The Intergovernmental Panel on Climate Change reports that immediate emission reductions are required to limit global warming to 1.5°C, thereby avoiding the most catastrophic consequences of climate change. Investor demand for science-aligned emission reduction strategies underscores the reality that companies and investors are increasingly exposed to severe physical, transition, and systemic climate risks.

Old Dominion Freight Line Inc, a leading less-than-truckload (LTL) carrier with a fleet of 10,700 vehicles across the continental United States, faces customer and investor demand for decarbonized supply chains and increasing climate regulations. Despite a shareholder proposal on emissions last year with nearly 25% support, the Company has not demonstrated any meaningful progress.

The Company’s actions remain limited to disclosure of emissions and fuel-efficiency metrics, ongoing route-optimization, and limited pilots of alternative fuels and vehicles.[1] The Company lags competitors in setting emissions reduction targets, integrating alternative vehicles, and providing customer-specific decarbonization services.

Transportation, responsible for 28% of U.S. energy consumption, faces increasing climate-protective regulations. [2] A consortium of 17 states in key operating corridors has set targets to achieve 100% zero-emission truck sales by 2050.[3] California’s Advanced Clean Fleets rule requires commercial fleets to phase out non-zero emission vehicles starting in 2027.[4] Per Old Dominion’s 2024 10-K, the increase in climate-related laws and regulations could increase direct costs and impact operational risks.[5]

Heavy-duty zero-emission vehicle technology is accelerating. Battery-electric Class 8 vehicles are expected to achieve cost parity with diesel models by 2030, driven by higher energy efficiency and lower operating costs.[6] Additionally, current battery technologies provide economically viable alternatives for a variety of other vehicle classes and duty cycles.[7] Setting emissions reduction targets would position Old Dominion to systematically incorporate cost-effective technologies and optimize long-term fleet management.

Competitors in the LTL space, including Knight-Swift Transportation, Werner Enterprises, DHL, and FedEx,[8] have emission reduction targets. DHL and FedEx also provide advanced services to support customer decarbonization, a critical advantage as a growing number of companies set targets to reduce their value chain emissions.[9]

By committing to emission reduction targets and creating a climate transition plan, Old Dominion can address customer, regulatory, and competitive pressures and position itself to benefit from the transition to a low-carbon economy.