The energy sector is considered to be one of the major producers of carbon emissions. The carbon emissions represent a significant contributor to global environmental degradation. Thus, there is a need to reduce carbon emissions and promote long-term sustainable development. This study provides insights into strategic policy approaches that target carbon footprint reduction and thereby enhance energy sustainability. This study develops a decision-making framework for assessing carbon emissions and developing carbon reduction programs. Initially, the study addresses significant concerns in the energy sector using the Situation-Actor-Process-Learnings-Actions-Performance (SAP-LAP) approach. After variable identification from SAP-LAP analysis, an Interpretive Ranking Process (IRP) is applied to establish interrelationships between actions and performance measures, and finally, actions are ranked. The results from the study underscore the necessity of proactive efforts such as carbon pricing mechanisms, subsidised and incentive energy utilization plans, and personnel and sustainable infrastructure requirements for enhancing energy resource efficiency to promote sustainability. The results highlight the necessity for strategic efforts and policies to reduce carbon emissions and support the goal of sustainable energy development. The findings from the IRP approach conclude that major initiatives, such as Government approvals, strategic planning, and smart grid integration, are the most effective steps in reaching carbon neutrality. Such findings present actionable recommendations for policymakers and business leaders to help make investment decisions and policy interventions to speed up the shift to clean energy. This study offers a novel contribution by identifying practical policy aligned actions and prioritizing them to strengthen overall performance while reducing emissions in the energy sectors of developing economies.