Nothing But Green Skies

Stubblefield was excited by the TerraPass deal and wanted to go further. He suggested a pilot project, offering offsets to renters in California. But when Farrell checked with the company's IT staff, he learned that creating the infrastructure to handle the carbon offset logistics for a market the size of California was a huge project. From an IT standpoint, the company might as well go nationwide from the get-go.

Were consumers ready for something so ambitious? The company surveyed consumers and was surprised by the response. Not only were consumers aware of carbon offsets, 45 percent said they were either "a little" or "a lot" more likely to rent from a company that offered them. "It moved the needle," says Holly Campbell, a vice president of marketing. TerraPass, for its part, had been trying to determine the best way to structure the program. Rather than calculating the cost of each individual rental, the company looked at Enterprise's total emissions from the previous year and figured out it could offset that amount by charging customers about $1 extra per rental. Thirty-six percent of consumers, as it happened, said they'd be "very likely" to pay $1 for a carbon offset. It seemed that this program would not alienate renters. In fact, it might enhance Enterprise's brand.

On May 19th, 2007, Farrell formally presented the idea to the Taylor family. He received a preliminary nod. But the plan still had to be approved by Pam Nicholson, the company's COO. He scheduled a meeting. "It sounded interesting to me," says Nicholson. But she was worried. Enterprise likes to boast that it can get a customer into a car in seven to 10 minutes. Would an offset program "fit into the process of how we do business?" Nicholson wondered. Would it overwhelm customers when what they really want is to be on their way? Nicholson presented Farrell with other concerns, as well. How would the options be woven into the rental contract? Could IT handle it? Was there a clear, concise marketing plan? "Every box had to be checked or we couldn't do it," she says.

Nicholson and Farrell decided to start slowly, making the offset option available only to customers who book their rentals themselves, either through the company's national reservation center via an 800 phone number, or through the company's website. The move will reduce the number of rentals that would have a carbon offset available, and hence the program's scope, since rentals that go through the reservation center or the website account for just one-third of the company's total business. (The rest are paid for by a third party, either a corporate partner or an insurance company paying for a rental while a car is being repaired.)

By August, Farrell had addressed all of Nicholson's concerns and brought the completed idea back to Andy Taylor. Taylor called up his sister Jo Ann, who runs the family's foundation, and they chatted about the program. He was troubled by the idea that offsets were something that customers would be paying for and concerned, he says, that it would seem "like we were just doing this for commercial reasons." Jo Ann's answer: Get the company to match the carbon offsets, up to $1 million, roughly the number of cars in Enterprise's fleet. Soon thereafter, the first contracts between TerraPass and Enterprise were signed.

The launch is set for January 1, 2008. As far as what it means for the environment, a back-of-the-envelope calculation shows that if just 100,000 customers purchase a TerraPass they will offset 12 million pounds of carbon dioxide in the atmosphere (24 million pounds, if you factor in Enterprise's match). That's the equivalent of taking about 2,000 Toyota Corollas off the road. There are lots of uncertainties. The company is still figuring out which green energy projects it will support. How many customers actually will purchase the offset? Will Enterprise receive criticism for making this available to only a third of its customers? "Our commitment is for one year," says Taylor. "We will then step back and see what our customers are saying about it. They may not want it, or we may have to step it up." In the meantime, Taylor is continuing to push his team to bring him more and different programs relating to the environment. "There's not going to be one magic bullet" that will keep cars on the road, fuel affordable, and driving socially acceptable, Taylor says. The important thing is that the company is on top of the problem. "For us, the argument over whether global warming is a problem or not is over," says Taylor. "This is a very daunting challenge that we are facing."

Alison Stein Wellner is an Inc. contributing editor.