HBOS to be 'carbon neutral' by end of 2007

HBOS announces it will be 'carbon neutral', by the end of the year. 'Carbon neutral' means the group is committed to producing zero net CO2 emissions through its UK operations.

Carbon reduction comes first

The group's climate change strategy is based first and foremost on carbon reduction. Carbon offsetting plays a secondary role at HBOS.

Since 2004, HBOS has reduced CO2 by nearly two thirds (65%), from 163,000 tonnes in 2004 to 57,000 tonnes last year. This reduction is equivalent to the emissions generated by 17,500 homes in a year.

This very significant reduction in emissions has been primarily achieved through green electricity contracts that the Group put in place for all its UK operations a number of years ago. Other energy saving measures have played a part too.

Major new initiatives

Three major new initiatives are being rolled out by HBOS in 2007. They are designed to further reduce and/or offset the group's remaining UK emissions.

Green Miles

A business travel scheme called 'Green Miles' will be launched on 2nd April by HBOS.

The principle behind Green Miles is a simple one. A business trip that is not taken means less carbon emissions and a financial saving for the group. That financial saving is being shared between HBOS and good causes through the group's £m Challenge.

Three charities – the British Heart Foundation, WRVS and the Family Holiday Association – could benefit by up to £500,000, if the Green Miles target is met. That target is to reduce the rate of business travel growth by half, or over 5.5m miles, within 12 months.

Carbon offsetting

Carbon offsetting means netting off the CO2 an individual or an organisation produces by funding a reduction elsewhere. HBOS will purchase a Kyoto regulated carbon credit to offset its projected 2007 UK emissions. The purchase will be conducted through the group's Treasury department.

Green Mortgages

HBOS will launcha Green Mortgagein the second half ofnext year. It will be designedto help customers reduce or offset the impact of their home on climate change.

Shane O'Riordain, General Manager, Group Communications, said: "Our main focus is on reducing our UK carbon emissions. We have made very good progress in doing so.

"The initiatives we are announcing today mean that the group will become 'carbon neutral' before the end of the year."