Mr Branson said the Virgin Group will invest all future profits from its airline and train businesses into a number of environmental projects.
They include renewable energy initiatives within the company and new research to develop biofuels.
The billionaire businessman unveiled the initiative in New York at the Clinton Global Initiative headed by former US president Bill Clinton.
"We have to limit our dependence on fossil fuels," said Mr Branson.
"We hope that this contribution will help in some small way to enable our children to enjoy this beautiful world."
Shared responsibility
Virgin Group issued a statement, saying it believes all businesses must help develop renewable energy sources.
To demonstrate the commitment, the company said that all "dividends, realisations and share sales" from Virgin's transportation interests "will be invested into renewable energy initiatives.
Virgin said the initiative would take the form of investment in new fuel technologies through an investment unit called Virgin Fuels.
Four million dollars (A$5.31m) have been pledged over the next three years.
Virgin Fuels will first invest in a company based in California called Cilion which is doing research to produce new kinds of ethanol.
Further investments over the next three years will be made in Europe and other parts of the world, the company said.
"Virgin has always worked hard to minimize our environmental impact at every level of our businesses,” the statement said.
The company cited the use the latest fuel-efficient Airbus 340 and Boeing 737 aircraft, printing double-sided on recycled paper and using fair-trade coffee in its offices as other ways it showed commitment to the environment.
Branson's businesses
Mr Branson was recently ranked by Forbes magazine as the 245th richest person in the world, with a net worth of US$2.8 billion (A$3.71bn).
He made his initial fortune in the record industry and heads the Virgin Atlantic airline.
But he has also launched a string of other companies in sectors such as railways, mobile phones, Internet access and soft drinks.
The Clinton Global Initiative is focused on climate change, global health, easing religious and ethnic conflict and reducing poverty.
So far this year, it has managed to raise US$5.7 billion (A$7.57bn), including the contribution by Richard Branson.
"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," Clinton said in a statement.