Relevant Issues (5 of 26)
- GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
- Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
- Energy Management
- Water & Wastewater Management
- Waste & Hazardous Materials Management
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
- Labor Practices
- Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
- Employee Engagement, Diversity & Inclusion
Business Model & Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership & Governance
- Business Ethics
- Competitive Behavior The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
- Systemic Risk Management
Disclosure Topics (Industry specific) for:
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Greenhouse Gas Emissions
The Rail Transportation industry generates emissions mainly through the combustion of diesel in locomotive engines. Despite relatively low emissions compared to other transportation industries, fuel management has implications for companies in the industry in terms of operating costs and regulatory compliance. Greenhouse gases (GHGs) including carbon dioxide (CO2) are of particular importance to government regulators concerned about climate change. Intensifying regulation of locomotive exhaust emissions and high fuel costs provide incentives for rail companies to invest in fuel efficiency enhancements to manage emissions. This can increase operational efficiency and impact the cost structure of rail companies, with chronic and acute impacts on value and competitive position both within the industry and compared to other modes of transport.
Rail operations emit several types of air pollutants that are regulated under national and international laws, including hazardous air pollutants (HAPs), criteria air pollutants (CAPs), and volatile organic compounds (VOCs). These pollutants tend to have localized environmental and health impacts. For example, locomotive engines idling at rail yards may be a health concern for nearby human populations as HAPs such as benzene are known human carcinogens, while nitrogen oxides (NOx) are a major component of smog and acid rain. At the same time, fuel is a significant industry cost. Rail companies that implement fuel efficiency enhancements and manage emissions may see impacts to their costs in both the short and longer term.
Employee Health & Safety
Employee Health & Safety
Moving freight by rail is associated with the risk of accidents and unintended releases of hazardous materials. These can harm the health and well-being of employees as well as have negative financial impacts on companies, such as reduced productivity, higher employee turnover, and increased insurance costs. Rail operators are likely to be impacted by accidents, and in some cases, poor health may also cause accidents. A healthy workforce, strong safety culture, thorough and systematic approach to safety, risk management programs (including emergency preparedness and response), and operational integrity at all levels of a company can help lower the probability and magnitude of rail accidents.
Industry consolidation and prior allegations of anti-competitive practices in relation to captive shippers, among other reasons, create pressure on antitrust immunity granted to railroads in some regions. Some of the proposed policy changes could lead to significant costs or impede investment in the industry. Rail companies operating at the limits of allowable charges in areas where they could be found to have market dominance, or those not complying with regulations about reasonable rates, are likely to face increased regulatory scrutiny. Any associated fines or penalties may negatively affect a company’s valuation by increasing its cost of capital. In an environment of increased concerns about the market power and pricing practices of rail companies, it is in their interest to continue to ensure competitive pricing and transparency in rate-setting while achieving adequate returns on their investments.
Critical Incident Risk Management
Accident & Safety Management
Rail accidents and unintended releases of hazardous materials can have repercussions for the environment and communities along railroad tracks, as well as financial impacts on companies themselves. Increasingly stringent safety regulations and the potential for significant costs following major accidents provide incentives for companies to manage their safety performance through a robust safety management system. In addition, the loss of consumer confidence after such events can result in lower revenues and potentially damage a company’s social license to operate, increasing its cost of capital.
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