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Climate leadership Article | 7-minute read

How to develop and finance an emissions reduction plan

Fight climate change while improving your company’s performance
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Creating a plan to cut your greenhouse gas (GHG) emissions will allow you to contribute to the fight against climate change while building a leaner, more competitive business.

It’s also how your company can get ahead of growing pressure for change from governments, customers, employees, and competitors as we transition to a low-carbon economy.

Your emissions reduction plan should be part of a wider strategic planning exercise so your climate goals mesh with your company’s other priorities.

As you move through the process, it will be critical to involve employees and devote adequate resources to achieve your reduction goals.

Most emissions happen in four areas: electricity, heat, materials, and transportation. It’s a good idea to focus on your largest sources of emissions because this is where you’re going to get the biggest return on your investment.

Project ideas for your GHG reduction plan

To gather ideas for projects you might tackle, look at what other companies have done, especially those in your industry. Our Climate Action Centre also has suggestions for initiatives you can undertake to reduce your emissions.

Here are some examples of possible areas to look at.


  • behaviour change (turn off and unplug appliances)
  • simple equipment (switch to LED lightbulbs and motion sensors for lighting)
  • capital investments (invest in newer, more efficient equipment and machinery)


  • behaviour change (set thermometers lower during non-work hours)
  • simple equipment (install air curtains in doorways, low-flow aerators on sinks and low-flow nozzles on dishwashers)
  • capital investments (boiler and hot water tank retrofits, HVAC upgrades, heat pumps, install a blue roof)


  • packaging (reduce the size of packaging, use recycled material)
  • paper use (switch to e-statements, buy 100% recycled paper)
  • waste reduction and diversion, especially of organic material that is sent to landfill and incineration (reduce, reuse or repurpose waste material, improve waste sorting, use sensors to optimize waste-removal services, compost food waste, introduce new recycling streams)


  • optimized shipping (consolidate orders and shipments into one trip)
  • business travel (switch to web conferencing and fuel-efficient company vehicles)
  • fleet behaviour (reduce idling, monitor speeds, optimize routes)
  • fleet fuel switching (use alternative fuels)
  • fleet replacement (vehicle upgrades with more fuel-efficient models),
  • staff commuting (allow remote work, encourage active transportation and transit use)

Involve your team in your emission reduction plan

Your employees are the ones who will put your reduction plan into action. The more engaged they are, the higher your chances of success will be. To get their buy-in, share a vision of the low-carbon company you want to build together. Describe the benefits of implementing the plan for the company and report your progress to your staff regularly.

Employees know your operations best and can help uncover inefficiencies and ways to reduce emissions. So, get their suggestions for projects and how to get the best results. Also, make sure they get the required training, resources and management support they need to implement the plan.

How to develop an action plan for reducing emissions

To start developing your GHG emissions reduction plan, identify what are the main emission points of your business (is it heat? transport? waste? etc.).

It is also important to identify the level of effort you want to put into your reduction plan. It will depend on your will, comfort, and available resources. The best advice is don't start too big. Start by identifying the low-hanging fruits and build up from there. With your team, you can then create an emissions reduction action plan for the coming year that includes:

  • A manageable list of impactful projects
  • A timeline for achieving each one
  • The employee responsible for each project
  • The metrics to gauge your progress (milestones and key performance indicators)
  • A dashboard to monitor progress

Look at what your peers have been exploring. You can learn from them to avoid similar mistakes and strengthen your approach and plan.

Checklist for implementation

  • Add your commitment to climate action to your company’s mission statement.
  • Schedule periodic meetings with your team to monitor progress on implementation, celebrate successes and address challenges early on.
  • Revisit your action plan once you complete your initial projects. Reducing emissions isn’t a one-time event. It’s an opportunity for continous improvement.
  • Tell employees, customers and the community about your successes and share best practices. This encourages other businesses to cut emissions and is a way to share good ideas and innovation.

Quick tip: Prioritize the most impactful projects with the 80-20 rule

One method for finding the most impactful projects is to use the 80-20 rule, also known as Pareto analysis.

In the case of emissions reduction, the idea is that 20% of your GHG sources will likely produce about 80% of your emissions. Therefore, the biggest return on investment will come from those top sources and focusing your efforts on them will give you the biggest bang for your buck.

Some experts use a systems approach to sustainability, which reduces emissions by employing lean and operational efficiency methods. Such an approach could lead to significant returns on emissions projects through lower costs and better productivity.

The systems approach involves the following:

  • A walk-through of your facilities to identify areas of wasted effort, time and resources
  • Analyzing why processes are done in a certain way
  • A team effort to find new processes to address bottlenecks and challenges
  • Looking at the whole company, not just individual items of equipment or processes
  • Prioritizing conservation by first reducing energy and waste, and only then turning to greening your operations

How to finance your emissions reduction plan

Some of actions might lead to cost reduction and savings. However, your plan will likely require investments. Consider seeking grants and/or a business loan finance your projects while protecting your everyday cash flow.

When applying for a grant or loan, be prepared to show you’ve done your research on the costs of your emissions reduction plan and any financial or other benefits your foresee. Be realistic about your estimates. Overly optimistic figures could affect your credibility.

Loans and grants for reducing your GHG emissions

  • Federal programs—Consult the Government of Canada’s Environment and Climate Change Canada funding programs page to see if you are eligible for one of the programs. The federal government has also launched its Green Industrial Facilities and Manufacturing Program to provide financial assistance for projects designed to maximize energy performance, GHG emissions reduction and competitiveness for industry.
  • Smaller loans—Established companies seeking smaller amounts can apply for a small business loan. Such financing is often available quickly via an online application and can be used to buy greener equipment, software or hardware.
  • Working capital loans—A working capital loan lets companies make investments without putting their everyday cash at risk. They could be used to complement your line of credit, obtain an environmental certification, do an energy audit or hire an expert to help you develop a customized emissions reduction plan.
  • Equipment financing—Equipment financing can help you improve efficiency by modernizing operations. It can complement your line of credit if working capital is depleted by equipment costs.
  • Tech financing—Technology financing can let you buy hardware or software or hire an expert to help you plan a tech investment. This type of financing is available for all types of companies, not just tech firms.
  • Women entrepreneur fundsWomen entrepreneurs can seek financing through a variety of partners and programs dedicated to providing financing and other support for women-led businesses.
  • Start-up funds—New businesses can apply for start-up financing. Some loans of this type can be used to replenish working capital or hire an expert advisor. Futurpreneur Canada provides financing, mentoring and other resources to young entrepreneurs (18 to 39).
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