NRC column: Sustainability has staying power

Most major railways have plans for sustainability.

If your company is on the fence about whether or not to take sustainability or ESG initiatives by Class 1s, short lines, and transit railways seriously, let me encourage you to get on board.

The NRC and REMSA boards—comprised of leaders from the contractor and supplier community—heard updates from key engineering and procurement representatives from the railway industry at our summer board meeting. Their message came through loud and clear. ESG standards are not a fad; they’re serious business and are headed your way. It’s time to collaborate on smart approaches.

Most major railways have plans for sustainability or, more recently, ESG, which stands for Environment, Social and Corporate Governance. You can generally find them on their websites. ESG covers a wide spectrum of issues that have traditionally not been part of a corporation’s financial analysis.

RT&S Managing Editor David Lester defined ESG this way in his March 2022 editorial: “The idea behind sustainability, and now ESG, is that investors have become increasingly focused on carbon footprints and green initiatives in the companies where they invest. They’re also interested in the social aspects of a corporate environment, including how a company treats its employees, as well as how a corporation is governed.”

Our railroad guests confirmed an increased focus on ESG that will soon extend to their procurement partners.

Wendy Whalen, Union Pacific Railroad’s Assistant Vice President of Supply Chain, emphasized that Union Pacific’s wide reach across the U.S. points to the importance of acting as “conscientious stewards to protect the communities and terrain we must use to operate as a railroad.”
Whalen noted Union Pacific is preparing to publish a Sustainable Procurement Policy. “We plan to introduce elements of that policy into our annual reviews with strategic suppliers and our site visits with selected suppliers.

“It is our responsibly to emphasize the importance of diversity and inclusivity within our work force, pursue innovative technology, protect clean air and water, and set and reach targets to reduce our carbon footprint so we can achieve net-zero emissions by 2050,” she added.

Laura McNichol, Watco’s Chief Sustainability Officer, confirmed this trend extends to short lines.
“Here at Watco, we are embarking on our first-ever Greenhouse Gas Inventory, which will help us identify risks and opportunities for reducing our carbon footprint. We are also in the process of conducting a materiality assessment that will help guide Watco’s focus on ESG. We intend to have both of these items completed before year’s end,” she said.

McNichol said Watco is encouraged by contractors and services who come to them seeking ESG information. “We are happy to share Watco’s approach of being good stewards of all that we are responsible for—our people and the environment.”

If you want to learn more about sustainability programs and implications for contractors and suppliers, attend the NRC’s Annual Conference on Jan. 4-7, 2023, in Boca Raton, Fla. You’ll hear from leaders representing Class 1s and short lines about how they hope to collaborate with their procurement partners on achieving practical, common-sense standards together.

I am certain this and other conference sessions will give you concrete ways to strengthen connections with your customers to achieve your mutual business objectives. Registration is now open. Learn more at www.nrcma.org.

Bolte is the chairman of the NRC.

Read more articles on freight railroad.