How can a business reduce its carbon footprint?

Company emissions follow the same order as personal ones: measure, cut the biggest sources, then deal with what is left. What differs is the scale, the reporting rules and the value chain. For many companies, the largest share of emissions sits with suppliers and customers, not in their own buildings and vehicles.

This section is part of our carbon footprint guide. The guides below take you from a first footprint to a net-zero plan.

The path in four steps

1. 1

   Step 1: Measure

   Build a footprint across scope 1, 2 and 3 using the GHG Protocol, and choose a base year.

2. 2

   Step 2: Set targets

   Set near-term reduction targets in line with 1.5°C, and a long-term net-zero target.

3. 3

   Step 3: Cut operations, then the value chain

   Start with the fuel and electricity you control, then work with suppliers and customers on scope 3.

4. 4

   Step 4: Neutralise what remains

   Balance residual emissions with permanent carbon removals at net zero, without counting credits as cuts.

The GHG Protocol sets out how to measure: identify sources, choose a calculation approach, collect activity data and emission factors, apply them and roll the results up to company level^{Source 1}. How to calculate a carbon footprint shows the formula, and scope 1, 2 and 3 explained covers what goes where.

Why the value chain matters

Companies reporting to CDP said their supply chain emissions were on average 26 times their operational emissions^{Source 2}. That is why the SBTi asks companies whose scope 3 is 40% or more of their total to set scope 3 targets covering at least 67% of it in the near term^{Source 3}.

Targets that hold up

The SBTi’s net-zero standard sets near-term targets over 5 to 10 years and long-term targets for 2050 or earlier^{Source 3}. It notes that most companies will reduce emissions by at least 90% through their long-term targets^{Source 3}. Smaller companies can use a streamlined SME route if they emit under 10,000 tonnes of CO₂e across scope 1 and location-based scope 2 and meet the other criteria^{Source 4}.

Carbon credits come last. Under the SBTi standard they don’t count as reductions towards targets, and may only neutralise residual emissions or fund mitigation beyond the company’s targets^{Source 3}. See residual emissions and reduce vs offset.