Trees and trains add up to sustainable business

In 2015, Norfolk Southern completed a five-year community partnership to reforest 10,000 acres in the Mississippi Delta, the flagship project of the company’s Trees and Trains initiative to mitigate carbon emissions the natural way. NS partnered with GreenTrees, the nation’s leading reforestation program, committing $5.6 million to plant more than 6 million trees.

Income for landowners: The Trees and Trains project is generating income for about 50 landowners who agreed to plant cottonwoods and native hardwoods on former woodlands that were converted years ago to farm fields but became marginally productive and prone to flooding. Over 15 years, the trees planted through Trees and Trains will generate more than 1.1 million metric tons of carbon credits that NS agreed to purchase through the partnership. NS can hold the credits to offset its business-related carbon emissions or sell them to recoup its investment. Participating landowners receive payments through NS’ initial investment in the project.

Corporate opportunity: The project, which supports a region long served by NS, is an innovative way to invest in conservation, resulting in positive environmental, economic, and social impacts for the railroad and its stakeholders.

“The fact that Norfolk Southern said, ‘We’re in,’ created a floor of certainty for landowners to make that land conversion,” said Chandler Van Voorhis, GreenTrees co-founder and managing partner. “It told them, ‘This is a big corporation saying, ‘You grow it, I’ll buy it.’ Having NS as a buyer and an investor brought a comfort level that has enabled us to scale up and bring in other landowners outside of NS’ particular territory. That’s a part of the story that Norfolk Southern owns.

“More corporations are following Norfolk Southern’s lead and investing in forestry initiatives as part of their sustainability efforts to offset carbon emissions and other environmental impacts,” Van Voorhis said.

“It’s not just carbon,” he said. “It’s biodiversity, it’s water, it’s impact in a community where the investment has been made.”

NS turns land stewardship into profitable opportunity

Norfolk Southern’s commitment to sustainable business practices extends to operations that are not directly tied to moving freight. As a large landowner in coastal South Carolina, NS has adopted an approach that generates environmental and economic benefits.

NS in 2015 launched a project to restore 290 acres of historic wetlands at its Brosnan Forest conference facility. The project, to be completed in 2016, will create valuable wildlife habitat and restore natural water hydrology while supporting economic development in the region. NS donated a conservation easement that will permanently protect the restored wetlands acreage.

This “wetlands mitigation bank” will generate 790 wetlands credits that NS, through a broker, can sell to offset wetlands impacted by development elsewhere in the region. The credits could be used, for example, to support development of rail-served industrial projects that would create new business for NS. With wetlands credits in coastal South Carolina currently priced from $6,000 to $8,000 each, NS potentially could earn more than $6 million selling them.

Forest has railroad roots

Located about 35 miles northwest of Charleston, S.C., Brosnan Forest has been in railroad ownership since the 1830s, once serving as a source for track crossties and fuel for steam locomotives. In the 1920s, Southern Railway, an NS predecessor railroad, used the property as a laboratory for university forestry students and to demonstrate the economic advantages of planting property in woodland. These days, NS operates a small conference center at the Forest as a place to build business relationships with customers and to offer management employees an off-site location for strategic planning and brainstorming sessions.

EMPLOYEE SPOTLIGHT
Protect the planet, earn a profit

Josh Raglin, general manager facilities, has helped make Norfolk Southern a U.S. corporate leader in conservation capitalism, a business approach that turns conservation into opportunities for profit.

A biologist by training, Raglin manages NS’ Brosnan Forest business center and 14,405-acre woodlands preserve. In 2008, Raglin helped NS pioneer a conservation easement that permanently protects 12,488 acres of the property from development, including more than 6,000 acres of rare longleaf pine forest. Since then, Raglin has spearheaded several initiatives showcasing conservation capitalism, including creation of a wetlands mitigation bank, his latest project. Through Raglin’s efforts, NS has:

• Qualified the Forest for enrollment in both the Sustainable Forestry Initiative® and the Forest Stewardship Council by adopting best management forestry practices. While preserving plant and wildlife habitat, these certified practices increase the value of timber that NS allows to be periodically harvested as part of the property’s management.
• Earned around 300,000 carbon offset credits for the Forest, working with Finite Carbon to verify and register the credits with the Air Resources Board in California. Through the ARB, NS sells the credits to companies desiring to offset their emissions. Over the past year, a carbon credit in the California market has traded in the $9 to $10 range.
• Expanded the number of endangered red-cockaded woodpeckers nesting at the Forest, creating the world’s largest known colony on privately owned land under single ownership. Through a “safe harbor” agreement with wildlife and natural resource agencies, NS’ efforts to expand the birds’ population has earned 21 mitigation credits that NS can sell to developers wishing to build on property housing isolated pairs of the woodpeckers.

“Brosnan Forest is such a unique property,” Raglin said. “What we’re doing here is part of our long-term vision to find a balance between conservation and sustainable business and show how they can work together.”