Operational Excellence

Climate Change


Operational Excellence
Climate Change

Manage energy consumption, including fuel, to improve energy efficiency and reduce emissions.

Why It Matters

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Explanation of the material topic and its Boundary

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Climate change is the challenge of our generation, presenting both risks and opportunities for CP and the global supply chain. Impacts on our operations from physical risks, including heavy precipitation, flooding, temperature extremes, and powerful storm events, can disrupt CP's network and are expected to intensify due to climate change. Additionally, market fluctuations, emerging regulations and technological changes, driven by stakeholder expectations for lower carbon goods and services, are anticipated to create both risks and opportunities across value chains. Mitigating climate risks while capitalizing on emerging low-carbon opportunities will require strategic and decisive action as businesses rise to this challenge.

For more than 140 years, CP has embodied strategic, long-term thinking and continued successful operations through substantive economic, cultural and political changes. As we look ahead, we remain committed to long-term sustainable growth, planning for the future and confronting the challenges created by climate change. Climate leadership within the rail industry will require a diverse range of actions and expertise, from alternative fuels and emerging technologies to customer engagement, business integration and improved resilience of our physical assets. Transportation of freight by rail will play an integral role in the low-carbon future for North America, and we are proud to take a leadership role in this transformation.

Our Approach

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The management approach and its components

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Financial implications and other risks and opportunities due to climate change

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CP'S FRAMEWORK FOR CLIMATE ACTION

CP’s Climate Strategy outlines the Company’s approach to managing potential climate-related impacts, reducing our carbon footprint and establishing CP as an industry leader in the transition to a low-carbon future. 

Our Climate Strategy provides consistent direction across the business and is essential to align financial planning processes, support strategic investments, enhance network resiliency and unlock cost savings to help CP achieve our climate action goals. We recognize that a clear, proactive Climate Strategy is critical to attracting and retaining customers pursuing their own climate action goals, building trust and collaboration across the value chain and empowering our employees to identify innovative ideas and solutions. Ultimately, we believe that this strategy will strengthen CP’s brand as a sustainable transportation solution, delivering long-term sustainable growth for shareholders.

Our Climate Strategy applies to all of our business operations in Canada and the U.S. and supports ongoing collaboration and engagement with stakeholders within and beyond our value chain. To ensure relevance and comparability within and outside of our sector, our Climate Strategy aligns with internationally recognized frameworks, including the Task Force on Climate-related Financial Disclosures (TCFD); the Paris Agreement on climate change mitigation, adaptation and finance (within the United Nations Framework Convention on Climate Change); and the Pan-Canadian Framework on Clean Growth and Climate Change.

To respond to the risks and opportunities posed by climate change and meet our decarbonization commitments, our Climate Strategy includes actions across five strategic pillars.

Our Five Strategic Pillars


GOVERNANCE

The implementation of our Climate Strategy will align with our existing sustainability governance structure. CP’s President and Chief Executive Officer (CEO) is ultimately accountable for our climate change performance. The Risk and Sustainability Committee of our Board of Directors provides oversight and reviews climate-related risks and opportunities. Due to the importance of fuel efficiency on CP’s overall carbon footprint and bottom-line performance, key indicators related to fuel efficiency are indirectly linked to the annual bonus compensation for operating executives in our compensation program, including our President and CEO.

To lead our focus on decarbonization, we have established a Carbon Reduction Task Force, composed of CP’s industry-leading engineers and operations experts. The Carbon Reduction Task Force will evaluate and implement climate action measures to reduce our greenhouse gas (GHG) emissions and drive performance in the direction of our science-based targets. CP is working to foster an enterprise-wide innovation mindset that encourages creative thinking and collaborative problem solving to reduce our carbon footprint by lowering—and potentially eliminating—GHG emissions across our business.

UNDERSTANDING CLIMATE-RELATED RISKS AND OPPORTUNITIES

A clear understanding of the risks and opportunities related to climate change and our business is fundamental to effectively manage potential impacts. CP’s awareness of these issues and plans to mitigate climate risks are subject to an increased focus by the financial community and other stakeholders. To inform the development of the Climate Strategy, we completed our first climate scenario analysis in 2020. This analysis evaluated possible impacts to CP under different future climate scenarios, allowing us to stress-test the business and assess our resilience under a range of possible climate conditions. The following scenarios were used in the analysis:

  • Business as Usual scenario, where no (or limited) significant actions are taken to respond to climate change, current policies remain in place, and physical impacts from extreme weather are significant. Market distortions are possible, and business conditions could be more variable and less predictable. Overall global warming is expected to be in the range of 5 to 6°C.
  • Incremental scenario, where most nations implement pledges made under the Paris Agreement and actively progress towards their stated goals. However, changes are slow, signals are mixed and common action to raise ambition beyond the Paris Agreement is unrealized. This future scenario assumes 3 to 3.5°C of global warming.
  • Transformative scenario, where most countries, especially the largest economies, embrace a rapid pace of climate action and a low-carbon transition. This action puts the world on a path for warming to be well below 2°C by 2050 by quickly changing regulations, markets and technologies. This scenario assumes 1.7°C of global warming.

The outcomes of the scenario analysis have advanced our understanding of how policy, market, technology and physical impacts may manifest in future risks and opportunities to CP.

CP’s Key Climate Risks and Opportunities

By completing scenario analysis and engaging with a wide range of CP’s internal stakeholders, we identified several priority climate impacts for further exploration and detailed financial modelling.

RESPONDING TO PHYSICAL RISKS FROM CLIMATE CHANGE

To support the resilience of our business, we are aligning our technical expertise and network management systems with leading climate science. Continually improving our physical risk identification and assessment mechanisms will inform CP’s climate-related strategies and guide investments in our network and assets. Read more about our efforts to enhance CP’s resiliency against physical climate risks in Asset & Rail Network Resiliency.

REDUCING OUR CARBON FOOTPRINT

We are committed to reducing the carbon footprint of our operations, including all Scope 1, 2 and 3 GHG emissions. Our Climate Strategy includes ambitious science-based targets that we have set to guide emissions reductions across our business.

The majority of CP’s carbon footprint is associated with the operation of our fleet of diesel-powered locomotives. We have long focused on locomotive fuel efficiency measures to lower operating costs and reduce the environmental impact of our operations; however, we recognize that achieving further emissions reductions will require innovative technology and operational changes. CP is a critical component of the North American supply chain, and our efforts to reduce our GHG footprint benefit our business and support the climate action objectives of our customers.

CP's GHG Emissions Footprint (Targets Baseline)


 
Scope 1: 3,130,000 metric tonnes CO2e
 
Scope 2: 49,000 metric tonnes CO2e
 
Scope 3: 1,734,000 metric tonnes CO2e

[1] Tank-to-wheel refers to a subrange in the energy chain of a vehicle that extends from the point at which energy is absorbed to discharge

[2] Well-to-tank refers to the subrange of fuel supply from production to supply

How are CP’s emissions classified?
  • Scope 1 emissions are from CP’s direct combustion of fuel, including fuel that powers our locomotives and company vehicles and facilities.
  • Scope 2 emissions are associated with the electricity we purchase across our extensive Canada and U.S. network.
  • Scope 3 emissions are associated with other parts of our value chain, such as purchased goods and services, other fuel- and energy-related activities, business travel and employee commuting.

TIME FRAME

The challenges presented by climate change require immediate and sustained action during the coming decades. To align our approach with leading scientific and policy guidance, our Climate Strategy establishes science-based emissions reduction targets to guide our activities until 2030. CP also acknowledges the importance of the 2050 time horizon in response to climate change and will continue our leadership in the pursuit of technology and other means that have the potential to deliver more significant decarbonization beyond our 2030 target.


 

CP scores an A- on 2020 CDP Climate Change Disclosure Reporting

CP is proud to announce that it received a leadership level score of A- from CDP for its 2020 climate change disclosure. This accomplishment represents a significant milestone in CP's journey to integrate climate-related risks and opportunities into the company’s sustainability programs and reporting practices.

“We are proud to be recognized by CDP as a leader in taking action to confront climate change,” said Keith Creel, CP’s President and Chief Executive Officer. “A leadership level score of A- from CDP is a reflection of our efforts to position CP for a sustainably-driven future by implementing climate action within our own operations, while engaging with our value chain to enable positive change beyond our organization.” 

Key highlights from CP’s 2020 CDP submission include:

  • CP released its first public statement on climate change, demonstrating its commitment to take action and meet the challenge of climate change. The statement supports the goals of the Paris Agreement and the Pan-Canadian Framework on Clean Growth and Climate Change, which seek to limit global temperature rise to well below 2°C above pre-industrial levels.
  • CP committed to establishing a science-based emissions reduction target to guide its climate action.
  • CP released its 2019 Sustainability Data Supplement, which included for the first time the company’s full Scope 3 greenhouse gas (GHG) emissions, an important step to understanding the broader impacts of CP's business.
  • CP conducted a comprehensive scenario analysis in 2020 to understand the full range of possible climate change impacts to our business and align with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

CDP is an internationally recognized non-profit organization that runs a global environmental disclosure platform assessing companies on their climate-related performance and transparency. CP has been a contributing participant to CDP for over a decade, consistently disclosing annual emissions progress made on practices to improve the management of greenhouse gas emissions and ongoing energy efficiency initiatives.

CP will continue to build on its ambitious vision for sustainability in 2021. Initiatives will include formalizing the integration of climate-related risks into the enterprise risk-management process, developing CP’s strategy for mitigating risk, pursuing opportunities and increasing CP’s operational resilience under various climate change scenarios. Recognizing the global nature of the fight against climate change, CP aims to align with recognized initiatives that bring governments, sectors and supply chains together to support the goals laid out in the Paris Agreement.

For more information, see:

CP’s hydrogen-powered locomotive pilot project

CP’s Hydrogen Locomotive Program aims to develop North America's first line-haul hydrogen-powered locomotive. The program involves retrofitting a line-haul locomotive with hydrogen fuel cells and battery technology to drive the locomotive's electric traction motors. The Hydrogen Locomotive Program has the potential to significantly reduce greenhouse gas emissions from locomotive operations, supporting CP’s Climate Change Commitments and the transition to a low-carbon future in the freight rail sector.

H2 0EL

In the fall of 2021, the first hydrogen locomotive, "H2 0EL", which stands for Hydrogen - Zero Emissions Locomotive, will be prepped for its official painting and launch. Each design element of the locomotive articulates the impact of this innovative, sustainably driven project. The blue and green paint colours represent sustainability, water and technology. The H2 0EL wordmark features angled typography to symbolize movement and progress in action.  

Once launched, CP will demonstrate and evaluate the technical performance of hydrogen-powered locomotives and supporting fueling infrastructure in real-world operations.  

"This is a globally significant project that positions CP at the leading edge of decarbonizing the freight transportation sector," said Keith Creel, CP's President and Chief Executive Officer. "CP will continue to focus on finding innovative solutions to transform our operations and implement our Climate Strategy, positioning CP and our industry as leaders for a sustainable future." 

The work builds on CP’s prior experience with testing low-emitting locomotive technologies, including biofuels, compressed natural gas and battery-powered solutions. Nearly the entire freight locomotive fleet of all railway operators in North America consists of diesel-powered units, representing the industry’s most significant source of greenhouse gas emissions. The ability to retrofit diesel locomotives with a zero-emission technology provides a practical pathway to decarbonizing the freight-rail industry.

CP has long focused on energy-saving initiatives as a core component of its sustainability practices. Since 1990, CP has improved its locomotive fuel efficiency by more than 40 percent through a variety of programs and technology deployments designed to improve fuel economy and reduce air emissions. The application of leading practices, emerging technologies and relationship building across the value chain and industrial sector will remain critical as CP works to implement our Climate Strategy and achieve our science-based emissions reduction targets.

Meet Our Team

Click on the photos to learn more about each member of our Hydrogen Locomotive Program team.

Kyle Mulligan
Chief Engineer, Railway Technology
Gary Wong
Project Engineer
Veronika Kowalczyk
Engineer in Training, Railway Technology
Milan Dubinsky
Senior Power and Control Engineer
Matthew Findlay
Director, Locomotive Regulatory and Finance
Cody Fischer
Systems Engineer, Railway Technology
Kyle Mulligan
Chief Engineer, Railway Technology

As Chief Engineer, Railway Technology, Kyle Mulligan leads a talented team of railroaders to deliver CP’s groundbreaking Hydrogen Locomotive Project.

Kyle has a doctorate (Ph.D.) in mechanical engineering from the University of Sherbrooke, in addition to two degrees in computer systems and electrical and biomedical engineering.

What does sustainability mean to you?

“Sustainability to me means doing the right thing, not the easy thing. The Industrial Revolution enabled a comfortable way of life, but that does not mean we can take it for granted. There are more efficient, cleaner and environmentally-friendly ways of achieving the same standards and goals in life. Everyone plays a part, from composting and recycling to turning off the lights. The technology CP is working on is clear proof that a sustainable future is achievable.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“Every day is a gift. We are truly blessed to be a part of a project that is helping to change the world and to have the confidence from our leadership that we can do so. I am personally humbled and proud to be a part of this project.”

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Gary Wong
Project Engineer

As Project Engineer, Gary Wong is involved in all aspects of CP’s Hydrogen Locomotive Project — from concept to implementation to testing and verification.

With extensive experience gained in various oil and gas technical roles and international experience, Gary is passionate about applying his expertise and knowledge and leading the hydrogen locomotive team to success.

What do you find most exciting about the project?

“I enjoy the technical and commercial aspects of the job, as well as being able to provide guidance and leadership to the team on problem-solving, building the locomotive, working with new suppliers and shaping the future vision for the project.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“CP is a historical company, and similar to the transition from steam to diesel nearly a century ago, as an engineer, I am proud and excited to be at the forefront of new technology and play a direct role in this history-making project.”

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Veronika Kowalczyk
Engineer in Training, Railway Technology

A recent graduate from the University of British Columbia with a degree in mechanical engineering, Veronika Kowalczyk is a valued member of the team responsible for the development of North America’s first hydrogen-powered freight locomotive.

She is passionate about all things sustainability and eager to take part in the development of alternative energy innovations.

What does sustainability mean to you?

“It means investing in the future and conserving our scarce resources so future generations can use them and experience some of the great things we get to enjoy today.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“It feels unbelievable. I cannot help but smile when I think about where I am and where CP is heading with this program. I cannot begin to describe the excitement I feel when I think about this project and the milestones we have yet to achieve. I feel very lucky to be developing this prototype with such a talented team of people and to be able to learn so much from them as an engineer who is just starting her career.”

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Milan Dubinsky
Senior Power and Control Engineer

As Senior Power and Control Engineer, Milan Dubinsky is responsible for developing and building the power and control system for the groundbreaking hydrogen-powered locomotive.

Milan holds a Master’s in engineering and a Ph.D. from the University of Kosice in Slovakia and brings 12 years of international experience from Europe to the team.

What do you find most exciting about the project?

“I feel like we are taking part in creating a better future. We are already seeing a shift in the transportation industry away from using fossil fuel sources, towards zero emissions sources such as electrical cars or hydrogen cars. For me, it is exciting to be able to play a part in this transformation.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“I consider myself extremely fortunate to be able to work with such a talented team of railroaders and be a member of the CP family. I look forward to the day I will be able to tell my children and grandchildren about this opportunity – how a team of six railroaders took a leap of faith in building and developing North America's first hydrogen-powered freight locomotive and the role I played in this technological leap forward.”

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Matthew Findlay
Director, Locomotive Regulatory and Finance

As Director, Locomotive Regulatory and Finance, Matthew Findlay is responsible for supporting regulation development, mechanical systems and maintenance practices of CP’s Hydrogen Locomotive Project.

As a valued member of the team, Matthew is excited about integrating multiple technologies to achieve a safe and reliable zero-emissions line-haul freight locomotive — the first of its kind in North America.

What does sustainability mean to you?

“I have four children, so I’m very conscious about what the future environment is going to look like. In my mind, sustainability is about establishing clean technologies and processes and having a mindset that it’s not right to borrow from the future to fund growth and prosperity today.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“It’s exciting to be part of a company that has the vision to invest in a technological leap forward in how we provide service to our customers in the most sustainable way possible.”

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Cody Fischer
Systems Engineer, Railway Technology

As Systems Engineer, Railway Technology, Cody Fischer is responsible for the systems engineering, design, architecture and analytics for much of CP’s railway technology. In addition, Cody is currently supporting the electrical engineering and control system design of the hydrogen-powered locomotive.

Cody has a degree in electrical engineering from the University of Calgary and is thrilled to be part of a team of railroaders that is pioneering groundbreaking technology in an industry that is ready for a paradigm change.

What does sustainability mean to you?

“The energy industry is changing. It is difficult to predict the future, but we know it must involve a sustainable energy source. The Hydrogen Locomotive Project is an opportunity to influence not only CP’s impact on the environment but also lead the industry down a path of new, innovative technology.”

How does it feel to be at the forefront of developing North America’s first hydrogen-powered line-haul freight locomotive?

“It’s very surreal, especially considering the amount of ground we covered in the development of the hydrogen-powered locomotive in such a short period of time.”

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CP expands Hydrogen Locomotive Program with ERA grant

CP will dramatically expand the scope of its pioneering Hydrogen Locomotive Program with a $15 million grant announced by Emissions Reduction Alberta (ERA) today. The grant enables CP to increase the number of hydrogen locomotive conversions in the project from one to three and add hydrogen production and fueling facilities. The program will create a global centre of excellence in hydrogen and freight rail systems in Alberta.

“In expanding this groundbreaking project, CP is demonstrating its commitment to combatting climate change through transformative technology,” said Keith Creel, CP’s President and Chief Executive Officer. “I am very pleased that ERA selected this program for a grant and I eagerly anticipate seeing a hydrogen-powered locomotive move CP customer freight in the near future.”

CP is receiving the 50/50 matching grant from ERA’s Shovel Ready Challenge program. It builds on the $15 million CP already planned to invest in the development project in 2021. 

In December 2020, CP announced it would design and build North America’s first line-haul hydrogen-powered locomotive using fuel cells and batteries to power the locomotive’s electric traction motors. With the grant announced today, CP will build upon its early program research to convert an additional line-haul locomotive and a yard switcher locomotive. This work will refine the process of converting diesel-electric powertrains to hydrogen-electric powertrains over a series of three categories of locomotive, which collectively represent most locomotives in use throughout North America.

To support hydrogen locomotive operations, the project will include installation of hydrogen production and fueling facilities at CP railyards in Calgary and Edmonton. The Calgary fueling facility will include an electrolysis plant to produce hydrogen from water. This facility will operate on renewable power from solar panels at CP’s headquarters campus and produce zero greenhouse gas emissions. The Edmonton facility includes a small-scale steam methane reformation system that will generate hydrogen from Alberta’s natural gas resources. The system will be constructed to accommodate the possible future addition of greenhouse gas capture equipment.

“Alberta is investing to lead the transition to affordable, reliable and clean energy. CP’s initiative represents a highly compelling opportunity to catalyze the hydrogen economy in Alberta and around the world,” said Steve MacDonald, CEO of Emissions Reduction Alberta. “The project will help scale up technology and bring down the costs of deploying hydrogen to address the critical challenge of decarbonizing the long haul, heavy-freight sector.”

CP’s Hydrogen Locomotive Program will demonstrate and evaluate the technical performance of hydrogen-powered locomotives and supporting fueling infrastructure in real-world operations. The program will generate critical industry knowledge and experience that will inform commercialization and future development.

For more information, see:

CP completes installation of solar energy farm

CP is proud to announce the completion of the solar energy farm installation at its Calgary headquarters. The project is one of the largest private solar farms in Alberta and is expected to generate more power than consumed annually by the main headquarters building.

James Clements, Senior Vice-President Strategic Planning and Technology Transformation officially inaugurated the project March 31.

“This project is a testament to the ongoing commitment CP has made to reduce the environmental footprint of our business operations,” said Clements. “Sustainable business practices are important in our fight against climate change and should take into consideration the ability to meet our needs, without jeopardizing the future of generations to come.”

The solar energy farm will generate up to five megawatts of electricity while avoiding an estimated 2,600 tonnes of carbon emissions a year, equal to taking approximately 570 cars off the road. The project will reduce CP’s total scope 2 emissions footprint. Scope 2 emissions are indirect greenhouse gases emitted from sources that are owned or controlled by an organization. For CP, scope 2 emissions are generated during the production of electricity purchased from local utilities.

Construction of the solar farm began in October 2020 with utilities being placed into the ground before winter weather settled in. The completed installation spans approximately five hectares and provides covered parking for up to 500 employee vehicles. Four electric car-charging stations with the ability to fully charge most electrical cars in up to five hours were also added to provide employees with quick and efficient access.

“We are excited about how this project positions CP as a sustainably driven company,” said Glen Wilson, Managing Director Environmental Risk, Regulatory and Environment. “CP is being increasingly recognized globally for its sustainability practices and the conversion of our headquarters building to solar power is a very strong and visible indication of our commitment to climate action."

How it works: (1) Solar panels installed at CP’s Calgary headquarters. These photovoltaic cells convert sunlight into direct current power. (2) Inverters are used to convert direct current power from the solar farm to alternating current. (3) The inverters feed electricity into CP’s electrical distribution system, which powers the main headquarters building. (4) The bi-directional meter keeps track of energy imported from the grid. (5) The campus remains connected to the utility grid. 

Read more in Climate Change.

CP and Maersk reach agreement that will benefit North American customers and the environment

In the fall of 2020, CP announced a partnership with Maersk Canada to build and operate a world-class transload and distribution facility in Vancouver, expanding on CP’s existing Vancouver Intermodal Facility. This partnership expands supply chain options for customers by providing expanded end-to-end transportation solutions.  

This multi-commodity transload facility offers customers access to freight transport that relies substantially on rail instead of truck—ultimately leading to lower costs and reducing greenhouse gas emissions. Transportation of freight by rail is 3-4 times more efficient and produces 75% less greenhouse gas emissions than trucking. As a single-unit train has the potential to keep 300 trucks off public roads, benefits to neighboring communities are expected to be realized through reduced traffic density on local roads. This partnership demonstrates that both companies are committed to enhancing sustainability within complex supply chains while providing effective and efficient intermodal solutions for customers.

Together with companies like Maersk, CP will continue to sustainably transform rail freight services in North America, benefitting our customers and the global economy.

Read more in Customer Experience.

CP releases Climate Strategy and ambitious emissions reduction targets

CP published its first comprehensive Climate Strategy in July 2021, charting a path to reduce greenhouse gas emissions, adapt CP operations to the physical risks of climate change and further position CP as a leader in the transportation sector’s transition to a low-carbon future.

“CP’s Climate Strategy is ambitious, which we feel appropriately reflects the urgency of the fight against climate change. We look forward to collaborating with government, industry and research partners to create and test the new solutions required to achieve our targets,” said Keith Creel, CP President and Chief Executive Officer. “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.”

Building on CP’s Climate Change Commitment announced last year, CP’s Climate Strategy outlines the company’s approach to drive innovative climate action and a measured response to emerging climate-related risks impacting the rail sector. The Climate Strategy outlines CP’s objectives across five strategic pillars:

  • Establishing a clear understanding of climate-related risk and opportunities
  • Reducing the company’s carbon footprint
  • Adapting operations to the physical risks of climate change
  • Integrating climate factors across the business
  • Engaging with stakeholders on climate action

To guide implementation of the Climate Strategy, CP has established two science-based emissions reduction targets that address 100 percent of CP’s Scope 1 and Scope 2 emissions, and more than half of Scope 3 emissions.

  • CP commits to reducing Scope 1, 2 and 3 GHG emissions intensity of its locomotives by in excess of 38 percent by 2030. Locomotive operations represent CP’s largest source of emissions.
  • To support decarbonization across all operations, CP also commits to reducing absolute Scope 1 and Scope 2 GHG emissions from non-locomotive operations by in excess of 27 percent by 2030.

These targets 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.

CP’s Climate Strategy, and supporting science-based 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. Through this Climate Strategy, CP is taking an industry-leading approach to climate change that addresses impacts to the company, stakeholders and the environment.

CP has already taken significant steps to reduce GHG emissions, including 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 pioneering hydrogen locomotive program, and is currently building a hydrogen-powered locomotive using fuel cells and batteries to power the locomotives’ electric traction motors. This initiative is important to generate critical industry knowledge and experience that will inform future development while supporting CP’s emissions reduction targets.

As part of CP’s overall Sustainably Driven strategy, the company 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.

Climate Action

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With a focus on operational efficiency and performance improvement, CP works diligently to optimize energy consumption and reduce costs. CP has made significant strides to increase fuel efficiency and reduce GHG emissions by investing in and improving locomotives, rolling stock, components and tracks; optimizing train configuration; using software for route and speed optimization and automation and improving fuel conservation through operational practices. As we continue our focus on fuel-efficiency efforts in the near term, we are actively supporting the advancement of alternative fuels and emerging technologies for the rail sector. As new carbon reduction solutions become available, we will work closely with our rail sector peers, manufacturers and industry associations to validate performance prior to deploying across our operations.

Freight by Rail — A Low Carbon Solution1  

[1] Freight Rail & Preserving the Environment, published by the Association of American Railroads in April 2021, How railways can be part of Canada’s climate change solution, published by the Railway Association of Canada in July 2016.

Since 1990, we have improved our fuel efficiency by 44%, avoiding over 33 million metric tonnes of carbon.

CP Locomotive Fuel Efficiency2


CP's locomotive fuel efficiency has improved 43% in the past 28 years

[2] Gross ton-mile (GTM) is the movement of one ton of train weight per mile. GTMs are calculated by multiplying total train weight by the distance the train moved. Total train weight comprises the weight of the freight cars, their contents and any inactive locomotives.

 

TRIP OPTIMIZER

First implemented in 2009, Trip Optimizer (TO) technology has contributed to improving locomotive fuel efficiency at CP. This technology enables CP’s train crews to create and execute trip-specific plans that conserve fuel and optimize train energy consumption over a given section of track. In many ways, TO is a sophisticated locomotive cruise control optimized for fuel economy, taking into account factors such as train length, weight and track grade to determine the optimal speed profile for a given segment of track.

Fuel Trip Optimizer

Our train crews use TO technology to execute fuel-efficient, trip-specific plans and conserve locomotive fuel.

CP enhanced TO systems in 2019 to include pacing technology to drive deeper fuel efficiency and system fluidity improvements. Pacing technology accounts for a specific train’s location in relation to other trains operating within the same area of the network. The system detects opportunities to reduce train speed in certain areas along the right-of-way to minimize wait times at stations, thus facilitating continued progression at the optimum speed to deliver on time, in the most energy- and fuel-efficient manner possible.

CP has invested approximately $12 million in equipping 432 high-horsepower locomotives with TO technology over the past six years. We expect to add this technology to an additional 30 locomotives in 2021 and to continue implementation across 50 percent of our high-horsepower locomotive fleet by the end of 2022.

Trip Optimizer technology helped CP save 6.7M litres of locomotive fuel and avoided 19,000 tonnes of GHG emissions in 2020.

LOCOMOTIVE MODERNIZATION

Starting in 2012 and continuing through 2022, CP is upgrading 450 locomotives with new technology, including new operating cabins, overhauled in-kind or upgraded diesel engines and improved traction systems. A portion of the high-horsepower locomotives are equipped with TO and distributed power systems, both of which are EPA-certified fuel and emissions reduction technologies. Upgrades are expected to improve fuel economy by a minimum of 2.7 percent. 

Since 2012, CP has invested $637 million to modernize the locomotive fleet. By the end of 2020, 386 locomotives have been updated through the Locomotive Modernization program. This represents more than 46 percent of CP’s active line-haul fleet, having a direct and positive impact on CP’s fuel efficiency and corresponding GHG and air pollutant emissions. Our performance outlined in the graphics below illustrates our steadfast efforts to achieve maximum diesel fuel efficiency.

CP Locomotive GHG Intensity2


ALTERNATIVE FUELS

Driven by a quest to lower emissions and improve fuel efficiency, our cross-functional Fuel Conservation team continues to explore technologies and solutions to improve the efficiency and carbon intensity of locomotive fuels and alternative energy sources. CP has conducted technology trials on a range of fuel sources, including diesel fuels with varying sulphur profiles and other emissions-reducing qualities, plant-based diesel (biodiesel), liquefied natural gas systems, compressed natural gas, and battery-hybrid technologies. CP is currently undertaking a hydrogen-powered locomotive pilot project to evaluate the use of zero-emissions technology in line-haul freight locomotives.

Our procurement group engages with fuel suppliers, equipment manufacturers, industry associations and regulatory agencies to explore advancements in the use of alternative and next-generation fuels in the rail sector. As required by regulation, CP currently uses 2 percent renewable fuel in our Canadian operations on an annual basis. In 2020, we consumed approximately 15 million litres of biodiesel in our locomotive operations.

CP continues to work collaboratively with industry experts, railway associations, government agencies and equipment manufacturers in the evaluation of renewable fuel products and opportunities.


CP expands Hydrogen Locomotive Program with ERA grant

CP is expanding the scope of its pioneering Hydrogen Locomotive Program with a $15 million grant from Emissions Reduction Alberta (ERA). The grant enables CP to increase the number of hydrogen locomotive conversions in the project from one to three and add hydrogen production and fueling facilities. The program will create a global centre of excellence in hydrogen and freight rail systems in Alberta.

 

FACILITIES UPGRADES

We are committed to optimizing our energy footprint, reducing our Scope 2 emissions and lowering operating expenses across the business, including our operating facilities, buildings and support networks. CP’s Real Estate and Facilities team has implemented several energy-saving initiatives, including switching from older steam-heating systems to high-efficiency heating, ventilation and air conditioning (HVAC) systems in several larger yards, replacing aging lamps with light-emitting diode (LED) lighting systems, decommissioning unneeded facilities and installing high-efficiency mechanical and lighting systems in all-new construction and facility retrofits. Recently, we have focused on optimizing our yard air compressor systems and reducing energy waste by replacing older compressors with more energy-efficient models.

Our solar energy farm at our Calgary headquarters is one of the largest private solar farms in Alberta. The installation, completed in 2021, spans five hectares and provides employees with four electric car-charging stations and covered parking for up to 500 vehicles. The solar energy farm has the capacity to generate up to five megawatts of electricity, which is expected to generate more power than consumed annually by CP’s main headquarters building.

The installation of CP’s first solar farm will generate five megawatts of electricity. This avoids an estimated 2,600 tons of carbon emissions annually, or the equivalent of taking 570 cars off the road.

Science-Based Targets

In 2021, we established science-based emissions reduction targets. These targets were approved by the Science Based Targets initiative (SBTi), and together, address 100% of our Scope 1 and Scope 2 emissions and more than half of our Scope 3 emissions. We continue to pursue technology and other means that may deliver more significant decarbonization in the future, and to work with our supply chain to support further reduction of our Scope 3 emissions.

To meet our science-based target for 2030 and continue further decarbonization towards 2050, CP will evaluate a wide variety of potential levers for GHG emissions reductions. These levers will include both commercially ready and emerging solutions. We recognize that new business approaches will be needed, including systematic ways to:

  • identify potential carbon-reduction levers
  • rigorously assess new levers in terms of carbon-reduction potential, feasibility for the rail sector and costs to CP
  • conduct bench-scale and pilot testing
  • successfully deploy promising alternative fuels and propulsion methods
  • engage and collaborate to progress this work

In pursuing these goals, we will foster an enterprise-wide innovation mindset. Creative thinking and collaborative problem solving will be needed to lower—and potentially eliminate—GHG emissions associated with the operation of CP's assets, facilities and rolling stock. Learn more about how we are using innovation to drive efficiencies, improve resiliency and operate safely in Asset & Rail Network Resiliency.

Business Integration & Engagement 

BUSINESS INTEGRATION

CP recognizes the need for incorporating climate change risks and opportunities into business planning, and we are enhancing our governance to drive effective management of our climate change commitments and actions. Our business integration plans are aligned with the practices recommended by the TCFD.

The implementation of CP’s Climate Strategy will require leadership and coordination to cascade commitments across our business and value chain. Successful execution requires a shared understanding of the risks and opportunities of climate change and the Company's commitment to climate action. Ensuring the integration of climate factors into planning and decision-making processes across our business will require a strong change management process built upon ongoing engagement, training, and dialogue with all CP employees and functional groups.

ENGAGEMENT

Engagement with internal and external stakeholders through education and awareness, partnerships, policy development and climate-related disclosure is a key component of our Climate Strategy. Through these processes, CP will work to fully explore and understand the climate-related impacts facing our business, build internal capacity for climate action, enhance the resiliency of our network and remain connected with emerging technology solutions that support our emissions reduction objectives. We recognize that sharing experiences and insights with external stakeholders will add value to CP’s climate programs, supporting collaboration and learning from different perspectives.

Building internal awareness of climate risks and opportunities will promote a shared understanding of roles, challenges and the underlying value in executing CP’s Climate Strategy. External to CP, dialogue will focus on opportunities to align CP’s climate ambitions with our customers’ climate objectives. Ongoing engagement with investors and communities can demonstrate CP's leadership position as we stay informed of evolving expectations.

CP is well-positioned to pursue partnerships with industry associations, other railways, equipment manufacturers, communities and stakeholders. Strategic partnerships support the industry-wide collaboration required to drive innovation, advance and improve the accessibility of emerging technology and take action to decarbonize the rail sector. CP is currently working with the Railway Association of Canada (RAC), the Association of American Railroads (AAR) and Transport Canada to promote climate resilience in the rail sector. As a leader in this field, we are open to new pathways for partnerships, including existing and prospective suppliers, academia, railway peers and other institutions.

Globally, climate-related legislation and regulations are emerging in response to growing scientific evidence and societal awareness of climate change. CP frequently engages with others in our industry on regulatory issues that impact our business and the rail transportation sector in Canada and the U.S. These strategic engagements support our Climate Strategy, including topics related to cap-and-trade programs, carbon taxes, fuel efficiency standards, renewable fuel standards and emissions reporting programs.

CP also routinely connects with regulatory agencies, equipment manufacturers and other railways to discuss emerging issues and opportunities related to air emissions from our locomotive fleet. For example, CP has members on both the AAR’s Locomotive Committee and the Steering Committee for the Locomotive Emissions Monitoring program, a joint initiative of the RAC and Transport Canada. The goal of these groups is to reduce the railway industry’s air and GHG emissions. These collaborative efforts have resulted in significant improvements in locomotive fuel economy while driving industry-wide emissions reductions. We carefully maintain and regularly test all locomotives to meet the emissions regulations set by Environment and Climate Change Canada and the U.S. Environmental Protection Agency to allow for fluid movement across the Canada-U.S. border. CP’s train crews receive frequent training on operating practices and technologies designed to improve fuel economy.

Our Performance

We track and report on our Sustainability performance annually. View our Climate Change data here.


OPERATIONAL EXCELLENCE TOPICS
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