Branson makes stand over environment

There are no bounds to Sir Richard Branson's generosity - or his ability to grab the limelight with eye-catching publicity initiatives.

This morning (NZ time) the chairman of Virgin caused gasps of astonishment among the world's philanthropic business community by pledging US$3bn over the next 10 years to combat global warming.

The offer, made in New York at the launch of the latest Clinton Global Initiative, exceeded the total amount pledged from all quarters at last year's event and eclipsed the contributions of other donors.

By comparison, the US$10m contribution Siemens, Europe's largest engineering company, volunteered to tackle health problems in rural China seemed positively mean.

Sir Richard told a news conference that the US$3bn would come from all the profits he expects to make from his airline and rail businesses in the next decade.

Downing Street described it as "an extremely generous offer" while the campaigns director of Greenpeace, John Sauven said "Three billion dollars is a lot of money in anyone's books".

It will also be an extremely tall order, since Virgin's various air and train ventures contributed only US$170m to the group's coffers last year.

That means they will either have to start making a lot more money or Sir Richard will have to look elsewhere for contributions.

His spokesman, Will Whitehorn, confirmed that it would be the latter.

Not all the money - perhaps not even the lion's share - will come from Virgin profits.

"We think we will raise US$1bn externally for the fund next year alone.

Getting to the US$3bn figure over ten years will really not be that difficult."It may seem ironic that a billionaire who owns five separate airlines - the fastest growing source of greenhouse gas emissions - and who is now preparing to launch tourists into space, should be so concerned about global warming.

But the bulk of the money which Sir Richard aims to inject will devoted to making air travel less environmentally damaging.

Earlier this month, he announced his first investment in bio-fuels, putting about £60m into a plant in California which will make bioethanol from corn.

He is very shortly due to unveil plans for a bio-diesel plant to be built in Britain.

Longer term, money will be invested in research and development to produce new eco-friendly fuels for ground transportation.

It is not pure philanthropy.

There is plenty of business self-interest for sooner or later the aviation industry will be brought into some form of carbon trading emissions scheme.

The more that Virgin Atlantic and his other airlines can reduce their carbon footprint, the less it will cost them.

Yet, at the same time as Sir Richard is fighting global warming, his planes will be adding to it.

Not only are their ambitious plans to expand his main business, the long-haul airline Virgin Atlantic, by 10 per cent a year but in the next 12 months Sir Richard will seek to conquer the US with the launch of Virgin America.

Most companies use their profits to re-invest in the business.

Either they are used to pay dividends on the capital raised from shareholders or they pay the interest on money borrowed.

Mr Whitehorn was at pains to stress that Sir Richard's extraordinary act of generosity would not mean his train and plane companies being starved of investment in future.

But it would mean that all surplus cash would go into the green initiative.

Is it an act of pure philanthropy born of a deep concern for the planet? Or is it a calculated commercial gamble designed to cash in on the growing consumer appetite for companies that go green? Seasoned Branson observers would say it is probably a bit of both.

But as Sir Richard has gotten older, and richer, more and more of his time and wealth has been devoted to good works - be it fighting the spread of HIV in Africa and the twin curses of malaria and malnutrition or man's determination to destroy the planet.

In a recent interview, he prophesied that in thirty years Virgin would be more famous for its good works than its consumer brands.

Yesterday may have been one step along the way.

- INDEPENDENT