News: Branson launches environmental initiative
Flights > News > # 982 (25/09/2006)
Sir Richard Branson has committed to spending all future profits from his airline and rail businesses on combating global warming.
The Virgin Group chairman said the money – an estimated £1.6 billion over the next decade - would be spent on renewable energy initiatives within his company and on investments in bio-fuel research, development, production and distribution, as well as projects to tackle emissions contributing to global warming.
The 56-year-old entrepreneur said: “We have to wean ourselves off our dependence on coal and fossil fuels. Our generation has the knowledge, it has the financial resources and as importantly it has the will power to do so.”
Branson unveiled his plan at a news conference at the Clinton Global Initiative, a summit run by former U.S. President Bill Clinton to combat world problems. Clinton said: “Richard's commitment is groundbreaking not only because of the price tag -- which is phenomenal - but also because of the statement that he is making: clean energy is good for the world and it's good for business.”
Branson’s pledge comes a day after the Bush administration said it was committing $3 billion to climate technology research and development. Climate experts and members of Congress criticised the administration's plan as long-delayed and inadequate.
Branson said alternatives to conventional oils and coals were urgently needed.
“I really do believe the world is facing a catastrophe and there are scientists who say we are already too late, but I don't believe that is the case. The majority of scientists think we can still do something about it,” he added.
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Comment:
Well, we'll get the cynical stuff out of the way first:
- Only Sir Richard could pass off an investment decision as a charitable gesture.
- How much profit will actually be declared – and therefore go to good causes - considering the volatility in the industry?
Obviously the exact details of Branson's proposals need to scrutinised, but this is still a very significant move, and one which must be broadly welcomed. Until now, airlines can be divided into two camps when it comes to environmental issues - those which simply want to bury their heads in the sand and pretend that these issues don't exist, and those which wax lyrical about how fuel efficient their fleets have become, but then seek to shout down any possible environmental legislation, by claiming that they are the good guys, and that they are part of the solution, not the problem.
Improving fuel efficiency is certainly a very important part of cleaning up the airline industry's act, but it cannot be forgotten that such measures are always going to be in any airline's self-interest, just as much as they are in the interests of the environment. Fuel efficiency is not just about using the most modern available aircraft, it is also about maintaining the highest possible occupancy levels, and avoiding congested airspace and airports. This is much easier for a no-frills airline to do than it is for a long-haul carrier like Virgin Atlantic, but the Virgin group does also include the Australia-based Virgin Blue budget airline, as well as Brussels-based Virgin Express.
One of the main criticisms of airlines who place all their emphasis on improving fuel efficiency is that the environmental damage caused by aviation will continue to rise if the growth in passenger numbers outstrips these efficiency gains. The most logical and simplistic response to Sir Richard's gesture would just be to say that if we really want to stop all this environmental damage completely, then we should all stop flying tomorrow. Of course, flying isn't the only culprit, so would also have to stop driving, taking the train, eating, breathing, and so on. Discarding the plane completely is beyond the calls of even the most radical environmentalists, so the real question is about how to make sure that the environmental damage can be mitigated.
We were initially sceptical about Branson's inclusion of trains in this gesture, considering how much the taxpayer forks out to subsidise the West Coast mainline. However, his acknowledgement that train travel, including trains powered by electricity, is also a major contributor to global warming, is very significant. Just as environmentalists will often complain that airlines do not fully appreciate the scale of the environmental damage they are causing, airlines will quite rightly counter with the fact that much of the attention which is currently being given to the environmental impacts of flying is unfair, considering that flights are only responsible for between two and five per cent of the man-made contribution to global warming.
There are various websites which will encourage people to offset the emissions of their flights, or to become a carbon neutral driver, but how many of them give the same opportunities for a carbon neutral train journey?
Much of the focus of the current political cry against aviation is aimed at the no-frills airlines, and their rapid expansion plans, especially when airport development encroaches on green belt land. We've always felt that such an approach is only really targeting a very small part of the problem, especially as the rising popularity of cheap flights is as much down to the inevitable consequences of deregulation as it is down to any single airline's aggressive marketing. Long-haul flights might be more efficient in terms of the amount of fuel burned per mile travelled, but because of the distances covered, they are responsible for the lion's share of the environmental damage caused by the aviation industry.
As we move through the party political conference season, we continue to hear cries to slap more taxes on aviation. We have no doubt that Branson's move is an attempt to show that such taxes are not necessary, and that his airline can be trusted to counter its own emissions. Bransons' investment in renewable energy sources and environmental projects is essentially a form of voluntary carbon trading on a grand scale. This effort is laudable, but is it really a solution that other airlines can follow?
Branson has the luxury of being able to use his own private funds, so he can invest them or give them away as he wishes. The bearded knight is one of Britain’s greatest public relations opportunists, right up there with the Beckhams and the Blairs, and he has pulled off another huge media coup with his latest move.
The estimated $3 billion Branson is “giving away” to environmental causes coincidentally matches the value that the ‘Branson brand’ adds to the value of his businesses. However, to put it in context, it is also matches the figure that the Bush administration has recently committed to renewable energy research and development. Is this a reflection of how seriously Branson is taking global warming or how little Bush and his cronies care about the environment?
Whether you are one of the growing band of Branson cynics, or you believe he is doing this for genuinely altruistic reasons, the key question remains – will the environment benefit?
In truth, we simply don’t know yet, but as former president Bill Clinton said after Branson’s pledge, “No matter how cynical you are, that’s serious money.” We couldn't agree more.
