Norfolk Southern Corporation’s eighth annual sustainability report details the railroad’s corporate responsibility efforts during 2014 and the first half of 2015. To help stakeholders assess our commitment to corporate sustainability, the report discloses the environmental, economic, and social impacts of the corporation and our Norfolk Southern Railway Company subsidiary.
The report provides insight into how Norfolk Southern is addressing our core sustainability challenge: to achieve a healthy balance between our business commitments as a publicly traded enterprise and our social and environmental commitments as a responsible corporate citizen. Norfolk Southern strives to reward shareholders with solid returns and to offer customers the most competitive freight transportation services while respecting the interests of employees, communities, and the environment.
The information presented in this report is in accordance with the Global Reporting Initiative’s G4 Core Level reporting standards. GRI is a nonprofit organization that promotes corporate sustainability reporting as a way for companies to become more sustainable and contribute to sustainable development.
As Norfolk Southern’s sustainability journey continues to evolve, we are committed to responsible environmental, economic, and social stewardship.
We want to hear from you.
Norfolk Southern welcomes feedback – negative or positive – on our report. You are invited to send comments and suggestions to firstname.lastname@example.org.
For the fourth consecutive year, Norfolk Southern engaged auditing firm KPMG LLP to conduct an independent review of the railroad’s greenhouse gas emissions data. KPMG’s review, conducted in accordance with accounting industry attestation standards, resulted in the issuance of a limited assurance report for the railroad’s 2014 GHG data.
KPMG’s assurance letter and the data reviewed by the auditor can be found in the Conservation section of this sustainability report.
Norfolk Southern has implemented controls and processes that we believe have resulted in credible data regarding the company’s GHG emissions. The railroad’s aim is to provide transparency in the disclosure of carbon emissions data for customers, investors, employees, and other interested stakeholders.
Since Norfolk Southern launched a corporate sustainability program in 2007, the key focus has been on reducing and mitigating the environmental impacts of railroad operations. The aim is to identify ways to be greener and more cost-efficient, illustrated by efforts to improve locomotive fuel efficiency: Consuming less fuel reduces costs and greenhouse gas emissions.
The company’s investments in technologies, track, and rail facilities contribute to safer, more efficient rail operations, enabling us to reduce costs and environmental impacts, better serve customers, and create long-term shareholder value – all central to sustainability at Norfolk Southern.
For this report, Norfolk Southern identified core sustainability issues – described by the Global Reporting Initiative’s G4 reporting guidelines as “material” issues – through interviews with senior management, including the president and CEO and the board executive chairman. Members of an interdepartmental Corporate Sustainability Advisory Council, chaired by the company’s corporate sustainability officer, also provided input. Council members reviewed media reports about Norfolk Southern and the rail industry, examined materiality assessments undertaken by peer companies in the transportation industry, and engaged employees who interact with customers, investors, and other external stakeholders.
Following is a list of environmental, economic, and social sustainability issues highlighted in this year’s report.
Norfolk Southern’s efforts to engage stakeholders foster open dialogue and understanding of mutual interests and goals. This helps the railroad improve performance and achieve industry leadership across the spectrum of corporate responsibility.
Key stakeholders identified in this report can influence the railroad’s business outcomes. Following is a listing of major stakeholders, ways that Norfolk Southern engages them, and topics of interest.
Norfolk Southern’s employees are the company’s most valued asset, and keeping them engaged in the business is essential to corporate success. Through a daily email digest of news, a printed and online employee magazine, and internal video programming, Norfolk Southern informs employees about industry developments, company initiatives, and business opportunities and challenges.
The company’s online Employee Resource Center offers training, career development, health and wellness, ethics and compliance, employee resource groups, and other work-related topics. Operations employees access information about safety rules, training opportunities, and other work-related resources on an internal web portal. The Connections Challenge website, launched in 2014, promotes sustainability in the workplace and at home and includes contests that support corporate green goals.
The railroad’s management team is hands-on with employee engagement. Senior executives hold regular on-site visits to discuss safety and service performance. At the field level, operations supervisors discuss work topics with employees during daily shift briefings. Local safety and service committees promote safe and efficient operations.
Norfolk Southern’s business success depends on meeting the needs of customers. The company offers 24/7 service and engages customers at every step of a shipping move. Electronic commerce tools enable customers to track shipments and conduct other business using a laptop or mobile device. Employees in Operations Service & Support and Customer Service Operations provide assistance by region and commodity. Field managers and train crews that pick up and deliver freight work directly with customers. Senior executives meet face-to-face with many of our largest customers.
To make sure we’re meeting customer expectations, the Marketing Department annually surveys customers and makes improvements where needed. In 2014, Norfolk Southern worked closely with customers to address service concerns arising from traffic congestion and delays caused by severe winter weather and an unexpected surge in business volume.
Norfolk Southern aims to create long-term value and fair returns for investors. Detailed information about financial performance and market outlook is provided on the Investor’s section of the company’s website, during quarterly earnings calls with analysts, and during an annual shareholder meeting. During the year, senior executives speak at various industry conferences, and investors are encouraged to contact our investor relations office with questions or comments.
Norfolk Southern regularly engages with stockholders on governance, executive compensation, and other issues of interest. During 2014, the company held stockholder outreach meetings with many of our largest investors, providing opportunity for input on the company’s policies, procedures, and disclosures. As a result, Norfolk Southern made a change to our executive compensation program, amended a governance guideline, and enhanced a number of disclosures in our 2015 proxy statement. Our board of directors’ governance and nominating committee discussed the process for conducting this outreach program and the meeting results.
In September 2014, the company hosted a two-day conference for investors and financial analysts in Cleveland, Ohio. The conference included a train ride and a tour of the Bellevue, Ohio, rail yard, then in the final stages of a $160 million expansion to support business growth and operational efficiencies.
Norfolk Southern strives to be a good corporate neighbor. Community engagement ranges from charitable giving and employee volunteer activities to public safety initiatives focused on highway-rail grade crossing safety and prevention of trespassing on railroad property. The company maintains an open dialogue on social media, including Facebook, Twitter, and Tumblr.
In 2014, Norfolk Southern addressed community concerns, primarily in the northern region, about rail traffic congestion that blocked highway-rail grade crossings and the growth of crude oil transport by rail. Over the past two years, train transport of crude oil has generated public safety concerns after several highly publicized derailments that caused fiery tanker car explosions. None of those derailments involved a Norfolk Southern train. Demonstrating commitment to public safety, Norfolk Southern and other railroads have implemented a range of voluntary measures to reduce the likelihood of crude oil incidents and to maintain public confidence in the industry’s well-documented record of safely transporting products that are essential to the nation’s economy.
In another community issue, concerns about coal dust at the company’s export coal facility at Norfolk, Va., prompted a meeting with residents of neighborhoods near the facility and local members of the Sierra Club. The meeting, held at the railroad’s corporate headquarters with off-site telephone access, was attended by the railroad’s CEO and other senior executives to hear and address the concerns. To minimize coal dust, Norfolk Southern recycles stormwater collected at the facility and sprays it on coal cars as the coal is dumped into bins and moved by conveyor to colliers. In 2015, the company, in consultation with the state Department of Environmental Quality, plans to install additional air monitoring stations at the facility to monitor coal dust levels.
With a commitment to good governance, Norfolk Southern regularly engages with local, state, and federal elected officials and regulators. Employees in our government relations offices in Washington and state capitals across the network help explain the benefits of freight rail to legislators and regulators who make decisions that affect the industry, railroad employees, customers, suppliers, and communities. The company is a member of various organizations that speak with a unified voice on issues important to the industry, including the Association of American Railroads. The company works closely with state and federal agencies to ensure compliance with applicable rules and laws.
In 2014, Norfolk Southern and the industry worked closely with elected officials and regulators to address safety concerns about crude-by-rail transport.
Norfolk Southern looks for opportunities to partner with nonprofits on projects that mitigate the environmental impacts of business operations and preserve natural resources. These partnerships include the company’s “Trees and Trains” reforestation initiatives to mitigate carbon emissions.
At Norfolk, the company has joined other businesses in supporting the Elizabeth River Project, a nonprofit dedicated to cleaning up decades of industrial pollution to reopen the river for swimming and fishing. In 2015, the company expects to begin work on a multimillion-dollar living shoreline project on the river near the railroad’s export coal pier that will restore wetlands, create wildlife habitat, and buffer storm flooding.
Norfolk Southern engages industry partners and suppliers to develop innovative equipment and technologies that improve operating efficiencies and reduce environmental impacts. Examples include development of fuel-saving train-handling technology with New York Air Brake; pioneering efforts with GE Transportation to develop dispatch software to move trains more efficiently and cost-effectively; and work with Axion Power International to incorporate lead-carbon battery technology into a prototype battery-powered locomotive.
In 2014, Norfolk Southern introduced a new initiative to assess the sustainability practices of the railroad’s suppliers. The company also looks for opportunities to increase business with minority- and women-owned suppliers.
In 2014, the Campbell Institute at the National Safety Council accepted Norfolk Southern as a member in recognition of our commitment to corporate leadership in environmental, health, and safety, or EHS, practices.
Norfolk Southern earned recognition as a marketplace leader in carbon disclosure, securing a place on the CDP Climate Disclosure Leadership Index 2014.
For the 15th time in 2014, Norfolk Southern earned a National TRANSCAER® Achievement Award for exceptional achievement in support of voluntary efforts by companies and others to help communities prepare for and safely respond to potential incidents involving transport of hazardous materials.
Inbound Logistics magazine, a leading publication for the transportation industry, named Norfolk Southern to its “75 Green Supply Chain Partners for 2014.”
Among industry peers, Norfolk Southern ranked No. 4 among the 10 largest U.S. companies in the trucking, transportation, and logistics sector on Fortune magazine’s Most Admired 2015 list.
Agricultural shippers ranked Norfolk Southern second among the seven largest railroads for customer satisfaction on the Soy Transportation Coalition’s 2014 Railroad Report Card.
The American Heart Association recognized Norfolk Southern as a Platinum Fit-Friendly Worksite for encouraging physical activity and health in the workplace.
Norfolk Southern ranked No. 3 among large Atlanta companies in the Atlanta Business Chronicle’s 2014 Healthiest Employers awards.
In 2014, for the eighth year, G.I. Jobs magazine listed Norfolk Southern among the nation’s Top 100 Military Friendly Employers.
In August 2014, Beacon Wealth, a faith-based investment advisory firm that focuses on “morally responsible investing,” recognized Norfolk Southern as a “Shining Light Company.”
In 2014, the Center for Political Accountability scored Norfolk Southern among the top 20 of 300 of the largest publicly traded U.S. companies for voluntary political disclosure.