WHEREAS: The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. 
Every incremental increase in temperature above the Paris Agreement’s goal of holding warming to 1.5°C will entail increasingly severe physical, transition, and systemic risks for companies and investors alike.
In its 2022 10-K, Norfolk Southern Corporation (“Norfolk”, or “the Company”) highlighted its climate risk, noting, “Severe weather and disasters have caused, and could again cause, significant business interruptions and expenditures.” The Company also noted, “Restrictions, caps, taxes, or other controls on GHG emissions, including diesel exhaust, could significantly increase our operating costs and decrease the amount of traffic we handle.”
Despite acknowledging its climate risk, Norfolk’s mitigation strategy falls short of what is needed to shield the Company and investors from climate-related risks. The Company’s short-term commitment through the Science Based Targets initiative (SBTi) is not aligned with limiting warming to 1.5°C. SBTi will soon require targets not yet aligned with 1.5°C be updated to reach alignment in order to be validated.  Norfolk also does not have a long-term GHG reduction target aligned with the goals of the Paris Agreement.
Norfolk trails its competitors in setting holistic GHG reduction targets and managing climate risks. Union Pacific has committed to setting near and long-term science-based targets (SBTs) through SBTi. The Canadian National Railway Company has also committed to set a long-term SBT through SBTi.
There is growing interest from investors in increased disclosure of how companies are addressing the climate crisis and planning to transition their business models to ones that align with limiting warming to 1.5°C. To assist companies in developing viable transition plans, groups including We Mean Business, CDP, State Street Global Advisors, and the Task Force on Climate-Related Disclosures have provided guidance.
Ramping up its climate-related initiatives may unlock opportunities for Norfolk’s growth by preparing the Company for future climate-related regulations that would affect its operations. The Company can also become a more compelling sustainable solution for customers and potential customers decarbonizing their supply chains.