Norfolk Southern called itself “the first Class I railroad in North America to issue green bonds” in the announcement.
The point of green bonds is to raise capital for projects and transitions that make companies operate more sustainably or reduce emissions.
Norfolk Southern is working to convert 600 older DC locomotives into more reliable AC locomotives, which have more pulling power, by the end of 2022.
The green bond funding could also go toward renewable energy, traffic-alleviating technology, more efficient facilities, waste-minimization and recycling programs, environmental restoration projects and other emission-reduction projects.
Rail is a “very capital-intensive” industry, so the company issues bonds to fund certain capital-intensive projects, Raglin said.
Many investors, customers and employees are calling for sustainable progress.
When freight companies such as Norfolk Southern reduce their emissions, it also lowers the supply chain emissions for its customers.
Norfolk Southern will publish an annual green bond report on its website, which will include how much funding was allocated for each green project and how many bonds are still outstanding, Raglin said.
This announcement comes after Norfolk Southern committed to establishing a science-based target to reduce emissions during FreightWaves’ Net-Zero Carbon Summit on Earth Day.