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2020 Building America Report a Report to Our Stakeholders on Union Pacific’S Environmental, Social and Governance Initiatives and Achievements

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2020 Building America Report a Report to Our Stakeholders on Union Pacific’S Environmental, Social and Governance Initiatives and Achievements Steven Boyd Christian Deneumostier John Richard Jessica Marsa Aris Garcia Jr Berkeley, IL Omaha, NE System Gang Omaha, NE Menlo Park, CA Brittany Miller Matthew Havard Chuck Wullschleger Joe Downs Thomas Hottenrott Omaha, NE De Soto, MO System Gang Omaha, NE Dupo, IL Richard Estrada Joshy Madathil Jimmy Thompson Jenn Dellacqua Demarcus Thompson System Gang Omaha, NE Cheyenne, WY Omaha, NE Crystal Lake, IL Adrienne Jensen Jose Guzman Atosha Coleman Bryan Prince Yolanda Delgado Omaha, NE Omaha, NE Omaha, NE Fort Worth, TX Omaha, NE Henry Ward III Sharron Jourdan Booker Williams Marypat Dennis Jon Ruda Kansas City, MO Roseville, CA Fort Worth, TX Omaha, NE Omaha, NE 2020 Building America Report A report to our stakeholders on Union Pacific’s environmental, social and governance initiatives and achievements. 1 About the Report Union Pacific’s vision of Building America means we connect the nation’s businesses and communities to each other and the world by providing safe, reliable and efficient supply chain solutions. In doing so, we strive to serve our customers, enhance shareholder value, invest in our communities and provide promising careers, while operating in an ethical manner. Together, these actions allow Union Pacific to build a more sustainable future. This report details progress in our four areas of concentration related to environmental, social, and governance issues: investing in our workforce, driving sustainable solutions, championing environmental stewardship and strengthening our communities. This report also summarizes our 2020 financial performance and, new this year, includes a Facts and Figures section. We used the Global Reporting Initiative’s global sustainability reporting standards as a framework to report our most material social responsibility issues, and are reporting our GRI Standards Index data for the first time. This publication focuses on initiatives and accomplishments from the 2020 calendar year and includes 2020 data, unless otherwise noted. Information also is available at up.com. UP 5064 in Dalles, Oregon. 2 Table of Contents LETTER TO STAKEHOLDERS 4 CHAMPIONING ENVIRONMENTAL STEWARDSHIP 63 Our Approach to Environmental Management 64 OUR COMPANY 5 Climate Change and Environmental Risks 66 Fast Facts 6 Reducing Emissions 69 COVID-19 Impact and Response 7 Managing Fuel and Locomotives 70 Corporate Strategy 11 Incorporating Technology 70 Operations 12 Energy Conservation 72 Financial Performance 14 Waste Management 73 Cybersecurity 15 Water Management 74 Risk Oversight Approach 15 Biodiversity and Land Preservation 75 Board of Directors 16 What’s Ahead 75 ESG Strategy 17 Material Issues 20 STRENGTHENING OUR COMMUNITIES 77 Sustainable Development Goals 22 Public Safety 78 Business and Industry Affiliations 25 Safely Handling Hazardous Materials 80 Key Performance Indicators 26 Safety Through Security: Special Agents 82 Stakeholder Engagement 27 Generating Opportunity Through our Supply Chain 83 Key Awards and Recognition 28 Creating Local Economic Opportunity 84 Celebrating 150 Years on the New York Stock Exchange 29 The Community Ties Giving Program 85 What’s Ahead 29 Our Impact 88 Key Partnerships 89 INVESTING IN OUR WORKFORCE 31 Regional Partnerships 91 Embracing Employee Needs 32 Making a Difference in Our Communities 95 Building Employee Engagement 33 What’s Ahead 98 Providing Meaningful Benefits 33 Labor Agreements 34 FACTS AND FIGURES 99 Diversity, Equity and Inclusion 35 Overview 100 Embedding an Ethical Approach 41 Markets 108 Keeping Employees Safe 42 Operations 118 Developing Employees 43 Financials 120 Continuous Improvement the UP Way 46 GRI STANDARDS INDEX 134 Keeping Employees Healthy and Well 47 What’s Ahead 49 APPENDIX 140 DRIVING SUSTAINABLE SOLUTIONS 51 What We Carry 52 Responding to Customer Needs 54 Leveraging Technology to Support Customers 55 Investing in Infrastructure 56 Rail Safety Maintenance 58 Innovation at Work 59 Enabling Sustainable Economic Development 61 Connecting People, Markets and Economies 62 What’s Ahead 62 3 Our Company Investing in Our Workforce Driving Sustainable Solutions Championing Environmental Stewardship Strengthening Our Communities Facts & Figures GRI Standards Index Appendix Letter to Stakeholders The year 2020 will be remembered as one of the most challenging in this country’s history I’m proud of our employees who once again proved they have what it takes to face global crises now and into the future The women and men of Union Pacific have demonstrated their resiliency time and time again over the past 158 years, but no one could have anticipated the COVID-19 pandemic and its impacts on every aspect of our lives As an essential part of America’s infrastructure, Union Pacific played a critical role supporting public health and safety, and delivering materials to power hospitals, stock grocery store shelves, purify water, make medicine and feed livestock Our team responded to evolving customer needs, while also vigorously working to meet the objectives of Precision Scheduled Railroading Freight cars moved across our network faster and more efficiently, and despite steep fluctuations in demand, our consistent trip plan compliance for manifest, autos and intermodal meant we delivered on our promise to customers Our commitment to environmental, social and governance (ESG) initiatives didn’t waiver during the pandemic We realigned our ESG work, creating a more comprehensive strategy called Building a Sustainable Future 2030 This report is arranged to align to the strategy’s four areas of concentration: • Investing in our Workforce • Championing Environmental Stewardship, and • Driving Sustainable Solutions • Strengthening our Communities This approach addresses the evolving needs of our stakeholder groups over the next decade, serving as a roadmap to address our most material ESG risks while building on a foundation of safety – our No 1 priority The importance of ESG can be seen in our reaction to climate change We’re committing to reduce absolute scope 1 and 2 GHG emissions from our operations 26% by 2030 against a 2018 baseline These targets were approved by the Science Based Targets Initiative in early 2021 and put our company in an even greater strategic position as we work to support global climate change goals outlined in the Paris Agreement Our approach to developing and implementing new technology will help us further reduce our carbon footprint, as will maintaining equipment and training employees in environmentally responsible behaviors This requires long-term planning and commitment; however, we’re making short-term plans, too We continue to reduce the size of our locomotive fleet as we operate longer trains, and anticipate further opportunities to grow train size Our Energy Management Systems on locomotives help us identify opportunities to save fuel, and we’re using automatic shutdowns for locomotives, rather than leaving them idle in yards We’ve tasked senior leaders in Engineering, Mechanical and Operating to identify more ways -- both near- and long-term – to drive meaningful change Our efforts to reduce GHG emissions directly align with goal No 11 of the United Nation’s Sustainable Development Goals (SDGs) It’s one of the seven SDGs Union Pacific identified as areas where we can make a difference This report details our progress, and I’m proud of the impact we’re having, especially on goals addressing Gender Equality and Reduced Inequalities Several events in 2020 brought racial injustice and inequality to the forefront I am proud of the work Union Pacific is doing to unite itself and the communities where we operate Our headquarters building was damaged during protests surrounding George Floyd’s death Instead of merely boarding up our windows, we covered the broken glass with artwork that bore a heartfelt message: We Are One It’s a powerful statement to the community about where we stand We’re also holding listening sessions that include minority employees and external speakers to better understand their experiences and identify areas where we can improve as a company and as leaders These are passionate conversations, and we are stronger because of them Though we’re all still learning, healing and growing, the impacts of the past year will be felt in our communities – and our world – for years to come With 2020 in the rearview mirror, we as a company are approaching the future with a new business strategy built on these four words: Serve, Grow, Win, Together That combination, along with the best employees in the industry, position us to keep Building America for generations to come Lance Fritz – Chairman, President and CEO 4 Our Company Union Pacific Railroad Company is the principal operating company of Union Pacific Corporation (NYSE: UNP). We are one of America’s most recognized companies, and one of only a few created by an act of Congress and signed into being by a sitting president. We have a heritage of building and uniting the country, and our work today propels the nation forward, connecting businesses to communities around the world. Our rail network provides logistics solutions and connects 23 states in the western two-thirds of the nation, making us a critical link in the global supply chain. Over the last 10 years, from 2011 to 2020, Union Pacific invested nearly $35 billion in our network and operations, supporting America’s transportation infrastructure and enabling economic growth. From left, Engineering’s Hal Chatwin, track inspector, and Eric Chouquer, section foreman. 6 Fast Facts 20 Material Issues 7 COVID-19
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