As I understand this question, it is based on the idea that sprawl will happen or has happened and we are just trying to reduce its impact. In other words, we are not trying to prevent sprawl in this question even though that would be the best way to prevent environmental degradation.
The main way in which sprawl impacts the environment is through the fact that it requires people to do more driving. They have to drive to get to the city and they have to drive within the suburban area. The main thing to do is to reduce the amount of driving that is necessary. This could be done by having good public transit (light rail, for example) from the suburbs to the city. It could also be accomplished by making more facilities for biking and walking within the suburbs (for example, by making bike paths that kids could use to get to school).
Another impact of sprawl is on wastewater. It runs off of hard surfaces during rainy periods and can cause pollution and can prevent rainwater from replenishing groundwater. This can be mitigated by making more green space within the suburban areas. For example, there are places that put planter strips between curbs and sidewalks and channel rainwater into those areas so it can be filtered and returned to the ground.
All of these are ways to mitigate sprawl’s impact if you cannot prevent sprawl in the first place.