On The Fast Track To Sustainability With Norfolk Southern Corporation’s Josh Raglin

The supply chain issues brought about by COVID-19 really forced many manufacturers to take a closer look at where they buy raw materials from and how they are shipped. Not only are companies re-evaluating where their materials are originating and seeing if they can identify suppliers in closer proximity to their plants, but also considering the environmental impact shipments of both raw materials and finished products to retailers and consumers have on the environment.  

As part of an organization involved in trucking, it was fascinating to get perspective on how another transportation industry is approaching sustainability. Josh Raglin, Chief Sustainability Officer at Norfolk Southern Corporation — whose primary business function is the rail transportation of raw materials, intermediate products, and finished goods across the Southeast, East, and Midwest United States — gives us a deeper dive on their railroad sustainability agenda.

Josh talked about how Norfolk Southern engineered their sustainability efforts with projects to improve local communities as well as making big strides to reduce emissions.

• The Role Of The Chief Sustainability Officer At Norfolk Southern Corporation: It’s really about developing and executing our strategy around sustainability to drive value for all of our stakeholders. All of them have different interests in sustainability, and sustainability in its very essence is being good stewards of our assets (money, people, equipment, or time). It’s really about driving efficiency throughout the organization that creates value. (0:45)
• How Being A General Manager Influenced His Take On Sustainability: Norfolk Southern was one of the first US companies to create a sustainability program in 2007. At the time, leadership in our company realized the value of how just driving efficiency and lowering our environmental impact could have a positive impact on our company long term. Our company has been in business for almost 109 years. If we weren’t sustainable, we wouldn’t be in business now. And so, as we look toward the future, we challenge ourselves in a number of areas. Sustainability is a journey, and we’re continuing to refine our program and look for ways to get better. My role as the general manager allowed me to lead a lot of our environmental projects around forest restoration projects. For example, we’ve done two different forest carbon projects. We currently have a wetland project that was completed a few years ago and another one under construction that is going to restore 500 acres of wetlands and 600 miles of stream which have positive environmental impacts. They’re good economically, and they’re great for the surrounding communities. Those are the kind of projects we go out to lead so my background has been in wildlife and environmental. (1:43) 
• How The Sustainability Agenda Has Evolved Over The Past 25 Years: When we first thought about sustainability, it was more about environmental compliance. It was a little bit about fuel efficiency, and it was more about economic returns. Now it’s more about engagement with communities. It’s about using a different set of lenses when you look at projects, instead of just pure financial return. It’s really how you can create multiple values and create things in a different way. One example I’ll point to is our living shoreline project which was completed last year. We lost around three acres of land at our Lambert’s Point Terminal in Norfolk Virginia on the Chesapeake Bay at the Elizabeth River. We could have come in and developed this fully armored shoreline of rock, but what did we really accomplish from an environmental perspective? Instead, we partnered with a local conservation group to come up with a better plan to create a living shoreline with native vegetation. We restored the shoreline and it saved 75% of costs and we have this great habitat there and it’s much more aesthetically appealing because it’s along the main stretch of the river. Most of the products we consider, we look for cases where we can lower our environmental impact or produce revenue in some cases. They are good for the environment and good for communities. (3:35) 
• Why Companies Should View Sustainability Initiatives From A Variety Of Angles: It’s definitely a change of mindset to develop a culture with this viewpoint. I’ll compare it to safety. The railroad industry historically did not have a good culture around safety. Starting in the 1980s and moving forward, we went to companies who were very safety minded, had a safety culture, and we learned best practices. And we have a strong safety culture in the railroad industry now. This is how we look at integrating sustainability. We want it to be a part of every employee’s thought process. Not that they have to really think about it, but it’s just a part of who they are and it’s a part of their decision-making process. One thing I did when I entered this role last year was to relaunch our corporate sustainability advisory council. We have members from every department on the railroad and it’s not just about the quarterly meetings we have, it’s really about having that leadership person in each department who is helping to communicate sustainability to those folks in their department. These are ambassadors for the sustainability and decision-making processes. So, I tell folks, “I’m a department of one but I’m a team of 19,000. So, all of you are a part of sustainability. It’s not just my job, it’s all of us.” (5:10) 
• How To Prioritize Sustainability Initiatives: Sustainability can go all different routes and in all different directions, and one thing we’ve done recently is utilizing our sustainability counsel and also bringing in some subject manager experts within our company to have a two-day design think workshop to really discuss what is important. What is important to our stakeholders? We had a materiality assessment ahead of time and we identified five pillars in sustainability that we really want to engage with, create working groups around, and we’re going to have team leaders for each of those working groups. We set targets and set action plans around those so that’s really where we’re headed. I will say historically, we did a really great job of measuring things, but maybe not as good a job at managing. Now we are moving more toward the management side of sustainability and really challenging ourselves with some of these ambitious targets — including a science-based target for emissions reduction which we announced last month. (7:23) 
• One Of The Key Sustainability Initiatives We’re Focused On Right Now: Our largest environmental impact is locomotive diesel. This comprises over 90% of our emissions. Anything we can do to lower emissions is good for our bottom line. Lowering emissions is good for our customers because at the end of the day, our emissions are our customers emissions. And more of our customer base is looking at their supply chain emissions, they’re wanting to measure those, but they’re also wanting to understand how we can lower those emissions. A lot of our customers are just now starting their sustainability journey so we can assist them in that regard in helping to identify lanes for those conversions. Not every lane makes sense to go by rail, but there are a lot of opportunities out there. There are things moving right now that are in expedited fashion that maybe don’t need to be. (8:32) 
• Why They Focus On Maximizing Efficiencies With What Is Available Now: Some of the conversations we have with regulators or our customer base is hype around EV and hydrogen, and there will be a lot of opportunities and we’re cautiously optimistic. We definitely think it’s going to drive change, but the biggest lever that any shipper has right now is their mode. What mode are they choosing to move their product, re-examining their supply chain, and maybe just source product from a closer position. Basically, developing a closer-knit supply chain. There are a lot of solutions that we’ve seen in the last year that shippers are really looking at. They’re wanting to build up their supply chain, not just to support the sustainability of their business to keep it moving, but also to lower their environmental impacts. And we believe rail can be a significant part of that solution. (9:38) 
• The One Thing Everyone Should Know About Sustainability In The Rail Transportation Industry: If you look at emission in particular, rail, on average, has 75% less emissions than trucks. It is three to four times more efficient, 100 times more efficient than air cargo. Right now rail freight is moving 45% of all the long-distance freight in the US. So that shipment is over 1000 miles. But rail only creates 7% of all freight emissions. So that’s very significant. We definitely have a leadership position to play in that regard. We’re going to continue to challenge ourselves, all seven of the class railroads in the US, North America, have committed to science-based targets for emissions. You won’t see any other sector in the world that has made that level of commitment. We are going to challenge ourselves and we are going to challenge our manufacturers. We really depend on them for the equipment and the technology to further drive rail efficiency improvements. At the end of the day we’re delivering the low carbon economy for our customers and at Norfolk Southern. we’re in the business of a better planet. (10:44) 

TRANSCRIPTION

Jennifer: Tell me more about your role and responsibility as the chief sustainability officer.

Josh: It’s really about developing and executing our strategy around sustainability to drive value, to drive value for all of our stakeholders. All of them have different interests in sustainability. And sustainability really in its very essence is being good stewards of our assets and those can be money, those can be people, our equipment, our time. And so, it’s really about driving efficiency throughout the organization that creates value. 

Jennifer: How has your role as the general manager influenced your viewpoints on sustainability? 

Josh: First of all, I’d start off by saying that Norfolk Southern, we were one of the first US companies to create a sustainability program starting back in 2007. At the time, the leadership in our company realized the value of just driving efficiency and lowering our environmental impacts could have a positive impact [2:00] on our company looking long term. And our company has been a business almost 109 years now. If we weren’t sustainable, we wouldn’t be in business now. And so, as we look toward the future we challenged ourselves in a number of areas at that time and I was fortunate to work with our first chief sustainability officer, Blair Wimbush through that time as we developed our program. But sustainability, it is a journey it’s not a destination and we’re continuing to refine our program and look for ways to get better. So, my role as the general manager allowed me to lead a lot of our environmental projects. Some of those projects were around forest restoration projects. For example, we’ve done two different forest carbon projects. We currently have a wetland project that was completed a few years ago and another one under construction now that is going to restore 500 acres of wetlands and 600 miles of stream which have positive environmental impacts. They’re good economically, and they’re great for the surrounding communities. And so those are the kinds of projects that we go out to lead so my background has really been in wildlife, environmental. And so, it’s kind of unique for a sustainability officer. Not everyone has that land background that I have. And I’ve worked a lot in different conservation groups as well and I’ve used that expertise to help others and also to help myself as well to engage with others. 

Jennifer: You’ve been fortunate to be at Norfolk for almost 25 years now. How has sustainability evolved over that time period? 

Josh: It’s hard to believe it’s been 25 years but I would say that when we first thought about sustainability, it was more about environmental compliance. It was a little bit about fuel efficiency, and it was more about economic returns. And I think now what you see is its more about engagement with communities. Its about using a different set of lenses when you look at projects instead of just pure financial return. [4:00] Its really how can you create multiple values and create things in a different way. And one example I’ll point to is our living shoreline project we completed last year. We lost around three acres of land at our Lambert’s Point Terminal in Norfolk Virginia on the Chesapeake Bay the Elizabeth River. And it was like, okay, we could come in and develop this fully armored shoreline of rock but what did we really accomplish from an environmental perspective. And so, we partnered with a local conservation group to come up with a better plan. And we created a living shoreline, a native vegetation, restored the shoreline and it saved 75% of costs and we have this great habitat there and its also much more aesthetically appealing. Because its along the main stint of the river. Those are projects that we look for that can lower our environmental impact or produce revenue in some cases. And they’re good for the environment and they’re good for communities. 

Jennifer: That’s how every company should be thinking about looking for those sustainability opportunities where you see benefits for all sides of the business as well as the communities that you’re impacting as well. 

Josh: Yeah. Yeah, its definitely a change of mindset and you’re developing a culture is literally what you’re trying to develop, and I’ll compare it to safety. The railroad industry historically did not have a good culture around safety and that changed. Starting in the 1980s and moving forward we went to companies who were very safety minded, had a safety culture and we learned from them and we learned best practices. And we have a strong safety culture in the railroad industry now. It’s safer than the hotel industry, and the grocery industry, so we have a safety culture and it’s just a part of who we are, and I will say that’s where we looked ahead as we integrate sustainability. We want it to be a part of every employee’s thought process. Not that they have to really think about it but its just a part of who they are and it’s a part of their decision-making process. So, one thing that I did when I entered this role last year [6:00] was I relaunched our corporate sustainability advisory council. So, we have members from every department on the railroad and its not just about the quarterly meetings we have, its really about having that leadership person in each department that is helping to communicate sustainability to those folks in their department. And I really feel its ambassadors as we enter the sustainability and decision-making processes. But those are also my contacts, those are my people that I reach out to and encourage but also, they can reach out to me for a resource for one another. So, I tell folks, is say, “I’m a department of one but I’m a team of 19,000. So, all of you are a part of sustainability. Its not just my job, its all of us.” 

Jennifer: How do you prioritize sustainability initiatives? 

Josh: Sustainability, you can go all different routes, all different directions and one thing that we’ve done recently is utilizing our sustainability counsel and also bringing in some subject manager experts within our company as we had a two-day design think workshop to really discuss what is important. What is important to our stakeholders. We had a materiality assessment ahead of time and we identified five pillars in sustainability that we really want to engage with, we want to create working groups around, and we’re going to have team leaders of each of those working groups. So, we set targets, we set action plans around that so that’s really where we’re headed. [8:00] A really getting more defined so I will say historically, we did a really great job of measuring things but maybe not as good a job at managing. So now I think its moving more toward the management side of sustainability and really challenging ourselves with some of these ambitious targets. Including a science-based target for emissions reduction which we recently announced last month. 

Jennifer: What is one of the different initiatives that you’re focused on right now? 

Josh: Our largest environmental impact is locomotive diesel. That’s over 90% of our emissions. So, anything that we can do to lower emissions its good for our bottom line and its good for the communities we operate, it lowers emissions, and its good for our customers because at the end of the day, our emissions are our customers emissions. And more of our customer base are looking at their supply chain emissions, they’re wanting to measure those, but they’re also wanting to understand how can we lower those emissions. A lot of our customers are just now starting their sustainability journey so we can assist them in those regards in helping to identify lanes for those conversions. That makes sense, not every lane makes sense to go by rail but there’s a lot of opportunities our there. There are things moving right now that are in expedited fashion that maybe don’t need to be. 

Jennifer: That’s excellent. I love the fact that you’re addressing the urgency as well where…I feel like a lot of people are still waiting for those future technologies to make a difference but there are so many ways to maximize efficiencies today, use what’s available today to start making progress instead of just waiting for something to come up.

Josh: Yeah, you’re exactly right, Jennifer. So, some of the conversations that we have with regulators or customer base there’s all this hype around EV and hydrogen, and there’s a lot of opportunities and we’re cautiously optimistic. We definitely think its going to drive change but the biggest lever that any shipper has right now is their mode. What mode are they choosing to move their product, re-examining [10:00] their supply chain, and maybe just get sourcing product from closer. Developing a closer-knit supply chain. There’s a lot of solutions I think what we’ve seen in the last year is shippers are really looking at that. They’re wanting to build up their supply chain, not just to support the sustainability at their business to keep it moving, but also to lower their environmental impacts. And we believe rail can be a significant part of that solution. 

Jennifer: What is one thing that everyone should know about sustainability in your industry? 

Josh: What I think is that we look at emission in particular rail on average is 75% less emissions than truck. Its three to four times more efficient, 100 times more efficient than air cargo. Right now the rail freight is moving 45% of all the long-distance freight in 10 miles in the US. So that shipment is over 1000 miles. But rail only creates 7% of all freight emissions. So that’s very significant. So, we definitely have a leadership position to play in that regard. We’re going to continue to challenge ourselves, all 7 of the class railroads in the US, north America, have committed to science-based targets for emissions. You won’t see any other sector in the world that has committed to that level of commitment. So, we are going to challenge ourselves, we are going to challenge our manufacturers. We really depend on them for the equipment, the technology to further drive rail efficiency improvements. At the end of the day we’re delivering railcar to the economy for our customers and at Norfolk Southern we’re in the business of a better planet.