Canadian Pacific (CP) on July 26 released its “first comprehensive climate strategy,” outlining how it is working to reduce greenhouse gas (GHG) emissions and adapt operations to the physical risks of climate change.
The report (download below) builds on CP’s Climate Change Commitment, which was issued last July.
It provides the Class I railroad’s objectives across five pillars:
1) Establish “a clear understanding of climate-related risk and opportunities.” To support that understanding, CP reported undertaking its first in-depth climate scenario analysis in 2020.
2) Reduce the company’s “carbon footprint.” CP reported that it “commits to reducing Scope 1, 2 and 3 GHG emissions intensity of its locomotives by in excess of 38% by 2030,” and to “reducing absolute Scope 1 and Scope 2 GHG emissions from non-locomotive operations by in excess of 27% by 2030.” These targets, the railroad noted, “are based on the most current methodology available to the transportation sector through the Science-Based Targets initiative (SBTi), with CP’s locomotive target recently approved by SBTi.” In addition, CP’s climate strategy, and supporting emissions reduction targets, “have been developed in alignment with the goals of the Paris Agreement and the Pan-Canadian Framework on Clean Growth and Climate Change, which seek to limit global temperature increases to well below 2°C,” according to the railroad.
3) Adapt operations to the physical risks of climate change. “To support the resilience of our business, we are aligning our technical expertise and network management systems with leading climate science,” CP reported. “It will be important to be proactive, and we have been evaluating various ways to mitigate climate-related risks to our network through active monitoring and focused efforts to harden our infrastructure.”
4) Integrate “climate factors” across the business. The Risk and Sustainability Committee of CP’s Board of Directors provides oversight and reviews climate-related risks and opportunities. CP reported that the risks and opportunities identified to date will be integrated into enterprise risk management, capital expenditures and strategic planning. Integrating climate factors could include “the creation of specific low-carbon budgets and inclusion of a shadow price on carbon in our capital expenditures process,” according to the railroad.
5) Engage with stakeholders on “climate action.” The core components of this are: education, partnerships, policy and disclosure.
“CP’s Climate Strategy is ambitious, which we feel appropriately reflects the urgency of the fight against climate change,” CP President and CEO Keith Creel said. “We look forward to collaborating with government, industry and research partners to create and test the new solutions required to achieve our targets. CP has been in business for 140 years, and this collective commitment to sustainability and willingness to integrate new approaches will ensure we have a future as bright as our past.”
CP noted in its announcement that it has already taken steps to reduce GHG emissions. This work includes installing a large solar farm at its Calgary corporate campus capable of generating more power than consumed annually by the main headquarters building. CP has also initiated a hydrogen locomotive program. The railroad is retrofitting an existing diesel-electric linehaul locomotive, replacing its diesel prime mover and traction alternator with hydrogen fuel cells and battery technology to power its electric traction motors.
Additionally, as part of CP’s overall Sustainably Driven strategy, the railroad reported that it “participates in leading sustainability disclosure frameworks including CDP, Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD). Aligned with these frameworks, CP will continue to disclose annual emissions, management practices and ongoing energy efficiency initiatives, and commencing in 2022 will report to its shareholders on its progress on the Climate Strategy.”