Richard Branson has deep-sea ambitions, launches Virgin Oceanic by Paul Smalera @FortuneMagazine April 5, 2011, 6:44 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Richard Branson at Brainstorm GREEN FORTUNE — Yesterday at the Brainstorm GREEN conference in Laguna Niguel, Calif., Richard Branson sat down with Fortune Managing Editor Andy Serwer for a conversation where he unveiled his latest venture, Virgin Oceanic, through which he will explore the deepest underwater areas of the world. “Virgin Oceanic will expand the reach of human exploration on our planet. By promoting and utilising new technology Virgin Oceanic will aid human kind’s ability to explore our Oceans, assist science in understanding our eco system and raise awareness of the challenges facing our Oceans,” Branson said in a statement about the project. Branson told Serwer, “the exploration at the bottom of the oceans — it’s really not been explored at all. The furthest that any Japanese submarine or American submarine or Chinese submarine goes down is 18,000 feet, and yet there are trenches in the ocean that are like 36,000 feet … and there’s something like [unintelligible number] species in the oceans we don’t know about. And it’s quite important…that we know what’s going on down there. So that’s the hitch.” The Virgin Sub. Courtesy Virgin Oceanic In a statment, Virgin Oceanic explained how Branson and his co-commander will explore the ocean’s trenches: “Each dive will be piloted by different commanders with Chris Welsh diving to the Mariana Trench (36,201 ft.) with Sir Richard as back up pilot, and Sir Richard piloting to the Puerto Rico Trench (28,232ft) — the deepest trench in the Atlantic, which has never been explored before — with Chris Welsh acting as back up. The Virgin Oceanic sub has the ability to ‘fly’ underwater for 10km at depth on each of the five dives and to fully explore this unknown environment.” Branson will visit the deepest points of the world’s oceans over the course of two years: The Mariana Trench in the Pacific, the Puerto Rico Trench in the Atlantic, the Diamantina Trench in the Indian, the South Sandwich Trench in the Southern Atlantic Ocean and the Molloy Deep in the Arctic Ocean. A video of the conversation and a transcript follow: THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. FORTUNE MANAGING EDITOR ANDY SERWER: You all know what Richard does. The Virgin brand is all over the place– airlines, media, telecom hospitality and of course sustainability and climate change are a focus of what you do. First, as may of you probably know, the national collegiate basket ball game … is being played right now. Richard and I have a keen interest in this and Richard, I thought I’d ask you if you have any insight into who you think would win this game tonight …. RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: Let’s see, if Cameron hits the 3, I think UConn will win [Laughter] SERWER: And you thought he just knew cricket BRANSON: … SERWER: I want to talk — You have various endeavors underneath this topic of climate change, sustainability, green if you will…. But first, how you got involved and how you first got interested in green from just being an entrepreneur and starting all matter of businesses to branching out into that area BRANSON: Um, well I was in my dressing gown at home in England in London one day. There was a loud bang on the front door one day. And I opened the front door and Al Gore was standing on my doormat. This was before he put out inconvenient truth … and asked if he could come in and he sat down and gave me a long lecture, which was basically a condensed version of inconvenient truth. And basically At the end of it, he said, look you’ve got a lot of dirty business, you should use yourself as an entrepreneur to try to go and do something about it. So um, a couple week’s later, after he left, I read one of two books on the subject talked to one of two scientist friends that I knew and began to be worried about it. I mean, obviously already it had come on the radar but obviously he ran home the point. And then I was in the bath about two or three weeks later and I thought maybe the best way to do something about it would be to pledge all of the profits we make from our dirty businesses and invest those in clean energy [unintelligible]…to do something about it …so that’s what we did at Clinton Global Initiative – we pledged all those profits we made to invest in clean energy. SERWER: What year was that when Al Gore came when you were in your bathrobe…? BRANSON: I can’t remember- An Inconvenient Truth came out about four or five years ago so it must have been six or seven years ago. SERWER: What percentage of your time do you spend working on these various endeavors- we’ll get into each and every one of them but you have such a myriad, number of businesses … BRANSON: I think now, because I suppose I can afford it, about 75% of my time is spent on setting up not for profit ventures and organizations like The Elders or [unintelligible] deal with conflict resolution issues or the Center for Disease Control in Frice to try to … attack the diseases or the Carbon War Room which is specifically set up to help tackle [unintelligible] SERWER: You’ve got three endeavors at least that speak to green sustainability and I want to talk about each one. Let’s start with the Virgin Green Fund. Can you talk about that a little bit to start? BRANSON: Yeah, that’s a for business venture where we invest in companies that we think and hopefully will make profits and that also will will compete with oil and cola and some of the dirtier industries and hopefully our reliance on the dirtier fuels will be less as a result. But I think the only way that we’re going to get on top of this problem of global warming is to….. Replace those businesses with the Green Fund….and invest in a lot of different businesses in that area. SERWER: Is it a venture fund? Is it in the UK, is it in North America? Who runs it, did you seed it? How does it all work? BRANSON: It’s run just like any venture that Virgin sets up, it’s run by Jigar who runs it. We bring in other partners, we put in a chunk of money ourselves and then we go and invest in businesses we believe in. When I had a hunch about isobutonol through engineers that were dealing with our spaceship company- they thought isobutonol could be the fuel of the future. Unlike ethanol, it does not freeze at 15,000 feet which is not ideal for an airline… or a spaceship…..and that it could have every possibility of powering airplanes in a clean way in the future. So one of the first things that the green team did was go out and see how people would [unintelligible] isobutonol did in the first place and in fact a company that I invested in floated I think two weeks ago it was….worth half a billion dollars. …. so it was a dent hunch which seems to be going in the right direction… SERWER: And so that gentleman is … BRANSON: Shai Weiss… SERWER: Where is he based ? New York or London or? BRANSON: I think he’s like a lot of us, on a plane… SERWER: On a Virgin plane. BRANSON: Hopefully on a Virgin plane. I think London…[unintelligible]. He has SF as well. SERWER: I know all about your plane business…. but what is your rail business? Is that just in the UK or where else is there? BRANSON: At the moment it’s just in the UK; the British government decided to privatize the very antiquated rail network in Britain…and Virgin took all the principal lines out of London and west coast… we’ve managed to double the number of passengers from 20 million to 40 million since we took it over by putting on much quicker trains, high speed sort-of trains… Because this is a green conference, they are also trains that every time they put the foot on the brake it puts at lot of energy back on the grid…… SERWER: I want to ask about another endeavor that you have that’s pretty compelling that’s the Virgin Earth Challenger. I guess it’s a competition of sorts – a prize for people who have great ideas in this area. How does that work, where does that stand? BRANSON: Well, um, you know having met Al Gore and having met and talked to a number of scientists and having looked at that the vast majority of scientists think that we’re potentially heading towards a potential catastrophe…and also then looking at what the world is doing to avert it….and realizing that the amount of carbon that is going up into the earth’s atmosphere every year was growing rather than decreasing. We just thought that maybe we should set up a prize to see if there was any genius out there who could come up with a way of extracting carbon out of the earth’s atmosphere….And obviously if we can extract a certain quantity of carbon per year out of the earth’s atmosphere we could then effectively keep the temperature at whatever level we want in the world…. And so we put up a 25 million dollar prize, it got people thinking….we had a lot of submissions from a lot of people and we whittled it down to about 20 serious submissions. We’re going through at the moment. Not sure there has been a slam dunk winner yet…. There have been some great ideas that have come out of it …. Bio-[unintelligible] is an excellent way in getting a lot of carbon out of the out of the world’s atmosphere. Setting up bio-char(sp?) machines at every farm where they can turn waste product into charcoal and then they can plow it back into the fields. It becomes good compost, it becomes good for water retention….um, and the farmer can also heat his farm etc. If every farm can do it, you’d be putting all of the emissions from liquid fuel worldwide back into the ground for centuries to come so we’re collecting ideas like that…. SERWER: So are you still accepting submissions? BRANSON: Yes. SERWER: Is that something you see yourself doing again? You try al these new things… sometimes they work and sometimes they don’t. BRANSON: You look at the history of prizes, it’s actually had a very good track record…the first crossing of the Atlantic came out by …. SERWER: That was a prize oriented….that makes sense; why would you do that? BRANSON: You should put up more prizes….. SERWER: I’ll put up more prizes, I gotta get some more money… BRANSON: What were we talking about? Prizes..yes, longitude and latitude was a phenomenal prize that saved thousand so ships from going on the reefs. ..George the Third…and more the x prize for space, which Spaceship One won, and for any commercial spaceship that can go into space three times got ten million dollars, and that spurred [unintelligible] to come up with the genius idea to create a spaceship that can come safely back into the earth’s atmosphere….. SERWER: That’s impressive. I think Netflix had a prize recently …. [Laughter] BRANSON: I think I need a drink. Andy’s been drinking. Give me a white wine or something. SERWER: Now, talk about the airline business- as you suggested it’s one of the dirtiest businesses; what specifically have you done with your airlines to make them greener? BRANSON: Is no one really going to get me a glass of wine?? [Applause as he gets a glass of wine] BRANSON: Well, I think we’ve mentioned some of the things, we’re using our profits to invest in clean energy…hopefully four or five years from now we’ll be flying our planes on fuel we can produce or companies that we invest in produce that that only will emit maybe 5 or 10 percent carbon instead of 100 percent carbon…what else are we doing…we’re trying to make sure that….virgin …winglets on all of our planes that reduce fuel by another 18% percent. Keeping questioning … you know work with air traffic control to make sure that airplanes come straight in….getting air traffic control people to be better organized…There is only so much you can do; the key thing is to try to come up with a fuel that is ..that works the planes..I think it’s also key…you know we’re talking here about global warming… But we did a lot of research on when the demand for fuel will exceed supply and we put out a report every year. And it’s frighteningly soon. And when that happens, we can easily see fuel going to $200 a barrel…a couple of years ago we had the idea of fuel going to $20 a barrel a day …people wouldn’t believe that…so I think that everybody in this room has got to work extremely hard- not just with global warming but with ways of saving energy as fast as possible…otherwise we’re going to have the mother of all recessions…. SERWER: I’m going to open it up to questions in a minute of two, but just a couple more question and that is the – the third piece of what you do in this arena. The Carbon war room, which you mentioned. How many people here have heard of the carbon war room. [most all hands go up]. Ok good good awareness in this room and many people know what this is about…and of course we have the ceo of this endeavor of yours Jigar Shah, who is talking about this on Wednesday…why don’t you talk about it a little more about the inception of your mission and where it’s going. BRANSON: Thank you this wine is delicious by the way… SERWER: You want the Pinot? BRANSON: [unintelligible] No, again, again, if if the how many people in this room actually believe that global warming is a serious problem- a very serious problem? [NEARLY ALL HANDS GO UP] By a serious problem, we’re saying that it could be worse than a couple of world wars. Or it could be very serious for the world. Two and a half years ago we were sitting down thinking, where is the sense of urgency?…. If you’ve got something as bad as two world wars put together, where is the war room? If Churchill was there, he would set up a war room to combat Hitler, we felt there needed to be a war room to combat the problem of global warming ….And we set up a carbon war room like you would a business. Found excellent people to run it . We got a great team. The remit of that team was to work the 25 industries that are the biggest emitters of carbon- the airline industry, the shipping industry, the IT industry, the building industry etc … to see if we could get a gigaton of carbon out of each of those those industries. Not to attack those industries, but to work with those industries to ….as possible. So they, so as much as their budget would allow, I think they’ve done some fantastic things in the last 18 months. ….they’ve been working with 25 of the biggest cities in the world…obviously buildings is one of the biggest places you can … you can get an easy win. The shipping industry was untouched, had gone completely below the radar….no one knowing…most of those ship owners not realizing how much money they were wasting in energy…. Most of the ships on the seas, you know they ranked them ABCDEFGHI based on efficiency…so now ports can give priority to ships that are more efficient than others…efficient ships or so on…and that’s the way it’s going through each individual industry…trying to see if they can make a difference in the world. SERWER: Is the war room funded by Virgin or have you partnered with NGOs, or government funding? BRANSON: Virgin helps fund it. And we’ve got some other entrepreneurs who would help fund it, and would love a few more….sure that Jigar will talk to anyone who is interested. SERWER: Phone lines are open! BRANSON: In this case he will come and shake some hands. SERWER: Questions? AUDIENCE QUESTION: So much of the Virgin message- you’re the best ambassador for all the Virgin platforms- how do you make sure that all the efforts that you’re so deeply passionate about are not just tied up in a cult of personality around you but in a deeply systemic inside Virgin. Another way of looking at the question- if you weren’t in the picture how do all these move forward? BRANSON: It’s a good question. In the early days of Virgin, that would have been more relevant, using myself to get Virgin on the map. I think now it’s an established brand….I had to learn the art of delegation early on …we have something like 350 different ventures and each of those are run by extremely good people. They run them like they are their own companies so they have the freedom to make mistakes and do good things…. The press don’t talk about Virgin rather than Richard Branson. Whether my balloon goes first or my spaceship goes down. We’ve got an announcement tomorrow morning, whether the sub marine pops or whatever…I think Virgin will live on. I was just reading about the record business and you know an artist has the best sales just after he dies, so…. SERWER: Is there anything you can tell us about what you’re announcing tomorrow…? BRANSON: Well, if people wouldn’t mind not twittering. Well. ..space., a lot of people have been into space and hopefully a lot more people will be going into space once Latitude gets going in the next 12 months or so. The exploration at the bottom of the oceans – it’s really not been explored at all. The furthest that any Japanese submarine or American submarine or Chinese submarine goes down is 18,000 feet, and yet there are trenches in the ocean that are like 36K feet … and there’s something like [unintelligible] species in the oceans we don’t know about. And it’s quite important, that people believe …that we know what’s going on down there. So that’s the hitch. SERWER: So it’s kind of like a Jules Verne kind of thing … BRANSON: That’s a fair comment …. by the way as a matter of interest …what’s the pressure if you …what’s the pressure if you had a sub that’s at 36,00 feet underwater, what’s the pressure compared to an airplane at 36,000 above. ….[audiencde guesses ]. 1500 times the pressure. Which is why it hasn’t been done today. AUDIENCE QUESTION: Barclay from Sustainability a Think Tank…If I have the gigaton (sp?) awards right then I think the six or seven companies awarded in Cancun were singled out for their progress against intensity targets. If that’s true how long can we keep going rewarding people on the basis on intensity reductions on carbon instead of absolute and how do you manage that in the Virgin Group now? BRANSON: I think it’s a question that I don’t mind delegating to Jigar when he does his talk on Wednesday. JIGAR: The reason why there was a carbon war room is that there was a big challenge that really wasn’t about relevance …. So the awards were about talking to companies that are doing something relevant. BRANSON: I think we’re going to offer this same awards in South Africa for the worst countries and the best countries…and hopefully I will have pinpointed the worst countries and maybe a county not far off from here. You’ve finally got a chance of winning an award. [laughter] SERWER: Do you just sit around and think this stuff up? BRANSON: Well, something …well, some of them just come…I was in Mexico, no Brazil, at a conference tk weeks ago, and l….[unintelligible]anyway, we got an award SERWER: One more question over here. AUDIENCE QUESTION: South Africa was actually the first to actually implement reporting aligned with sustainability reporting. What are your thoughts about that happening globally? BRANSON: Well, good old South Africa…and I think it’s up to us to push other countries to do the same and fantastic of South Africa to do …and should do the same. And I think it’s time for another drink.. SERWER: I’m interested, who do you read, who do you talk to in this arena? BRANSON: I’ve been lucky enough to become friends with a number of scientists. James Lovelock is a fascinating man…must be 92 years old…he has been at the forefront of this issue for many years. Tim Flannery. Australian of the year last year, written two very good books on the subject His first book was you know, very easy to read and opened the eyes of lot of people. I’ve been in the privileged position to get to know a lot of scientists….I also debate with the skeptics as well … [unintelligible] who designs our spaceships is a skeptic and keeps sending me emails and um, I obviously respect him and listen to his emails and send them to James Lovelock, who — to get him to help me draft the replies. [Laughter]. It’s important to keep an open mind, but I think there comes a time when you’ve got 95 percent of scientists saying the one thing, you’ve got to accept the 5 percent have very good reasons why they don’t. SERWER: Last question. AUDIENCE QUESTION: Just curious as it seems…when you take on a problem you don’t want to look around at what the problems are in terms of the boundaries that might prohibit you from solving it. When you look at what you’ve taken on, what do you think is the balance between the role of corporations which is kind of your role in solving problems versus the role of the government, NGOs, scientists … BRANSON: Well, I think the problem today is that I think you can’t rely on governments to sort out problems because they—look, Americans, you can see how difficult it is to govern America. Even for a president who has been overwhelmingly elected, to be able push through policies that he believes in. Therefore, I think it’s up to corporations to get on and do the job. We’ve just got to persuade about 1 percent of all the private equity that’s invested every year….and that will solve the problem. It will obviously help if governments will set the ground rules, and I think governments obviously should…. I think there should be a tax on dirty fuel and say that everyone….once they’re arguing this…we’ve just got to get out and persuade the institutions…just put a tiny percentage of that money into clean energy and …200 billion to 550 billion and we can get on top of the problem. Not just …in America the word “global warming” just doesn’t wash, but if you can talk in American on not being reliant on foreign countries, particularly Middle Eastern countries…those things seem to go down better in America than global warming. … Whichever way it is, we’ve got to get there…and we as entrepreneurs have got to lead the way.