BANK OF Scotland will today claim that it has reduced its UK carbon emissions by 65% over the past two years and, in a first for a Scottish bank, will launch a new annual climate change report.

As the bank embraces the carbon-neutral challenge by becoming the first major bank in the UK and the only Scottish bank to offset unavoidable emissions using only 100% Kyoto-compliant carbon credits, the new report will reveal that managing climate change is to become a crucial part of the bank's approach.

The report confirms that the group reduced emissions from 163,000 tonnes of CO2 in 2004 to 57,000 tonnes in 2006.

"Bank of Scotland has significantly reduced its emissions, but we know there is more to do," said Shane O'Riordain, general manager of communications. "Our priority is to reduce as much as possible the CO2 we produce at source."

Meanwhile, energy-saving software designed to reduce the amount of electricity wasted by PCs left on standby is being introduced. Low-energy light bulbs are used in 80% of the bank's buildings in Scotland with the remainder being upgraded over the next five years.

And only 100% recycled paper will be used in copier machines and printers across the bank's Scottish operations. One million customers already receive paper-free statements, while a paper reduction target of at least 10% over three years has been agreed. More challenging annual reduction targets for energy use and travel will be set before the end of the year.

Stewart Stevenson, the minister for climate change, welcomed the Bank of Scotland's climate change action plan, pointing to its "robust" targets and timescales. He said: "Business has a key role to play in developing solutions to climate change and influencing consumer behaviour.

"By publicly declaring a plan with robust targets and timescales, businesses can make a positive contribution to the significant effort needed to avoid the worst impacts of climate change."

The bank's achievements have also been recognised by the WWF, whose head of business and industry relations, Dax Lovegrove, said: "WWF UK welcomes its ambitious in-house environmental work plan. Carbon management is under increasing scrutiny and we must prioritise energy saving measures and carbon reduction above all else."