Branson pledges $3bn to combat global warming

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The Independent Online

There seem to be no bounds to Sir Richard Branson's generosity - or his ability to grab the limelight. Yesterday the chairman of Virgin pledged $3bn (£1.6bn) 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 $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 $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 "$3bn 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 £90m 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 $1bn externally for the fund next year alone. Getting to the $3bn figure over 10 years will not be that difficult."

It may seem ironic that a billionaire - who owns five 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 be devoted to making air travel less environmentally damaging.

Earlier this month, he announced his first investment in bio-fuels, investing £60m in a factory in California which will make bioethanol from corn. He is 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.

But it is not pure philanthropy. Sir Richard's ambitious plans include an expansion of his main business, the long-haul airline Virgin Atlantic, by 10 per cent a year, and in the next 12 months he will seek to conquer the US with the launch of Virgin America. But on top of this, sooner or later the aviation industry will introduce some form of carbon-trading emissions scheme.

So the more that his airliners can reduce their carbon footprint, the less it will cost him.

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 would be starved of investment. But it would mean that all surplus cash would go into the green initiative.

So, is Sir Richard's pledge just a calculated commercial gamble designed to cash in on the growing consumer appetite for companies that go green? Seasoned Branson observers would say that he also has a concern for the planet.

As he has become 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 curses of malaria and malnutrition or man's determination to destroy the planet.

In a recent interview, he prophesied that in 30 years Virgin would be more famous for its good works than its consumer brands. Yesterday may have been one step along the way.

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