FirstGroup yesterday unveiled the transport industry's first "comprehensive climate change strategy", setting targets for reducing its carbon footprint both externally in its services and internally within the company.

Moir Lockhead, chief executive, said: "It's a sign of the times, the political momentum is moving in making sure that we at least are aware of the impact of carbon emissions."

FirstGroup aims to reduce emissions in stages, setting a 25% reduction target by 2020 for bus and 20% for rail.

"We have set ourselves milestones, to see whether we have delivered," Lockhead said.

The group said it will improve the fuel efficiency of existing vehicles, seek to purchase more efficient fleet, extend its use of alternative fuels, and enhance driver training and cab technology.

FirstGroup also announced that it will be working with Forum for the Future to build upon its commitment. Sally Uren, business programme director at Forum for the Future, said it was "particularly pleasing to see a transport company make such a public commitment to reducing its carbon emissions".

Lockhead said the UK bus division had achieved a 7% reduction in emissions since 2003 and the rail division 18% since 2004.

"We have a strong track record of implementing environmentally friendly initiatives. We published our first environmental report in 2000 and have for years been involved in trialling new fuel types, for example biodiesel, hydrogen, hybrids and electric buses."

In recent years, the average fuel efficiency of bus and rail vehicles has decreased, due to the need for additional abatement technology to reduce other pollutants such as nitrogen oxides and particulates. This has resulted in increased engine power and weight of buses and trains.

"Reversing this trend will be an important part of achieving the targets," Lockhead said. "In the short term this will be achieved through a combination of improvements in engineering and operational efficiency and conversion to 5% biodiesel in the bus division.

"First is already demonstrating progress in this area with the introduction of EURO IV engines to the bus fleet - 10% to 15% more fuel efficient than their predecessors."

The company will also trial "environmentally friendly driving styles" for bus drivers, and introduce a fuel efficiency training programme for train drivers.

Longer term, it will trial hybrid buses in partnership with Transport for London.

Internally, the group's new headquarters in Aberdeen has been equipped with the latest green technology, and staff are supplied with public transport passes.