The company that owns more cars than any other in America is buying more electric vehicles.

Andy Taylor, who is chairman and chief executive officer of Enterprise Holdings, which owns the flagship Enterprise Rent-A-Car brand as well as Alamo Rent A Car and National Car Rental, said at a Washington energy forum today that the company is expanding its offerings of electric cars as fast as it can.

Andy Taylor of Enterprise Holdings

“We are finally getting the vehicles in some numbers,” Taylor said, at the National Summit on Energy Security, where he and Fred Smith, chairman, CEO and president of FedEx Corp.

Smith, too, made an impassioned plea to electrify the U.S.’s cars and light trucks. If the goal is to displace imported oil, Smith said, “there has never been a technology that offers this much opportunity,” he said.

While it’s great to see CEOs of big companies pushing electric cars, the numbers we’re talking about remain small. I emailed Lee Broughton, head of sustainability for Enterprise Holdings, and asked him how many vehicles the company is buying. He replied:

We have approximately 80 EVs today and just shy of a dozen Volts. By calendar year end we’ll have many hundreds of EVs and definitely many more Volts (provided they give them to us) and anticipate I-miev (Mitsubishi). We also have a dozen Peugeot i-on’s in London too. All with a charging station infrastructure across the locations receiving them.

…According to TreeHugger.com, Nissan has sold approximately 4,000 LEAFs in the U.S.; Enterprise has purchased 500, or 12.5% of all LEAFs sold as part of its roll out of the nation’s largest EV rental fleet.

Altogether, Enterprise owns more than 1 million cars and trucks, making it the world’s largest car rental company. Here’s the company’s announcement.

More significant than the numbers, perhaps, is the enthusiasm these companies are showing for EVs. Both CEOs said the economics of EVs is compelling, and that the climate and national-security benefits are real.

Taylor said his company will go ahead and purchase EVs with or without government incentives. He said customers want then, and Enterprise workers are excited by them.

“It is our family’s philosophy that, regardless of what the tax incentives are at this point, that this is coming, it should come and we should help it,” Taylor said. “If we don’t make money on these for some years, fine. Eventually, we’ll make money.” As the leader of a family-owned, privately-held company, he can afford to think long term. “We don’t have to worry about quarter to quarter.”

Fred Smith of FedEx

As a U.S. Marine Corps veteran who served two tours of duty in Vietnam, Smith has credibility talking about national security. Dependence on oil imports, he said, is “one of the greatest dangers this country faces….We’re still hostage to the vast majority of oil reserves owned by national oil companies, many of which are owned by governments that are antagonistic to our interests.” By contrast, there’s more than enough spare electricity generating capacity in the U.S. to power many millions of electric cars.

His company also has a lot at stake. FedEx, he said, burns about 1.5 billion gallons a year of petroleum fuels in its trucks and planes. Revenues last year were about $35 billion, so fuel costs matter. There’s also the history of FedEx to consider. “We were almost killed in the cradle by the Arab oil embargo.”

Smith is no treehugger. He strongly supports domestic oil and gas drilling. But, he says, electric vehicles can play a big part in reducing oil imports–and, more important, they are fun to drive.

“If you get into a Leaf or Volt, these are wonderful cars. They are terrific in every respect. They aren’t golf carts,” he said. Best of all, it costs 70 to 80% less per mile to operate an electric vehicle, depending on gasoline prices.

Battery prices will have to come down to make electric cars more competitive with conventional vehicles, Smith said, but he predicted that they would drop by as much as 40% in the next five years.

Taylor and Smith argued that government needs to help stimulate the growth of electric cars, by supporting EV charging infrastructure. Of course, the government is already subsidizing electric cars–with tax credits of up to $7500 for electric-car buyers as well as loans to battery makers like Ener1. Smith’s a political conservative, but he said that when the costs of electrifying the fleet, when compared with the benefits,  are “a pittance.”

This is a clean-energy technology that can’t arrive too soon.

Today, few words but a couple of videos instead, one from the left and one from the right (because we strive to be nonpartisan here at www.marcgunther.com).

The first, from the activist group Rainforest Action Network, is about the tragedy of mountaintop removal coal mining. RAN is running a campaign against banks that finance mountaintop removal, notably PNC, Citi and UBS. More here.

One thing I learned from the video: MTR coal accounts for just 7% of the coal burned in the U.S. Is this really necessary?

The second one-minute video comes from the conservative end of the political spectrum, namely, Fred Smith, the founder and CEO of FedEx. An advocate of electric cars, Smith is bothered by America’s dependence on imported oil.  He’s got a business agenda of course–high oil prices hurt FedEx–but the benefits of electrifying the U.S.’s transportation sector go well beyond cost to include reduced greenhouse gas emissions, air pollution and national security:

Thanks to Mitch Jackson for posting this on the FedEx blog. More info here. I’d encourage Fred Smith to talk to some of his Republican friends about why the threat of climate change is worth taking seriously.

If climate regulation will burden businesses or increase costs,  then why are so many companies strengthening their voluntary response to the climate crisis in the midst of an economic downturn?

The reason is, there’s a race to the top when it comes to sustainability, particularly among consumer companies. No one wants to be seen as a laggard by  customers, workers, NGOs, government or the press.

Reputation matters. Ignoring the climate emergency is no longer an option for a big consumer brand.

That, as far as I can tell, is why so many companies are surging ahead in the third annual corporate climate scorecard put together by the nonprofit group Climate Counts. Gary Hirshberg, the CE-yo and “main moover” behind of Stonyfield Farms (yum) put up the money to start Climate Counts, and Wood Turner is its able executive director.

“We see a real competition ensuing, as companies race to the top,” Turner told me the other day, as the new ratings came out. “Companies are preparing their businesses and their brands for the future.”Once again, Nike (83 points out of 100) and topped the Climate Counts list. Bringing up the rear are Jones Apparel Group (7), VF Corporation (6), Viacom (3), Burger King (10), Wendy’s-Arby’s Group (2), PNC Financial Services (3), SunTrust (2), Regions (1), ExpressJet (7), AirTran (5) and SkyWest Air (0).

In the argot of the NGO world, this is known as “rank ‘em and spank ‘em.” And it seems to work.

According to Turner, whenever an updated list comes out, his phone begins to ring. And we are seeing companies start to boast about their rankings. UPS, which ranked No. 1 in the shipping category, loves to outperform archrival FedEx, so the company issued a press release today to call attention to its ranking.

So long as we’re keeping score, let’s also note that Coca-Cola beat PepsiCo, Microsoft outperformed Google, HP nosed out IBM and Marriott crushed Starwood in the 2009 Climate Count rankings.

More meaningful is the fact that many companies made dramatic improvements to their scores. Among the big gainers were Levi Strauss, eBay, Disney, Nokia, PepsiCo, Yum! Brands, Darden Restaurants and US Airways. (Thanks to Mother Nature Network blogger Shea Gunther for pointing this out and, no, we’re not related, at least as far as we know.) The entire electronics sector scored above 50, Turner noted, as did consumer shipping.

One last thought about this list–it’s signal that “green products” by themselves aren’t enough to signal a company’s sustainability commitment. Clorox, for example, has its GreenWorks line of products, but it ranks last in the household products category, far behind P&G. Green companies Method and Seventh Generation aren’t rated but it’s a safe bet they would do well. Climate Counts plans to come out with an iPhone app soon to help environmentally conscious shoppers.

The bottom line: Smart companies aren’t just making “green products.” They’re taking a deep look at their sustainability practices–thanks to groups like Climate Counts.

When you need to ship a package, how do you choose between FedEx and UPS? Their services are similar, if not identical. While I’ve never compared prices, I assume they are roughly equivalent.

Could the company’s sustainability practices come into play? I’m told that they do, for select customers. Their employees care as well–people want to work for companies that are helping to solve the world’s big problems, like climate change. Regulators could also be paying attention. Whatever the explanation, FedEx and UPS are competing to become known as the most sustainable shipping company–which means we’re all winners.

FedEx's efficient Boeing 777 freighter

Mitch Jackson, who is staff director of  environmental affairs and sustainability at FedEx, met with me recently to make the case on behalf of FedEx. He says the company has identified four “building blocks” of its approach to the environment. They are:

Leadership

Innovation

Performance

Transparency

FedEx has room to improve in all four areas, he admits, but he adds, pointedly:

Importantly, FedEx is the only company in our industry striving at all four simultaneously.

Take that, Brown.

My meeting with FedEx was no accident. Last month, after interviewing a sustainability executive from UPS, I blogged about the FedEx-UPS competition. (See UPS to FedEx: We’re Greener Than You.) Understandably, FedEx asked for equal time, so I met with Jackson, a longtime FedEx executive (and speaker at FORTUNE’s Brainstorm Green conference) during his recent visit to Washington.

I can’t say that he persuaded me that FedEx is greener than UPS. You can make arguments on behalf of either firm, particularly because there’s lots of disagreement between them about what metrics to use. Newsweek’s very flawed rankings put UPS slightly ahead of FedEx. By contrast, a nonprofit called Climate Counts ranked shipping companies and gave FedEx the edge over UPS and the U.S. Post Office.

There’s also debate about who got going first when it comes to the environment. FedEx likes to talk about its ambitious and successful partnership with the Environmental Defense Fund to create a market for hybrid trucks, which began back in 2000. This, Jackson said, makes FedEx the pioneer when it comes to alternative vehicles. UPS followed, helping the market for hybrids to grow. “When UPS decided to buy some hybrid-electric vehicles, candidly, we were thrilled,” he said. UPS’s retort? They’ve been using electric cars since the 1930s.

Enough tit-for-tat. What seems clear to me after talking to Jackson is that FedEx is doing a lot of things right when it comes to sustainability. Some highlights:

Having said that, it’s clear to me that many of the steps taken by both FedEx and UPS to reduce pollution and emissions are driven more by economics — specifically, by a desire to save fuel — than by climate change worries. FedEx, for example, recently took delivery of its first Boeing 777 freighter, uses less fuel and produces fewer emissions than the rest of its fleet. Even better, it can fly from FedEx’s Memphis hub to China without having to stop for refueling in Anchorage, as its older planes do.

In the end, motivation isn’t the issue. As Jackson put it: “We try not to separate the issue of “green” from economics. They go together.”

What’s encouraging is the competition. When UPS and FedEx,  Coca Cola and PepsiCo, HP and Dell compete around “green,” the environment is better off. UPS recently took the shipping rivalry to a new level by deciding to offer customers a “green” option of paying a small fee, between 5 and 20 cents, to offset the carbon emissions of their shipping. Here’s the announcement.

Your turn, FedEx.

FedEx's Mitch Jackson

Like sports rivalries, corporate rivalries are fun. Think about the TV ad campaigns inspired by the competition between Microsoft and Apple. FORTUNE once put the Roger Enrico, who was then the CEO of PepsiCo, inside a Coke bottle on the cover of the magazine, and the Pepsi people didn’t forgive us for years.

These days, to my delight (and, I hope, yours), big companies are battling over which one is more sustainable. I’m sure Michael Dell wasn’t happy to read that Hewlett Packard landed atop Newsweek’s new sustainability rankings of the S&P 500 companies, even though Dell was right behind at No. 2. Coca-Cola and PepsiCo monitor each other’s environmental initiatives nearly as closely as they vie for shelf space at Wal-Mart, which, not coincidentally, keeps an eye on the greening of all of its suppliers.

Now UPS and FedEx, longtime and intense rivals, are going at it.

Last week, as soon as I sat down with UPSers Scott Wicker, who runs the plant engineering group and oversees sustainability, and Lynnette McIntire, director of global reputation management, to talk about UPS’s new sustainability report, they made a point of telling me that UPS is doing a more thorough job of measuring its carbon footprint than FexEd and that UPS runs a more efficient, and therefore less polluting, fleet of aircraft than its rival.

Describing UPS’s carbon-footprint rivalry with FedEx, McIntire says: “We never used to talk about the competition. We’re over that now….This is a big deal for us for a lot of reasons.”

It apparently matters to FedEx, too. The company supplied me with a quick response to UPS, which I’ve attached below. I’ve also agreed to sit down with FedEx’s sustainability people to give them a full opportunity to tell their story.

More is at stake than bragging rights. Forward-thinking customers will want to do business with the more sustainable firm. The environmental back-and-forth also ties in to a bigger reputation battle between the two firms over labor issues being fought out in Congress. (See, for example, brownbailout.com, FedEx’s anti-UPS website.”)

What’s healthy is that the companies are going to watch-dog one another’s claims. That’s also a useful reminder to look closely when companies make assertions about their environmental practices because it’s hard to be, er, absolutely, positively sure what’s meaningful and what’s not.

Consider, for example, the fact that both UPS and FedEx have said they will reduce emissions from their airlines by 20% between 2005 and 2020. Both claims are factual but, as the chart (below, sorry it’s a bit small) supplied by UPS shows, UPS has already reduced emissions by 28%, to a level well below those of FedEx. Its CO2 pounds per available ton miles was 1.54 in 2005, while FedEx’s was 2.26. The result is that, even in 2020, FedEx won’t be as efficient or as low-carbon as UPS was in 2005.

Of course, UPS wasn’t thinking about its carbon footprint back in 1990 when it began buying more efficient aircraft engines and planes. “We did it to reduce our fuel burn,” Wicker said, and to cut costs. But the company has been consistently retiring older, smaller, noisier, fuel-guzzling planes and buying newer, larger, quieter and more efficient ones. UPS’s fleet “is the most efficient cargo airline in the industry,” Wicker says.

More broadly, the UPSers – that’s what they call themselves – note that their company measures its carbon footprint more accurately than does FedEx. UPS includes its buildings, trucks, trains and planes, as well as its use of electricity and the carbon burned by outside contractors. (That’s Scope 1, Scope 2 and Scope 3, for carbon geeks who are reading along.) FedEx does not include the emissions of many of its drivers because they are independent contractors. “If you are going to make a decision on who to ship with based on who’s most carbon efficient, you have to compare an apple to an apple,” Wicker says.

But does anyone pick a delivery service based on carbon? Actually, yes. Some European companies are factoring sustainability into their shipping decisions. So is the U.S. government, and in particular EPA, which  signed a contract with UPS after company officials told their story to EPA admin Lisa Jackson. By the way, the U.S. Post Office, another competitor, hasn’t measured its carbon footprint yet.

When I mentioned that FedEx at least deserved credit for its pioneering work with the Environmental Defense Fund to develop the market for hybrid trucks, the UPSers responded that they’ve got more alternative fuel vehicles – about 1,800 – on the ground than FedEx. “We’ve tested compressed natural gas, liquid natural gas, propane, hybrid electric, all electric and then we have a new vehicle that EPA worked with Eaton to build that’s called hybrid-hydraulic,” Wicker said.

Interestingly, though, most of UPS’s footprint—about 53%–comes from its planes. And while the company is becoming more efficient—that is, emitting less carbon for each ton of cargo—its carbon footprint is growing in absolute terms. That’s bad for the climate, of course.

UPS can’t see a way to reduce its emissions in absolute terms without turning away business, Wicker says. They already try to route packages to the most efficient mode of transport – ships are better than trains, which are better than trucks, which are better than planes. But the company is counting on the development of biofuels for jets to achieve its 20% by 2020 carbon target.

“To do the things that we need to do to affect climate changes—to really turn things around – it’s going to take technology,” Wicker says.

As I said, I’m hoping to tell FedEx’s story in a future column. Afterwards, I’ll try to sift through the competing claims. In the meantime, here is the response that FedEx’s people provided to me on short notice:

FedEx has been focused upon efficiency and environmental stewardship for years. In fact, absolute CO2 aviation emissions from FedEx over the past four years have declined by 17% and will do so domestically for years due to aircraft replacement and operational efficiency improvements underway now. In addition, emissions per available-ton-mile decreased by 8% from 1990 through 2005. The 20% reduction goal that FedEx established last year, that others have referenced and copied, has a 2005 baseline, so is in addition to the 8% reduction achieved by 2005.

It’s also important to note that FedEx reduced emissions while reducing noise quickly through a retrofit hushkit program collaboratively developed and made available to other airlines. This allowed us to be a good neighbor and helped others purchasing the hushkits as well, rather than continue operating noisy aircraft.

Is environmental progress a battle or a common goal for the betterment of all?

FedEx absolutely competes for superior service and reliability in package shipping.  When it comes to the environment, we believe that a rising tide lifts all ships and want the tide to be environmental innovation.

As noted, another example is hybrid technology. FedEx’s partnership with EDF was intended to spur change in the industry, and it’s done just that, with close to 100 fleets, including UPS, adopting hybrid technology. We’ve continued in this nonproprietary fashion and earlier this summer worked with suppliers to develop a more cost-effective process through which truck owners can retrofit older standard vehicles into hybrids. We hope that more in the industry will adopt this approach. It wasn’t our first-in-business usage of hybrid electric commercial trucks that was a competitive advantage. Rather, it was the drivers of those hybrid trucks, along with other team members, providing outstanding customer service each and every day that is the competitive advantage.

For what it’s worth, Newsweek’s Green Rankings put UPS at No. 85 and FedEx close behind at 93. More to come. Your comments are welcome, as always.

Crawling, stop-and-go traffic is an annoyance to most drivers. To Eaton Corp., a $15-billion a year FORTUNE 500 company based in Cleveland, it’s a business opportunity.

That’s because, as anyone who has driven a Toyota Prius knows, the stopping and starting, braking and accelerating required in traffic is ideal for hybrid-electric engines, which capture energy from brakes and turn it into electric power.

President Obama checks out a hybrid truck

So Eaton, which has been developing electrical and hybrid power systems for trucks and buses for more than 20 years, is now building a nice business around selling hybrid power systems for commercial vehicles. On a California trip last spring, President Obama got a sneak peak at a plug-in hybrid electric utility truck with a power system developed by  Eaton.

According to Alexander M. “Sandy” Cutler, Eaton’s chairman and CEO, the hybrid truck industry—while much smaller, and not nearly as visible as the hybrid car business—is finally taking off.

“It’s ramping quickly, and that’s encouraging,” Cutler told me in a recent telephone interview, largely because the technology, economics and policy are coming together. Delivery trucks are the early adopters, but others will follow, he says: “If you think about a truck that’s going make to hundreds of stops a day, they’re going through the acceleration and deceleration process. That’s right when hybrids hit their sweet spots.”

Customers include FedEx, UPS, Coca-Cola Enterprises, PepsiCo and Wal-Mart, all of whom own and manage big truck fleets.

What’s interesting about this story is that its impact goes well beyond a single company going “green.” If hybrid-electric power systems for trucks and buses achieve economies of scale, they could transform an industry—replacing thousands of diesel-powered vehicles, dramatically reducing fuel consumption and curbing greenhouse gas emissions and other pollutants. It’s this kind of industry transformation that’s needed to address the dangers of global warming.

By itself, Eaton can’t change the industry, of course. But the company has had help selling its hybrids from a key customer, FedEx, and from the nonprofit, business-friendly Environmental Defense Fund.

Back in 2000, EDF and FedEx formed a partnership to promote hybrid-electric trucks. The idea was to use FedEx’s purchasing power to encourage truck manufacturers to produce the vehicles. Eaton was selected as the first supplier of the power trains, and a couple of prototype trucks were put into service in 2004 in Sacramento, with kudos from California Gov. Arnold Schwarzenegger. After FedEx took the lead, UPS, which has made its own substantial investments in alternative fuel vehicles, got into the game in a hurry.

Today, Eaton makes three distinct hybrid platforms, each of which delivers fuel efficiency and environmental benefits. They are:

Hybrid electric. These are the systems used by FedEx and UPS, and they are now available as a factory-built option at four major U.S. truck makers. Truck and bus manufacturers in Europe and Asia are selling them as well.

Hydraulic Launch Assist systems. The HLA system is designed for heavy vehicles, like garbage trucks, which make lots of stops and starts. Waste Management is an early customer. These engines are quieter as well as cleaner—a welcome development for anyone who’s heard a garbage truck screeching on the street.

Series hydraulic hybrid systems. Eaton’s getting subsidies from U.S. EPA and the U.S. Army to develop an “infinitely variable hydraulic drivetrain” which will improve fuel economy by 50 to 70%.

I don’t claim to understand these technologies—if you want to know more, here’s an explanation from Eaton’s website—but the particulars are less interesting than the idea that sustainability, broadly defined, can be an engine of innovation.

To be sure, Eaton was driven by economics, above all. “We started with the base conviction that we live in a world where fuel economy is increasingly important, and where carbon footprint is increasingly important,” Cutler says. So were customers like FedEx and UPS. But the Environmental Defense Fund and Schwarzenegger got involved because the hybrid trucks deliver substantial environmental benefits, too.

“As fuel prices continue to rise, fuel-efficient trucks are an investment every company should be making,” EDF’s Gwen Ruta says. “And since hybrids also reduce air pollution, oil dependency and climate change, they’re not only good for business but good for America.” (EDF tells the story here. Disclosure: I’ve done research and writing for EDF.)

As with hybrid cars, hybrid trucks cost more up front than conventional diesel-powered trucks. “Probably the payback is two to two and half, maybe three years longer than it would be on a traditional truck,” Cutler says. That depends on the cost of diesel fuel, of course.

Eaton makes the hybrid power trains at factories in Michigan and North Carolina, but Cutler says “a lot of competitors are developing around the world.” He says U.S. industry’s annual production of hybrid platforms is still below 2,000; it probably needs to get to 10,000 to achieve economies of scale. “The U.S. currently has the lead in commercial vehicle power trains,” Cutler says, in contrast to cars, where Japanese automakers are setting the pace. His hope, of course, is that American companies and particularly Eaton will stay out in front.

To listen to a podcast or read a transcript of my interview with Sandy Cutler, visit Greenbiz.com.