Cutting company emissions is mostly a sequencing problem. You can’t cut what you haven’t measured, and the sources you control directly are the quickest to fix, but for many companies the biggest share sits with suppliers and customers. This guide sets out where to start and how to keep going.
It is part of our business emissions section, within the wider carbon footprint guide. For definitions of the three scopes, see scope 1, 2 and 3 explained.
Start with a footprint
The GHG Protocol is the standard most companies use. It sets out five steps: identify emission sources, choose a calculation approach, collect activity data and emission factors, apply calculation tools, and roll the results up to company levelSource 1. Our guide to how to calculate a carbon footprint walks through the formula with real factors.
Two choices matter early:
- A base year. Choose one with verifiable data, explain why, and set a policy for recalculating it after acquisitions, divestments or method changesSource 1.
- Consistent methods. The standard asks for consistent methodologies so that comparisons over time mean something, with any changes documentedSource 1.
Where are your emissions?
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| Scope | Typical sources | Main levers |
|---|---|---|
| Scope 1 | Gas boilers, company vehicles, on-site fuel, refrigerant leaks | Electrify heat and fleet, improve efficiency, fix leaks |
| Scope 2 | Purchased electricity, heat and steam | Cut use, then buy or generate clean electricity |
| Scope 3 | Purchased goods, transport, business travel, commuting, use of sold products | Supplier engagement, product design, travel policy |
Companies reporting to CDP said their supply chain emissions were on average 26 times their operational emissionsSource 3. So while scope 1 and 2 are the place to start, don’t leave scope 3 until later. See scope 3 reduction for how to work with suppliers.
Cut scope 1: fuel and vehicles
Scope 1 covers what the company burns. The usual levers are:
- Buildings. Insulate, upgrade controls, and replace fossil boilers with electric heating when they are due. The IPCC found that up to 61% of global building emissions could be cut by 2050, and that in developed countries the largest potential lies in retrofitting existing buildingsSource 5.
- Fleet. Move cars and vans to electric. DESNZ’s 2026 factors put an average petrol car at about 0.162 kg CO₂e per km and an average battery electric car at about 0.030 kg on UK grid electricity, including transmission lossesSource 6. The IPCC found that electric vehicles powered by low-emissions electricity have the largest decarbonisation potential for land transport on a life-cycle basisSource 5.
- Processes and refrigerants. Check equipment for leaks, and plan replacements with lower-impact alternatives.
Cut scope 2: electricity
Cut electricity use first, with efficient lighting, equipment and controls. Then clean up the supply.
The GHG Protocol’s Scope 2 Guidance means scope 2 is reported as two numbers. A location-based figure reflects the average emissions of the grids you use; a market-based figure reflects the electricity you have chosen through contracts such as green tariffs or power purchase agreementsSource 2. Companies with operations in markets that offer such contracts must report bothSource 2.
Two numbers, two stories
A renewable contract lowers your market-based scope 2. Your location-based figure only falls when you use less electricity or the grid itself gets cleaner. Report both, and be clear which one a target uses.
Set targets and a pace
Targets turn intentions into a plan. The SBTi’s net-zero standard sets near-term targets over 5 to 10 years, aligned with 1.5°CSource 4. On the cross-sector pathway, the minimum ambition is a linear cut of 4.2% a year for scope 1 and 2 and 2.5% a year for scope 3Source 4.
Targets must cover at least 95% of company-wide scope 1 and 2 emissions, and when scope 3 is 40% or more of the total, at least 67% of scope 3 in the near termSource 4. Our net-zero plan guide covers long-term targets.
Report and repeat
The SBTi requires companies with targets to report their emissions inventory and progress publicly every yearSource 4. Even without formal targets, an annual update keeps the work moving:
Step 1: Update the inventory
Recalculate scope 1, 2 and 3 with the latest factors and the same method.
Step 2: Check progress
Compare with the base year and the target path, by scope and by source.
Step 3: Plan the next cuts
Pick the next largest sources and budget for them.
Small companies can use a lighter version of this process; see the SME roadmap.
Common pitfalls
- Leaving out awkward sources. The GHG Protocol’s completeness principle asks companies to account for all emission sources within the chosen boundary and to disclose and justify any exclusionsSource 1.
- Changing methods without saying so. Document any change in data, boundary or method, so that a fall in emissions reflects real cutsSource 1.
- Relying on certificates alone. A renewable contract lowers market-based scope 2, but the location-based figure only falls with lower use or a cleaner gridSource 2.
- No owner and no budget. Give one person responsibility, and put the larger changes into capital plans so they happen when equipment is due for replacement.
Where credits fit
Carbon credits come after reductions. The SBTi says credits must be reported separately from the inventory, don’t count as reductions towards targets, and may only neutralise residual emissions or fund mitigation beyond the company’s targetsSource 4. Our guide to buying carbon credits for companies covers how to buy them well, and residual emissions explains what is left to neutralise.