Nothing But Green Skies

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.

Stubblefield went to San Francisco and was intrigued by what he learned. Founded by a group of Wharton School grads in 2004, TerraPass had created a way to calculate the amount of carbon emissions consumers generate when they drive, fly, or heat or cool their homes, and how much investment in green power it would take to neutralize those emissions. The company figures that it takes $9.95 to offset 2,500 pounds of carbon dioxide, roughly what an airline passenger is responsible for on a 6,000-mile flight. The company works with three types of green energy projects: wind farms, "cow power" (in which methane is harvested from cow manure and used to power generators that feed electricity back into the grid), and capturing landfill emissions. Like most people, Stubblefield was especially tickled by the cow manure solution. As soon as he heard about it, he rang Farrell up to give him an earful on biomass. Stubblefield also approved a small project. Enterprise had a vanpool business in California. TerraPass offered to provide free carbon offsets to existing vanpools and sell them to drivers as new vanpools formed. "We wanted to demonstrate that we could work together before we did anything more adventurous," says TerraPass's Tom Arnold.