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October 2023
Just the mention of environmental, social and governance practices — commonly referred to as ESG — can generate cheers and jeers. Some claim ESG applications are the responsible way to do business and contribute to socially valuable goals. Others dismiss them as woke capitalism that distracts businesses from creating shareholder value.
Even though opinions vary, there’s no doubt we are seeing increased focus on these responsible business practices in the railway industry. Many railroads and public transit agencies have ESG or sustainability plans. Some have dedicated personnel and departments. We are also seeing sustainability-related metrics and/or requirements referenced in bid proposals.
Sustainability issues run the gamut and are expanding to companies’ supply chains. New research recently cited in the Aug. 17 edition of The Wall Street Journal claims companies that pay attention to the ESG practices of their suppliers tend to generate better stock-market returns over time. “Companies using more responsible suppliers relative to peers — meaning the suppliers had fewer negative ESG incidents — generate higher stock return in the subsequent years than companies with more ESG risk in their supply chains,” noted Aaron Yoon, assistant professor of accounting and information management at the Kellogg School of Management at Northwestern University.
What does all this mean for railway suppliers and contractors? How do we navigate this evolving landscape, especially when plans are wildly divergent and there are no uniform best practices or methodologies for measuring and disclosing sustainability credentials?
Those are valid questions and concerns the NRC is addressing through the formation of a sustainability committee chaired by Martinus North America’s President Brett Urquhart. The NRC Sustainability Committee will focus on providing our member companies with resources to understand and respond to trends and global requirements.
Brett is leading a team of smart, action-oriented committee members dedicated to educating and supporting our members, who admittedly have a wide range of sophistication and resources. The process will begin with dialogue about supply-chain sustainability — with railroads, public agencies and with contractors and suppliers — to encourage collaboration and reach consensus on attainable, common-sense approaches. The committee’s goal is to promote consistency that will lead to continuous improvement across the industry.
We invite you to join the discussion. Please contact me, Brett or the NRC with your comments and questions.
If you want to learn more about sustainability programs and implications for contractors and suppliers, attend the NRC’s Annual Conference, which will be held Jan. 3-6, 2024, in Scottsdale, Arizona. We’ll feature a panel discussion of industry leaders discussing trends and how we can collaborate on best practices and standards. You’ll also hear from leaders representing Class Is, short lines and transit authorities about their engineering outlook and sustainability targets for 2024. We look forward to hearing how we can work together as their procurement partners.
Registration for the NRC Annual Conference and NRC-REMSA Exhibition is now open. Scan the QR code to register and to find out all the details. I’m confident you will come away with a clearer vision of how your company can join and influence the industry’s discussion about supply-chain sustainability.
I look forward to connecting with you and more than 1,000 industry leaders at the most valuable railway networking event of the year.
“Building a Safer and Stronger Railway Construction Industry Together!”
Steve Bolte, NRC chairman The National Railroad Construction & Maintenance Association Inc.80 M Street, S.E. Washington, D.C. 20003202-715-2920nrcma.org • info@nrcma.org
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