Energy service companies (ESCOs) have emerged to carry out energy efficiency retrofit projects, playing an essential role in mitigating carbon dioxide (CO2) emissions in China. However, it remains unclear how exactly ESCOs contribute to CO2 mitigation during urbanization and industrialization. We conducted regression analyses on data collected in 29 provinces in China as the first case study to investigate the moderating effect of ESCOs in relationships between urbanization, industrialization, and CO2 emissions. The results indicate that urbanization had a significantly negative influence on CO2 emissions. In contrast, industrialization displayed a statistically significant positive impact on CO2 emissions. ESCOs have a significant moderating effect on the relationship between industrialization, urbanization, and CO2 emissions. The analysis also revealed that ESCOs have a better performance in areas with lower industrialization and greater urbanization. ESCOs may invest more in regions with limited ESCO activities and huge CO2 emission reduction demand, while energy-saving technology innovation should be advocated in regions with sufficient ESCO activities.