
Invest in renewable energy sources: Start a strategic transition to solar, wind, or other renewable energy options to minimize reliance on fossil fuels and reduce scope 2 emissions.
Develop circular economy practices: Design products for reuse, repair, or recycling to extend resource life cycles and reduce the need for carbon-intensive production.

Going Beyond Reduction: Carbon Offsetting and Net-Zero Goals

Reducing emissions at the source is the foundation of any credible climate strategy. But even with the strongest efforts, some emissions are unavoidable. Carbon offsetting allows companies to compensate for these remaining emissions by investing in projects to reduce or remove greenhouse gases elsewhere through reforestation or renewable energy initiatives. It’s important to distinguish between carbon neutrality and net zero when setting climate goals:

Carbon neutrality means balancing emissions by offsetting an equivalent amount through other projects. It focuses on compensating for emissions but does not necessarily require deep reductions at the source.
Net zero requires companies to minimize emissions across operations and supply chains as much as possible, using offsets only for those emissions that cannot be eliminated. Net-zero commitments demand systemic change, not just compensation.

Achieving net-zero emissions requires clear, science-based pathways built around full operational decarbonization, not reliance on offsets alone.

How Digital Tools Help Companies Drive Carbon Reduction

Effective carbon management requires clear data. Companies need a comprehensive view of their emissions across scopes 1, 2, and 3 to identify priorities, track progress, and meet reduction targets. Manual methods often fall short, especially when supply chains span the globe and involve multiple supplier tiers.

Digital tools enable companies to gather and analyze emissions data at scale. They provide the visibility needed to benchmark performance, engage suppliers on emissions reduction efforts, and monitor continuous improvement across operations and value chains. With centralized data and insights, companies can make faster and smarter decisions that accelerate decarbonization and build a stronger foundation for long-term climate goals.

How EcoVadis Helps Companies Reduce Carbon Emissions

Achieving meaningful carbon reduction requires more than internal initiatives. EcoVadis equips companies with the tools to measure emissions, engage suppliers, and drive continuous improvement across operations and supply chains.

Carbon Action Manager

EcoVadis Carbon Action Manager helps companies measure emissions across scope 1, 2, and 3 and turn that data into action. It standardizes carbon reporting, identifies high-impact reduction areas, and tracks supplier progress toward decarbonization goals. Companies can set science-based targets, monitor real performance, and move beyond data collection to drive real change across their organization.

Supplier Engagement and Benchmarking

EcoVadis solutions extend emissions management across the supply chain. Sustainability Ratings platform evaluates supplier carbon practices, while EcoVadis IQ identifies hidden risks deeper in the value chain. Companies can benchmark supplier performance and prioritize engagement where it matters most to drive continuous improvement based on real, verifiable data.

Monitoring and Reporting Tools

EcoVadis offers continuous risk monitoring and regulatory reporting support. Companies can track emerging supplier risks 24/7 with analyst-validated news, meet due diligence requirements through CSRD and LkSG dashboards, and export verified data to streamline reporting, disclosures and compliance strategies.

Carbon Reduction: Frequently Asked Questions (FAQ)

What are the main sources of carbon emissions?

Most carbon emissions come from burning fossil fuels for electricity, heat, and transportation. In companies, key sources include facility energy use, production processes, freight and logistics operations, business travel, and supplier activities across the value chain.

What is the difference between carbon neutral and net zero?

Carbon neutrality means offsetting the emissions a company generates, often without major operational changes. Net zero requires deep reductions across operations and supply chains first, with offsets used only for the small amount of emissions that cannot be eliminated.

How are scope 1, 2, and 3 emissions calculated?

Emissions are calculated using the formula: Activity Data × Emission Factor.

Scope 1: Measure direct emissions from owned or controlled sources, including fuel burned on-site or company vehicles.
Scope 2: Calculate indirect emissions from purchased energy by collecting utility data (e.g., electricity, steam) and applying appropriate emission factors.
Scope 3: Estimate indirect emissions across the value chain, including supplier activities, product use, and waste. This often involves gathering data from partners or using industry averages when specific data isn’t available.

Accurate calculations require reliable activity data and appropriate emission factors for each emission source. EcoVadis Carbon Estimator is an easy-to-use tool designed to help your company estimate its greenhouse gas (GHG) emissions with minimal data input requirements. This tool simplifies the process of estimating GHG emissions, making it accessible for companies at all stages of their decarbonization journey. It is especially beneficial for small and medium-sized enterprises (SMEs) with limited carbon knowledge and resources.

What role do suppliers play in a company’s carbon footprint?

Suppliers contribute significantly to a company’s scope 3 emissions through raw material extraction, manufacturing, logistics, and other activities. Engaging suppliers on carbon reporting and reduction initiatives is critical to making progress toward emission targets and creating green supply chains.

How do third-party ratings strengthen carbon management strategies?

Third-party ratings validate supplier data, highlight performance gaps, and provide benchmarks that internal assessments often miss. They help companies prioritize improvement efforts, build transparency, and support science-based emissions reduction targets with verified external insights.