Despite considerable debate over the environmental effectiveness of industry agreements, there remains a lack of systematic comparative data as to which design features most influence their ability to encourage corporations to reduce environmental impacts. Using an analytical framework to assess the motives for, negotiation and implementation of industry agreements, this paper reviews agreements developed in Australia, Germany and the UK to regulate industrial greenhouse-gas emissions. It is argued that, contrary to the popular view that agreements are generally useful only as transitional instruments on the way to legislation or economic instruments, they can act as important drivers of change in corporate attitudes and behaviour, especially when combined with the threat of economic instruments. Conclusions are drawn on the merits of different design features to improve the environmental performance of agreements, including reporting, monitoring, and the use of legal and financial sanctions to ensure compliance with agreed targets.