For some time after hybrids entered the market, people were apprehensive about the vehicles. Some were concerned about long-term performance, others about price. But it wasn't just buyers who had reservations. In 2002, when a State Farm Insurance customer's 2001 Prius was involved in an accident, no dealer, body repair shop, or salvage pool would repair the vehicle or take it as salvage. Everyone was uneasy about handling such new technology.

This apprehension, however, led to the beginning of State Farm's green fleet. State Farm Vehicle Research facility, a group of certified technicians and body repair experts, had been following the advancement of hybrid-electric technology for several years and decided to use the damaged Prius as a learning experience.

State Farm Acquires First Hybrid Fleet Vehicle

State Farm paid the insured to settle the claim and the title was signed over to the insurance company. With its first hybrid fleet vehicle on board, State Farm repaired the physical and mechanical damage and documented the entire process to share with outside repair facilities. In doing so, the company created processes for hybrid-electric vehicle repair still used today. Vehicle Research facility staff have been using the 2001 Prius for local and out-of-town trips for almost eight years, and the vehicle still operates on the original batteries.

Today, State Farm's fleet includes more than 350 hybrid-electric vehicles. Beyond that, its fleet also consists of 5,076 flexible-fuel vehicles, making alternative-fuel vehicles 38.5 percent of its total 14,000 car, van, and truck fleet.

The fleet's flexible-fuel models include the Dodge Grand Caravan, Chevrolet Impala, Chevrolet G-1500, and Buick Lucerne. Hybrid models include the Ford Escape, Honda Civic, and Toyota Camry and Prius. The vehicles are used for security and claims-adjusting, motor pool transportation, and executive transportation throughout the U.S. and Canada.

State Farm first offered the Prius to drivers on its 2004 selector and gradually increased the fleet from there.

"We moved slowly into the green arena," said Dick Malcom, State Farm fleet administrator. "Drivers were encouraged to try one to see what they thought of the vehicle. From there, we continued to expand the options."

VanPool Program Reduces Travel Expense

State Farm has initiated several other green transportation programs. In 1981, State Farm started a VanPool program — a rideshare program transporting employees to work in 12-passenger vans.

The amount employees pay each month covers approximately 50 percent of the van expense and State Farm funds the remainder. The driver receives an even better deal; he or she rides for free. State Farm also purchases the vans and handles maintenance and administrative details. The company now operates more than 150 VanPool vans across the country.

At the corporate facility, employees can take public transportation to and from work for free; State Farm pays the cost. Other company locations offer a ride-share program that compensates drivers using personal vehicles to carpool. State Farm's Bloomington, Ill., facilities provide employee shuttles between buildings. Malcom said the shuttles equate to more than 400,000 employee trips annually.

"State Farm has been environmentally responsible for many years, so moving to a green fleet has been relatively simple," Malcom said. "We have received a lot of support from our executive committee."

What Gets Measured, Gets Managed

State Farm has seen major benefits from its commitment to going green. In 2002, company officials began measuring overall greenhouse gas emission intensity and reporting results to the Department of Energy. By 2008, the insurance company reduced its emissions intensity by 46 percent, more than two times the original goal of an 18-percent reduction by 2012.

In addition to reducing its carbon footprint, State Farm's green fleet initiatives have served as a public relations campaign for alternative-fuel vehicles.

"One benefit we have seen is the increased awareness among our employee population. By exposing them to hybrid-electric and flex-fuel vehicles, we help eliminate any negative preconceived notions they may have," Malcom said. "We educate employees on operation of a hybrid-electric vehicle (which most have never experienced). They are able to see firsthand the fuel economy a hybrid can obtain, and we are able to educate them on what E-85 really is and how it may impact fuel economy and vehicle performance."

Malcom recommended fleet managers take time to make the right choices when greening their fleets.

"I would suggest fleet managers move slowly into their green fleets. And always make sure the vehicle chosen will fulfill the business need it has been acquired for in a cost-effective manner."

State Farm's green initiatives expand beyond fleet and into every corner of its business. The company's paper reduction initiative provides customers several paper-free account options, enabling customers to reduce their environmental impact.

Additionally, State Farm's Web site (www.statefarm.com/about/green/energy.asp) provides tips that help drivers learn how to reduce their own carbon footprints.

On the corporate level, State Farm is committed to building energy-efficient, low-impact facilities. As of December 2008, its composite EPA Energy Star score for major facilities was 84, meaning the company's buildings are more energy-efficient than 84 percent of comparable buildings in the U.S. The company's 40-year-old corporate headquarters recently received the Energy Star.

State Farm is also committed to recycling and reusing. In 1988, the company developed an environmentally safe plan to dispose of outdated terminals and computer screens. In 2007, 3.7 million lbs. of computers and electronic equipment were diverted from landfills.

Since the 1980s, company management has continued to develop and promote recycling and waste management plans benefiting State Farm and the environment.

Malcom said State Farm plans to continue to expand its green initiatives, increasing its hybrid fleet vehicle totals and adding SmartWay Certified vehicles — an EPA designation for vehicles that receive high scores on air pollution and greenhouse gas emission reductions.

"Our pledge going forward is to have a minimum of 75 percent of our future purchases be Smartway-certified," Malcom said. "State Farm will continue to monitor and review any and all new technology — electric, CNG, diesel, diesel-hybrid, fuel cell, hybrid-electric, hydraulic, or compressed air — to determine if any are in our best interest or if they will meet our business need in a cost-effective manner."