Enterprise's green efforts have their origins in a pair of events that were unrelated to each other and only tangentially related to the environment. In 2000, Enterprise was served with a class action discrimination lawsuit, brought by a group of African American employees. Two years later, the company settled for $2.3 million, admitting no wrongdoing. Still, Taylor decided that it was time to institute a new era of corporate responsibility at the company. He created a new executive position, vice president of corporate responsibility, and asked a longtime employee named Mark Miller to figure out what approach Enterprise should take. He asked Pat Farrell to work with Miller, and all three agreed that no initiative would be complete without a focus on the environment.
As it happens, Taylor's father had recently taken a serious interest in the environment. In 2002, Jack Taylor gave $30 million to the Missouri Botanical Garden to catalog and preserve plants all over the world and was looking for other ways to have an impact. "My father is 85, and although he is in good health, he is always thinking about his legacy," says Andy Taylor, who speaks with his father every day. So when the senior staff met with the younger Taylor to discuss plans for marking the company's 50th anniversary in 2007, a focus on the environment seemed to be in the air.
Farrell and Miller had been researching the subject and soon came across the idea of carbon offsets. Offsets had grown increasingly popular among individual eco-conscious consumers, but aside from explicitly socially conscious companies like Stonyfield Farm and Whole Foods, few corporations had embraced them. But to Farrell and Miller, the appeal was obvious. With offsets, Enterprise could let customers mitigate the emissions created by their rentals--without requiring them to change their behavior in any other way. (See "Going Carbon Neutral") Of course, that very fact has drawn intense criticism from some in the environmental movement, who argue that offsets are a guilt-relief mechanism for polluters, rather like an indulgence sold at one time by the Catholic Church to absolve someone of sin. Offsets, critics say, do nothing to actually change polluting behavior.
But dealing with prickly environmentalists wasn't the only problem. For one thing, offsets could be a tough sell. When Farrell broached the subject with people he'd run into casually in the hallway, he got a lot of blank looks. Would consumers even get it? And speaking of customers, was it really such a great idea to remind customers that they were engaging in a carbon emitting, global warming act when they rented a car? Who would administer the program? The offset market was fairly new, with few established players. But the biggest issue was this: An offset would be something additional that customers could purchase and add on to their rental, like a ski rack or a GPS. It wouldn't be something that Enterprise would pay for directly. Farrell worried that this would look like Enterprise was asking its customers to pay for the company's environmental impact. "I didn't want it to look like we were waiting for our consumers to simply write a check for us," Farrell says. Enterprise wanted to do something about its gas-guzzling, polluting fleet of vehicles. Figuring out what, however, was proving more difficult than anticipated.
Enterprise decided to put the offset program on hold and shifted its attention to other projects, most notably fleet efficiency. The company already had 3,000 hybrids on the road. Matt Darrah, senior vice president of North American operations and the man responsible for the company's relationships with auto manufacturers, let his contacts know that Enterprise wanted to do more. The company, he said, would be willing try any vehicle with a new, fuel efficient alternative technology. Because many people treat a car rental as a kind of extended test drive for their next vehicle purchase, this could be a way for manufacturers to get new technology out in front of potential buyers. In 2006, Enterprise made its first significant purchase: 41,000 flex fuel vehicles, most of them from General Motors (NYSE:GM), that can burn either gasoline or ethanol. The cars were placed at branches located near filling stations that sold ethanol. Enterprise created in-car marketing materials, with maps showing the location of the gas stations, and trained staffers to encourage renters to fill the tanks with ethanol instead of regular gasoline. "We'll do the same for hydrogen, fuel cells, whatever comes next," says Darrah.
Environmental behavior was taking hold at Enterprise in other ways, as well. In 2006, for example, the Arbor Day Foundation, which works with the U.S. Forest Service, came calling, asking for a donation. With Enterprise's 50th anniversary less than a year away, Andy Taylor, a big believer in public-nonprofit-private alliances, committed Enterprise to contributing $50 million to planting 50 million trees over the next 50 years. Separately, the Taylor family contributed $25 million to the Donald Danforth Plant Science Center in St. Louis to create the Enterprise Rent-A-Car Institute for Renewable Fuels, with the mission of finding new plant-based fuels.
Meanwhile, out in Los Angeles, Greg Stubblefield, head of Enterprise's operations in California and Hawaii (he now runs the National and Alamo divisions), received an intriguing phone call from a tiny outfit called TerraPass, which wanted to talk about something called carbon offsets. Stubblefield was always receptive to hearing about environmental initiatives, as the California market is particularly sensitive to the subject. Back in St. Louis, as it happened, Farrell was taking another look at offsets. Barely a year had passed since he'd tabled the idea, but the concept was making a big splash. Al Gore's An Inconvenient Truth had hit the screens and the media was buzzing; even artists like the Rolling Stones and Coldplay had begun using offsets to neutralize their carbon emissions. Farrell was researching potential vendors and TerraPass kept coming up. He called Stubblefield and asked him to check it out.
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