Radio Taxis claims to be the UK's first major transport business to commit to cover not only the emissions produced by offices and operations but also all emissions created by the 3.8 million passengers who hail one of its cabs every year.

Renewable energy projects such as solar panels in Sri Lanka and a hydro-electric plant in Bulgaria will receive 80 percent of the money, with the other 20 percent funding forestry projects in the UK and Germany. The company is also working with manufacturers to create more environmentally friendly vehicles.

"Our corporate customers are increasingly concerned about sustainability in their supply chain, and our private customers can be assured that this is the most environmentally responsible and safest taxi journey they can take," Herbet said. "Going CarbonNeutral allows us to take immediate action in the face of climate change, and to put in place a rigorous programme designed to deliver year-on-year emissions reductions and improvements in our environmental performance," he added.

London Mayor Ken Livingstone said "I congratulate Radio Taxis on making this commitment – and hope many other London businesses will follow their lead. Radio Taxis actions demonstrate that forward-thinking businesses have an important role to play in creating a sustainable future."

[By Simon Crerar]