This work focuses on a mitigating harmonic filter. It investigates the effect of mitigating harmonic filters in the textile industry with innovative energy conservation strategies for energy bill reduction, which covers a pathway to climate change mitigation. Here, the effect of the harmonic filter is found out by the systematic energy audit methodology (Preliminary, Detailed and Post-Audit phase). From the energy auditing, it has been found that the textile industry needed a passive harmonic filter for harmonic mitigation. Since, third, fifth, and seventh order of harmonic predominantly exists in the system. The high stability at higher current, known tuning frequency, low cost, and low power consumption make the passive filter the best fit for the system. The voltage and current Total Harmonic Distortion Factor (THDF) have been measured using the class 'A' power quality and energy analyzer. The harmonic filter's effect in harmonics mitigation is prominent; 66.45% of the reduction of current harmonics is achieved after installing the passive filter at the Point of Common Coupling (PCC) of the system. Also, the reduction of harmonics ensures energy conservation by reducing additional losses (joule, copper, and eddy current losses). The techno-economic analysis with payback period calculation is carried out and reported. Also, the effect of harmonics like mechanical anomalies (temperature rise) is carefully studied using an infrared thermographic technique in the textile industry's motor loads. The energy conservation and their carbon emission reduction are calculated and reported.INDEX TERMS Carbon emission reduction, energy audit, energy conservation, harmonic mitigation, passive mitigation techniques, and power quality.