How companies can reduce their carbon footprint

Let’s talk numbers. To keep global warming under 2℃, carbon emissions need to fall fast — and that won’t happen without companies stepping up. While individuals can make changes, businesses have the real power to cut carbon at scale. 

The good news? There are many different ways companies can lower their impact. At Woola, we’ve invested a lot of time into thinking through our business's impact on people, the planet, and animals. While lowering carbon emissions is just one aspect of it all, it’s arguably the most important one.

While we’re not perfect in terms of lowering the carbon emissions of our business, we believe it’s important that more companies understand what they can do and take action. The information in our guide demonstrates successful strategies and explains the environmental and financial advantages of lowering your business's carbon emissions.

Why is a company's carbon footprint such a big deal?

A company’s carbon footprint matters because businesses produce a big chunk of the world’s emissions. Nearly every part of a company's operations has an impact — from manufacturing and shipping to energy use and product waste. So, unlike individual actions, changes at the company level can make a much bigger dent, and much faster. 

There’s also the people factor. Customers, employees, and investors are all leaning harder toward sustainability. Companies that act on it stand out — whether that’s through improved reputation, better talent retention, or simply staying ahead of stricter environmental regulations. In short, it pays to care.

Reducing your company’s carbon footprint is essential for staying relevant, resilient, and responsible.

7 Strategies for reducing your company’s carbon footprint 

Every business is different, so deciding what your company should prioritise to significantly lower your footprint should start with understanding and measuring your emissions in the first place. The following seven strategies tend to have the biggest impact. 

1. Energy efficiency improvements

Energy efficiency isn’t revolutionary — it’s just practical. One of the simplest ways to start cutting down on your energy use is to swap out old appliances and lighting for newer, smarter alternatives.

For example, replacing incandescent bulbs with LEDs can reduce energy consumption by more than 75%. They also last longer, which means fewer replacements and lower maintenance costs. It’s a small switch with a big impact.

Case in point: not too long ago, we at Woola upgraded to a more efficient production line, cutting our energy use from 27kWh to about 5–6kWh. Needless to say, more efficient machines also means smaller electricity bills, too.

Upgrading your buildings' insulation can also help cut your company’s energy use, as you’ll need less power to heat or cool down the rooms.

2. Transition to renewable energy sources

There are a few solid ways companies can support renewable energy.

First, you can buy renewable electricity directly from your utility provider (if you have the option in your region). Many regions offer green energy programs where you pay a bit more to source electricity from wind, solar, or hydro. 

Companies can also make the existence of a renewable energy grid a priority in choosing the location for their factory or office in the first place.

Another example from Woola here: Our factory in Paldiski, Estonia, taps into the local autonomous renewable energy grid.

Secondly, companies can install on-site renewable systems like solar panels. This requires upfront investment, but in the long term, it can lower energy costs and provide more control over supply.

Finally, renewable energy credits (RECs) are often touted as a stable way to reduce your emissions. How it works:

• Each REC represents a set amount of renewable energy added to the grid (about 200 kg worth).

• When you buy one REC, you’re “offsetting” your electricity use while supporting the growth of the clean energy market.

Our beef with RECs is that companies buying them often claim they’re using renewable electricity, even if their local grid still runs on fossil fuels. While these companies support the renewable energy market on paper, they don’t actually change how the company itself operates.

If RECs are used instead of cutting emissions at the source, they can give a false sense of progress. Not all credits are created equal either — some are well-regulated and make a real impact, while others are murky at best.

Consider these tradeoffs and use RECs as a last resort if your company doesn't have other options for transitioning to renewable energy.

3. Sustainable transportation practices

Transportation is often a significant contributor to a company’s carbon footprint. Whatever materials you purchase from suppliers or ship to your customers, switching to electric or hybrid vehicles in transportation helps cut emissions.

Allowing for remote work and reducing non-essential business travel can have a significant impact, too. Fewer commutes and trips mean fewer emissions.

We’re also fans of public transport, carpooling, and cycling when possible — less pollution and traffic.

At Woola, we also make it a priority to lower the impact of transportation in our supply chain. Our main raw material — waste wool — is sourced directly from Estonian sheep farmers. This cuts transport emissions and supports the local farmers — a win-win situation.

4. Supply chain optimisation

Working with suppliers who share your values isn’t just good ethics — it’s smart sustainability. We believe real impact starts in the supply chain, so we’ve built strong relationships with local partners who share our values.

Sourcing materials locally cuts transport emissions and supports fairer, more transparent trade. Many companies create standard Supplier Code of Conduct policies for tracking carbon output, setting reduction targets, and aligning with global frameworks like the Paris Agreement. It’s like a roadmap for sustainable progress.

We work directly with Estonian sheep farmers and pay fair prices for their wool. Our Know Your Wool (KYW) due diligence process includes in-person visits and independent audits, ensuring the well-being of sheep. It’s part of how we operate every day, from farm to final product.

5. Waste reduction and recycling

The first step in reducing waste involves reevaluating complete products and logistics systems to prevent waste from being created before implementing recycling programs. We at Woola aim to build a circular system to prevent wool from going to waste in the first place and then keep the material in the loop.

One of the other ways we have want to reduce waste at scale in our supply chain is substituting transport film with reusable pallet nets and strap. We also collect all plastic film from our vendors and send it for recycling.

While our production processes are quite well optimised, there’s still a small amount of wool that turns into production waste in our factory. We don’t toss it — we experiment with turning them into new products or create mattresses that we send to Ukrainian soldiers on the front lines to keep them warm in the trenches in the winter.

Finally, one of our goals is to set up reusable cardboard box systems with our clients. This is all part of shifting away from a take-make-waste mindset toward a circular one that values durability, reuse, and long-term thinking. Circularity isn’t just a theory at Woola — it’s a daily practice.

6. Employee engagement and training

Sustainability isn’t top-down — it works best when everyone’s involved. We encourage all team members to consider sustainability in their daily work. Whether it’s how we produce wool packaging or the marketing materials we create, we think through what’s the most sustainable and least wasteful way to do things. 

We have thorough guidelines for Woola’s Work travel policies, but the first four points sum it up pretty well.

To keep the momentum going, we’ve built recognition into the process. Whether it’s a shout-out or something more tangible, we reward actions that move us closer to our business goals. It’s simple: when people feel seen and supported, they do their best work — for the planet and the company.

Everyone at Woola gets stock options because we believe ownership fuels commitment. We also offer a yearly travel allowance and health benefits that reflect how much we value our team. A better workplace makes a better impact — and we’re here for both.

7. Carbon offsetting

Aim to cut emissions at the source whenever you can. But for the parts you can’t eliminate (yet), consider carbon offset projects that actually do what they say — pull carbon out of the atmosphere honestly and verifiably.

That includes investing in certified reforestation projects, renewable energy initiatives, and monitoring carbon trading systems like the EU’s Emissions Trading System. These platforms let companies fund emissions reductions through market mechanisms and support the development of cleaner technologies.

We’re always looking for smarter and more suitable ways to do less harm. Offsetting isn’t the whole answer, but if used correctly, it’s one more tool for building a climate-positive business.

Business leaders making real emissions cuts

​Plenty of companies talk about sustainability. A few actually build it into how they go about their daily business. These three examples show that it’s possible to scale up without scaling emissions — and offer a solid starting point for anyone wondering where to begin.​

Mars Inc.

Since 2015, Mars Inc. cut their greenhouse gas emissions by 16% — that’s 5.7 million metric tons — while growing the business by over 60% and hitting $50 billion in annual sales. Sustainability didn’t slow them down. If anything, it helped drive smarter, leaner operations.

One thing that stands out is that Mars links executive pay directly to climate targets. This puts sustainability at the heart of leadership decisions. The business has recognised that its supply chain generates 96% of its emissions, so it directly engages suppliers to implement sustainable practices. Business transformation occurs because organisations step outside their borders to address real change.

Notably, Mars's goal is to reduce carbon emissions at the source and only rely on high-quality carbon credits for a relatively small portion — what they estimate to be about 20% of the 2015 baseline. Not exactly a “small fraction” as they phrased it in their 2023 sustainability report, but much better than most consumer goods-producing corporations.

Queen's Medical Centre, Nottingham

Queen’s Medical Centre in Nottingham, England, took a big step toward lowering its carbon footprint — and made life better for patients in the process.

In partnership with E.ON, the hospital launched a major energy efficiency upgrade. It included installing double-glazed windows and building a new £15 million energy centre powered by high-efficiency heat pumps.

The result? A projected 10,000-tonne drop in annual CO₂ emissions — about the same as taking 2,200 cars off the road.

As part of the modernisation project, the hospital maintains steady temperature control and improved air quality, which creates a pleasant environment for patients and medical personnel. Cost savings through reduced energy expenses will accompany the advantages of these hospital enhancements.

IKEA (as part of the Ingka Group)

The well-loved premium DIY retail franchise is committed to reaching Net Zero as stipulated in the Paris Agreement. What we love is that they haven’t just slapped “green” or “recyclable” on their products but are re-evaluating their entire value chain to cut greenhouse gas (GHG) emissions in half.

Since 2018, they’ve set science-based goals as opposed to vague ‘green initiatives’ that may or may not make a real impact on climate change.

IKEA aims to reach Net Zero by their 50th fiscal year without relying on carbon offsets at all.

The mindset behind their climate positivity efforts is making sustainability affordable, not only a luxury for those who can afford premium products. “Being climate smart is also resource smart, cost smart, and business smart,” Ingka Group says. Curious about how they’re doing this? Their Net Zero plan is available for download on their website.

Some of IKEA’s strategies include:

• Not using or selling single-use plastics.

• Simplifying product designs so they have fewer parts.

• Designing products and operating stores with circular principles.

• Selling and promoting sustainable products that help customers reduce waste.

• Offering a wider variety of healthy and sustainable foods at their restaurants.

Next steps in lowering your company’s footprint

Decreasing carbon emissions doesn’t have to start with major changes. Evaluating your daily processes and supply chain is the starting point for lowering emissions as you gain an understanding of your biggest impact areas: energy use, production methods, or waste generation.

But the most important step? Start now. The climate crisis won’t wait. Companies have the influence, the tools, and the responsibility to lead. We’re sharing what we’ve learned — what worked and what didn’t — because we want more businesses to do better. A better future is possible, but only if we build it together.

If you’re looking into cleaning up your supply chain, check out Woola’s sustainable packaging options for small items and glass bottles. You can order your free samples here.