The effective setting of offsets between intersections on arterial roads can greatly reduce the travel time of vehicles through intersections. However, coordinated control systems of urban arterial roads often do not achieve the desired effect. On the contrary, they are very likely to increase the traffic congestion on arterial roads, resulting in more delays of the platoon with more exhaust emissions, if the coordinated control system does not have effective settings. Meanwhile, taking into account increasing environmental pollution, measures are needed to solve the conflict between environmental and traffic management. Thus, in order to ensure the smooth flow of urban arterial roads while considering the environment, this paper develops a bi-objective offset optimization model, with reducing delays of the platoon on arterial roads as the primary objective, and reducing exhaust emissions as the secondary objective. The proposed bi-objective model is based on the division of platoon operating modes on arterial roads, and more pollutant types, including NOx, HC, and CO, are considered when measuring environmental impact. Further, the modified hierarchical method, combining the branch and bound approach with the introductions of a relaxation coefficient, is employed to solve the model. By introducing a relaxation coefficient, the modified hierarchical method overcomes the defects of the traditional one. Finally, Xi Dajie Road in Beijing was taken as an example. The results showed that the bi-objective offset optimization model, considering both the delays and emissions of the platoon reduced delays by up to 20% and emissions by 7% compared with the existing timing plan. If compared with the offset optimization model considering delays only, such a model increases delays no more than 3% and reduces emissions by 6%.