Green Leaf Report

Richard Branson has put his money where his mouth is and pledged $3B over the next 10 years to fight global warming.  While I think it’s necessary for the government to snap its fingers in front of most businesses to wake them up, Branson is setting the path for others to follow.  This large contribution is somewhat of a luxury only available to the privately owned companies, though. That’s one primary restriction for public corporations - it’s hard to pledge what shareholders own and not get hit with a class-action lawsuit.  I’d like to see where this money goes when the pledge is put into practice; will it only support research for alternative fuels?  That would fit into Branson’s strategy of Virgin clean fuels, and perhaps help position him as the supplier of a primary expense item for his train and plane businesses.  All things considered, this media release was very savvy: he’s receiving a large amount of positive press, is taking a huge risk to change the supplier structure of at least two of his businesses, and, whether he is successful or not, he will be praised by the press because the cause is so noble. 

A girl I know who worked in airlines finance in the 90s once made a casual comment over drinks that every penny change in the price of oil hit the airline’s bottom line by a million dollars.  Maybe this rule of thumb isn’t the most scientific or verifiable data point, but running with the idea, that means the average 2006 gas price could easily drive a couple hundred million dollars per year in additional expenses over the mid-90s airline cost structure.  Suddenly a $3 billion dollar investment over 10 years could actually stand up to shareholder scrutiny.  OK, public companies, let’s start chewing on this one!

tags: global+warming, tycoons, green+companies, green+pr, green+philanthropy, green+ceos