Drysdale: CN aims for the ‘winners circle’ with climate targets
9/3/2021
By Julie Sneider, Senior Associate Editor
To Janet Drysdale, CN’s actions toward meeting its environmental, social and governance (ESG) goals boil down to a simple objective: to meet the needs of the present without compromising the future.
“At CN, when we talk about sustainability, we really talk about delivering responsibly. That’s really at the heart of how we’re building for a sustainable future,” Drysdale, CN’s vice president of sustainability, said Aug. 26 in a presentation during Wolfe Research LLC’s ESG conference. She was a panelist for a discussion titled “Planes, Trains and Automobiles: ESG in the Driver’s Seat.”
That Wolfe hosted what it touted as its inaugural conference on ESG highlights a “tipping point” reached in the investment community: Mainstream investors now recognize the importance of ESG when evaluating corporate actions and practices that drive better outcomes, Drysdale noted.
With CN for 25 years and most recently served as the VP of financial planning, Drysdale also serves on the board of Rumo Logistica, which manages thousands of kilometers of rail network in Brazil.
CN has set a science-based target of reducing carbon emission intensity 43% by 2030, based on 2019 levels. cn.ca“I love this industry,” the essential role it plays in moving the economy and the one it plays as part of the solutions to climate change, she told attendees of the virtual conference. She provided an update of the Class I’s ESG targets, but focused most of her comments on its environmental sustainability initiatives, which she described as a “journey” that stretches back several years. For example, In 2010, CN became the first North American railroad to release a GRI (Global Reporting Initiative) sustainability report.
Since then, CN became the first North American railroad among the first 100 companies globally to set science-based emissions reduction targets. The Class I was the first North American railroad to secure a sustainability-linked loan (occurred in 2021) and is among the first companies globally to provide shareholders an advisory vote on its climate action plan, Drysdale said. The first vote was taken at CN’s annual shareholders meeting in April.
“We all know that what gets measured gets managed. And transparency and target setting, short-, medium- and longer term targets tracking performance and aligning accountability are fundamental to driving success,” she said.
It’s also critical for companies to embed environmental sustainability targets into their overall strategy and day-to-day operations — something CN has done. Its sustainability efforts aren’t just her team’s targets, they’re the company’s targets — “from the front line to the board room,” Drysdale said.
“My role as vice president of sustainability and the role of my team is to work with each of CN’s functions to make sure that we are mitigating risks; that we are seizing opportunities; and that we’re building not only resiliency, but also competitive advantage,” she told conference attendees.
CN’s focus on fuel efficiency has been embedded “in our DNA,” Drysdale said. The Class I has set a science-based target of reducing carbon emission intensity reduction 43% by 2030, based on 2019 levels. Moreover, the Canadian government has committed to moving the nation to net-zero emissions by 2050.
CN has five "levers," as VP of Sustainability Janet Drysdale puts it, to meets its carbon emission targets by 2030. cn.ca“Trains are about four times more fuel efficient than trucks,” she said, noting that moving long-haul freight by rail instead of trucks reduces GHG emissions by 75%. “And amongst the Class I rails, CN leads the industry, consuming about 15% less locomotive fuel per gross ton mile than the industry average.”
The railroad also seeks to use less electricity in rail yards and terminals. However, because 85% of CN’s GHG emissions come from locomotive operations, that’s where the company focuses its efforts. And “there’s no magic bullet,” she said. The company has what Drysdale described as five “levers” to meets its carbon emission targets by 2030: investing and upgrading the locomotive fleet; increasing the use of fuel efficient technologies; leveraging the use of big data; improving operating practices and engaging all employees to be involved in the process; and the use of cleaner fuels.
But, CN can’t achieve its carbon emissions goals in a vacuum. The pathway to reaching net-zero emissions by 2050 will require collaboration within the entire transportation industry, Drysdale said.
“We don’t manufacture the locomotives and we don’t produce the fuel. The whole transportation sector is going to be completely transformed and that’s going to require a lot of collaboration,” she said.
Climate change is the “defining issue of our time,” Drysdale said.
“I don't need to explain to our investors that this transition will create winners and losers,” she added. “I’m here to assure you that CN has every intention of being in the winners circle.”
