Disarm the shame it causes by telling of God's love and His removal of sin as an issue between God & men. That is the gospel, and as people walk with our truly loving Father they will become more loving towards others and themselves. God's kindness causes us to change our minds about the way we see things and how we live life (Romans 2:4). God incites the change and we cooperate with Him to bring about the change. Acts 3:26 tells us "God raised up Jesus and sent Him to bless you by turning every one of you from your sinful ways."
Aside from knowing that Jesus took away sin a consciousness of sin doesn't do anyone any good. If you see people being hurt confront the person who is causing the pain (Paul did this a lot in his letters). If the person is hurting himself follow the Spirit's guidance and offer the him help, reasoning with him as to why what he is doing is harmful. Love keeps no record of wrongs. God doesn't count sin against anyone (2 Corinthians 5:19) but He still protects the people He loves. Jesus didn't run through neighborhoods screaming "Stop sinning!" That doesn't work, love works, God is love.