Companies can reduce their contribution to climate change through a combination of operational energy shifts, supply chain pressure, product redesign, and internal financial incentives that make carbon-intensive choices more expensive. The most impactful actions fall into a few broad categories: switching to renewable energy, cleaning up supply chains, rethinking how products are made and disposed of, and building carbon costs into everyday business decisions.
Switch to Renewable Energy
Energy use in buildings, factories, and data centers is one of the largest sources of corporate emissions. Companies have several practical ways to move away from fossil-fuel electricity, each with different cost structures and timelines.
On-site installation is the most direct option. Rooftop solar panels or small wind systems generate electricity right where it’s used, reducing reliance on the grid and shielding the company from utility price swings. The trade-off is upfront cost and physical space. A company leasing a small office has less room than a warehouse operator, and ownership models range from buying the equipment outright to leasing it from a solar provider.
Power purchase agreements (PPAs) are long-term contracts, typically 5 to 20 years, in which a company agrees to buy electricity from a specific renewable energy project. In a physical PPA, the company receives the actual electricity. In a virtual PPA, the arrangement is purely financial: the company pays a fixed price and receives certificates proving the energy was generated from renewables, while the physical power flows into the broader grid. PPAs help with long-term budget planning and lock in prices, but they involve complex legal commitments and aren’t easy to exit early.
Green tariffs let companies purchase renewable electricity through a utility or government program, usually by paying a small premium on top of the standard electricity rate. This is the simplest option, essentially checking a box with your utility provider, but it may not be available to tenants whose landlords control the building’s electricity account.
Energy attribute certificates are tradeable instruments, each representing one megawatt-hour of renewable energy generated somewhere on the grid. Companies buy them to match their electricity consumption with verified renewable generation. They’re flexible and easy to purchase, but prices can fluctuate with market demand.
Beyond sourcing, basic energy efficiency still matters. Upgrading lighting to LEDs, improving insulation, installing smart thermostats, and replacing aging HVAC systems can cut a building’s energy use significantly before the renewable question even comes up.
Clean Up the Supply Chain
For most companies, especially those that manufacture or sell physical products, the largest share of emissions doesn’t come from their own operations. It comes from their suppliers, raw material extraction, shipping, and product disposal. These indirect emissions, often called Scope 3, can represent 70% or more of a company’s total carbon footprint. Addressing them requires companies to look outward.
The first step is transparency. Companies can require suppliers to disclose their energy use, emissions data, and environmental risks. Ford, for example, asks strategic suppliers to report this information. Simply starting that conversation signals that emissions performance is a factor in the business relationship, not just price and delivery speed.
The next step is setting clear expectations. Some companies embed environmental key performance indicators into their supplier management process. Cisco requires its first- and second-tier suppliers to disclose emissions data and expects them to set their own reduction targets, including third-party verification of their reported numbers. That moves suppliers from just reporting to actually taking action.
Companies with more leverage can cascade science-based targets through the supply chain, essentially telling suppliers: if you want to keep our business, set your own verified climate targets. Moody’s Corporation, for instance, set a goal requiring that 60% of its suppliers by spending would have their own science-based targets by the end of 2025. It supported those suppliers through webinars and other resources to help them get there.
Collaboration amplifies the pressure. When multiple large buyers jointly ask shared suppliers to cut emissions, the message is harder to ignore. A coalition of 26 major companies with a combined $500 billion in annual procurement joined forces through CDP’s Supply Chain program to push their suppliers toward 1.5°C-aligned targets. A supplier hearing the same request from five major customers is far more likely to act than one hearing it from just one.
Redesign Products and Adopt Circular Practices
The way a product is designed determines most of its lifetime environmental impact: what materials go into it, how much energy manufacturing requires, how long it lasts, and whether it ends up in a landfill. Companies that rethink product design at the front end can eliminate emissions that no amount of operational efficiency would offset.
Redesigning products to use less material is the starting point. Lighter packaging, thinner components, and simplified assemblies reduce both the raw resources extracted and the energy consumed in manufacturing. This often lowers production costs at the same time.
Durability is another lever. A product designed to last twice as long effectively halves the emissions associated with replacing it. Companies can also choose materials that are easier to recycle or repurpose when the product does reach end of life. Using recycled aluminum instead of virgin aluminum, for instance, requires roughly 95% less energy.
Some companies go further by building refurbishment into their business model. They take back used products, restore them, and resell them, or they use manufacturing byproducts as inputs for new products rather than discarding them. This circular approach keeps materials in use longer and reduces demand for new extraction. A life cycle analysis, which maps the environmental impact of a product from raw material through disposal, helps companies identify exactly where the biggest reduction opportunities sit.
Put a Price on Carbon Internally
One of the more powerful but less visible strategies is internal carbon pricing. A company assigns a dollar cost to each ton of carbon dioxide its operations emit, then factors that cost into business decisions. When a team proposes a new factory, chooses between two shipping methods, or evaluates a capital investment, the carbon price tips the math toward lower-emission options.
This works because most companies make decisions based on financial models. If carbon is free inside those models, there’s no financial reason to choose a cleaner but slightly more expensive option. An internal carbon price corrects that by making the cost of emissions visible before they show up as regulatory penalties or reputational risk. The price can function as a shadow price (used in planning but not actually charged) or as an internal fee that divisions pay into a fund used to finance clean energy and efficiency projects. Either version shifts incentives toward lower-carbon choices across the organization.
Rethink Transportation and Logistics
Fleet vehicles, business travel, and freight shipping represent a significant emissions category for many companies. Electrifying company vehicles is the most direct fix. For delivery fleets, electric vans and trucks are increasingly cost-competitive over their lifetime because electricity is cheaper per mile than diesel and maintenance costs are lower.
Companies that rely on third-party logistics can choose carriers with newer, more fuel-efficient equipment or carriers investing in alternative fuels. Optimizing shipping routes, consolidating shipments, and shifting freight from air to rail or sea where timelines allow can cut transportation emissions substantially. For employee travel, replacing routine flights with video conferencing is a low-cost change with an outsized impact, since a single round-trip cross-country flight generates roughly one ton of CO2 per passenger.
Measure, Report, and Set Targets
None of these strategies work well without measurement. Companies need a clear baseline of their current emissions across all categories: their own facilities, purchased electricity, and their broader value chain. Without that baseline, reduction targets are guesswork.
Science-based targets, which align a company’s reduction goals with what climate science says is needed to limit warming, have become the standard framework. Over 4,000 companies globally have committed to or set these targets through the Science Based Targets initiative. Setting a public target creates accountability, both internally and with investors, customers, and partners.
The regulatory landscape for climate disclosure is still evolving. The SEC adopted climate-related disclosure rules in March 2024 requiring public companies to report on climate risks and greenhouse gas emissions, but the agency voted in 2025 to stop defending those rules amid legal challenges. Regardless of where federal regulation lands, many large companies are already disclosing voluntarily because investors and customers expect it, and several other jurisdictions around the world have their own mandatory reporting requirements in place or in development.
Voluntary reporting through frameworks like CDP gives companies a structured way to track progress, benchmark against peers, and demonstrate credibility. The act of measuring and reporting consistently, year over year, often surfaces reduction opportunities that weren’t obvious before.