Forging a sustainably pushed transport sector

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The creation of Canadian Pacific Kansas Metropolis Restricted (CPKC) in April 2023 reshaped the North American freight rail {industry}. With international headquarters in Calgary, Alberta, Canada, CPKC is the one single-line transcontinental railway linking Canada, the US, and Mexico, providing shippers unparalleled rail service and entry to main North American ports and international markets. Stretching roughly 20,000 route miles, and using round 20,000 railroaders, CPKC is a serious transportation service supplier, employer and neighbour to communities throughout the continent.

CPKC’s mixture of two historic railroads – Canadian Pacific (CP) and Kansas Metropolis Southern (KCS) – has steadily constructed momentum, bringing new competitors to provide chains and creating extra worth for our clients, whereas remaining steadfast on the mixing of our operations, service and security. This strategic union additionally created a singular alternative to embed accountable enterprise practices as we proceed to construct our enterprise for the longer term. Since CPKC’s formation, our progress has been firmly rooted in early-stage integration measures encompassing governance, workforce, and techniques integration. These strategic steps have supported us in upholding our dedication to security, supporting seamless service supply to our clients, and fostering sustainable operations.

In a yr of great change for our firm, we ended 2023 with a powerful efficiency. CPKC led the {industry} with the bottom Federal Railroad Administration-reportable prepare accident frequency amongst Class I railroads, constructing on CP’s legacy of 17 consecutive years main the {industry} on this metric. We established a brand new local weather purpose for CPKC’s mixed locomotive operations and continued to spend money on industry-leading low-carbon Technology. We deepened our connections with native communities by means of impactful neighborhood funding initiatives and significant partnerships. We additionally reconstituted our Range & Inclusion Council to guide our efforts on this space as we combine CPKC.

These vital measures clearly reveal to our workers, clients, suppliers and the communities the place we function our continued dedication to being a sustainability chief. As we transfer by means of our second yr as CPKC, sustainability stays entrance and centre of our integration journey.

A sustainably pushed tradition
Combining two railroads working in three nations and a various workforce of round 20,000 railroaders is a major endeavor. Folks and tradition are key drivers to CPKC’s success. A main purpose of our integration has been to foster a tradition united within the pursuit of security excellence, best-in-class service for our clients and accountable enterprise practices.

Sustainability stays entrance and centre of our integration journey

Security is foundational to the whole lot we do, and sustaining stringent security requirements is essential amid the advanced adjustments going down in our enterprise. In 2023, we rolled out Residence Secure, our flagship security programme, throughout our Southern US and Mexico working areas. By way of Residence Secure, we work to guard our railroaders, our communities, our clients and the surroundings. Upholding our Residence Secure dedication day by day, we improve our security tradition by means of quarterly security walkabouts and celebrating security efficiency by means of our annual Security Awards for Excellence. Security walkabouts deliver collectively administration, Office Health & Security Committee members, frontline railroaders and varied regulators to proactively determine and deal with office hazards whereas selling a secure working surroundings.

All through our community, many passionate railroaders embody our Residence Secure dedication and actions. Yearly, we recognise these people on the CPKC Security Awards for Excellence, honouring their dedication to championing our Residence Secure ideas and searching for the wellbeing of their colleagues on daily basis. Whereas we frequently work to be safer immediately than we had been yesterday, we additionally recognise that security is a journey, not a vacation spot. We are going to proceed reinforcing a strong security tradition in pursuit of our purpose of being North America’s most secure freight railroad.

With workers in three nations, fostering a tradition the place all views are heard and valued is crucial to unlocking the complete potential of CPKC’s workforce. We established a Range & Inclusion Council led by senior leaders to champion the event of our variety and inclusion technique as we combine CPKC. The council held 15 digital Range Dialogue engagement periods to faucet into the wealth of CPKC worker views. Over 200 workers participated in these periods, offering perception to assist inform the evolution of CPKC’s technique.

Increasing our operational attain brings added accountability. As a neighbour to tons of of communities throughout North America, CPKC is devoted to working safely and making a significant affect within the communities through which we stay, work and function. In 2023, we expanded our emergency response coaching and public security consciousness engagement with personnel, neighborhood first responders and different stakeholders in communities alongside our proper of approach. CPKC organised or participated in 82 neighborhood consciousness and emergency coaching occasions, attended by greater than 4,000 emergency responders. In help of native meals banks, our annual 2023 Vacation Prepare programme reached communities throughout our community in Canada, the US and Mexico, elevating CAD$1.8m and accumulating over 160,000 lbs of meals.

CPKC local weather technique
The transportation sector has an important position to play within the transition to a lower-carbon economic system. Our purpose is to be a pacesetter on this transition. Freight rail is the spine of world commerce, transferring items throughout huge distances with higher gas effectivity than long-haul trucking. CPKC strives to cut back operational emissions and drive change inside freight rail by means of innovation and collaboration with {industry} companions, clients, governments, and suppliers on local weather options.

Freight rail is the spine of world commerce, transferring items throughout huge distances

Considered one of CPKC’s early accomplishments was to launch our dedication to local weather motion, which units out our dedication to develop an emissions goal aligned with a 1.5°C future. On the identical time, we introduced a GHG emissions discount goal, which was validated by the Science Based mostly Targets Initiative, to cut back our well-to-wheel locomotive emissions by 36.9 p.c per gross ton-mile by 2030 from a 2020 base yr.

As we refine our local weather technique, we proceed to implement initiatives to cut back operational emissions, together with exploring and investing in industry-leading low carbon options. This contains creating North America’s first line-haul hydrogen-powered locomotive utilizing gas cells and batteries to energy the locomotive’s electrical traction motors. For the reason that programme’s inception in 2020, now we have continued to satisfy key milestones on this pioneering endeavour. In 2023, we accomplished two hydrogen locomotive conversions and superior manufacturing on a 3rd, in addition to the set up of hydrogen manufacturing and fueling services. Along with CSX, we introduced a three way partnership to construct and deploy hydrogen locomotive conversion kits for diesel-electric locomotives at CSX’s locomotive store in West Virginia.

In March 2024, we marked one other vital milestone with the one-year anniversary of our locomotive biofuel trial mission. As a part of this initiative, CPKC is collaborating with our {industry} friends and locomotive suppliers to check the long-term operational impacts of utilising diesel blended with 20 p.c biodiesel renewable gas inside our locomotive fleet. In 2023, we accomplished greater than 500 fuelling occasions and utilised greater than 8.2 million litres of B20 gas in our locomotive operations. For each litre of standard diesel gas that’s changed with B20, we scale back complete emissions by 18 p.c. This pilot mission is a important step in validating the operational impacts of utilising superior blends of renewable biofuels in CPKC’s locomotive fleet.

Along with our investments in low carbon initiatives, CPKC continues to improve our locomotive fleet and rail community to enhance total effectivity and supply system reliability by means of our capital expenditure programme. In 2023, we invested CAD$2,468m in capital expenditures to take care of and improve our locomotive fleet and community to enhance total effectivity and guarantee system reliability.

These accomplishments replicate CPKC’s dedication to working sustainably and a tradition of steady enchancment. As we advance by means of our second yr as CPKC, we’re maintaining sustainability entrance and centre in our integration journey. We stay dedicated to selling constructive change each inside CPKC and past.

Please see our filings with securities regulators in Canada and the US for added Information and cautionary statements referring to our sustainability efforts, together with components that would have an effect on the forward-looking Information on this article.