2019 Environmental, Social, and Governance Report Table of Contents

2 12 32 68 94 120 A Message From our ESG at CSX Safety Communities 2019 ESG TCFD Index President and CEO Performance Data 6 16 46 80 108 124 About CSX The Future of Freight Environment Governance GRI Standards Index Appendix 10 20 56 88 118 Awards and Customer Experience People ESG Fundamentals SASB Index Accomplishments chain. We are on a mission to Plan Performance Tool, CSX created supply chain challenges demonstrate that the future customers can now see detailed across the global economy. CSX of freight rail is delivering safe delivery performance data on has been privileged to ensure efficient, reliable, and sustainable every container and trailer they timely delivery of essential goods A Message From our President service to all of our customers. ship. Also, by the end of this year, and keep America’s economy autonomous track assessment moving. Now more than ever, our 2019: A Milestone Year cars will conduct regular track ability to provide safe, reliable, and and Chief Executive Officer, While transformation initiatives inspections on more than half of efficient rail service will be essential continue, the results of our hard our core mainline tracks. These to our nation’s economic vitality. work truly began to show this cars and their data collection James M. Foote past year. In 2019, CSX set a capabilities have already been As we navigate through the crisis, new company safety record instrumental in reducing accidents my top priority is our people. Over for the fewest Federal Railroad and we are optimistic that we will the past several months, we have Administration (FRA) reportable see even greater safety gains as implemented rigorous measures personal injuries and had the we expand their use. to protect their health and safety lowest injury rate of all Class and that of their families. As 2020 I railroads. We also set a new This past year, we celebrated the continues to unfold with all of CSX’s goal is to be the best-run railroad company record for fewest FRA– first anniversary of CSX Pride its unknowns, safeguarding our reportable train accidents. in Service, our company-wide employees is foremost in our in North America. Fundamental to that commitment to honor and serve decision-making. We delivered superior customer those who serve our country and goal is strong environmental, social, service, achieving faster transit our communities — our nation’s I want to take this moment to times, greater schedule reliability, veterans, military, and first extend my gratitude to all of the and governance (ESG) performance. and transparency of network responders. While Pride in Service CSX employees who are answering performance. is a long-term commitment, the call to duty with unwavering our initial goal was to positively dedication. This remarkable group of In addition to achieving record fuel impact more than 100,000 heroes railroaders does the essential jobs, efficiency, we exceeded our 2020 and family members by the end day in and day out, that need to be GHG emissions reduction target of 2020. With the enthusiastic done to keep a great freight railroad As a railroad, we have the opportunity and the environmental performance, but also within each of ahead of schedule. Further, CSX involvement of CSX employees, running at peak performance. It is imperative to help decrease transportation-related our ESG priorities, including keeping our employees became the first railroad in the U.S. by the end of 2019 we had already their dedication and commitment greenhouse gas (GHG) emissions. Trains are on and communities safe; delivering excellent customer to align with the Science Based reached 85,000 individuals. that gets critical supplies where average three to four times more fuel efficient than service; building a diverse, world-class workforce; and Targets initiative, setting a goal to they need to go during these trucks – producing up to 75% fewer GHG emissions. upholding high ethical standards. reduce GHG emissions intensity by This report discusses these difficult times. Thank you for your Not only is this an enormous environmental advantage 37.3% by 2030, using 2014 as our achievements and other service, thank you for your grit and for freight rail, it is a significant opportunity for The Future of Freight baseline. milestones, as well as the perseverance, thank you for your customers looking to reduce their own carbon Since 2017, CSX has undergone a significant opportunities still ahead. We are teamwork. I am honored to be footprints. transformation. We revolutionized our operating model, Smart use of data and technology proud of the progress we have part of this resilient group. Looking wholly transforming the company’s financial and ESG is a key pillar of the transformation. made and are ready to undertake ahead, we are ready to embark on At CSX, we take this advantage as a baseline. We are profile. The transformation has allowed us to achieve Upgraded and expanded use of the challenges that remain. the next phase of sustainable growth constantly searching for and applying new ways to new levels of reliability, customer service, safety, and data and technology across our and to make CSX the sustainable achieve greater environmental savings. In 2019, CSX environmental efficiency. It has allowed CSX to be business have helped us advance A Thank You transportation mode of choice. While became the first U.S. Class I railroad to operate at a more adaptable and more nimble, qualities that are a range of business priorities – Foremost among the challenges the path ahead may be challenging, fuel efficiency rate of less than one gallon of fuel per ever more critical today. including increasing efficiency, ahead will be continuing to the people of CSX are resolved to thousand gross ton miles for a quarter. optimizing workplace safety, support our nation’s recovery from continue our momentum as we Our company’s remarkable transformation over the enhancing customer service, and unprecedented disruption. The transform the future of rail freight We are proud of this achievement, but we press past three years has shown us how freight rail can achieving environmental gains. coronavirus pandemic, in addition transportation. forward with urgency to improve further, not only on provide significant benefits to the country’s supply For example, through our Trip to upending our daily lives, has

2 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 3 A Message From our President and CEO

Responding to the For communities: We are working COVID-19 Crisis closely with our Pride in Service As the COVID-19 pandemic nonprofit partners to ensure that continues to unfold, CSX is military families, veterans, and first implementing a rigorous plan responders still receive the support to manage the situation and they need – even and especially do right by our stakeholders. A in the midst of social distancing brief overview of our activities is restrictions and closures. We have below. For more information, visit also joined with Pride in Service CSX’s coronavirus prevention and partners Operation Gratitude and response strategy page. the First Responders Children’s Foundation to establish new For employees: CSX issued coalitions and funds to provide a Coronavirus Prevention and special support to frontline Response Policy and implemented responders in the coronavirus measures to safeguard employees’ crisis, including hospital workers, health, such as deploying paramedics, emergency medical automation technologies where technicians, and 911 dispatchers. possible to help our employees maintain physical distancing while ensuring our network operates as safely and efficiently as possible. We have also implemented remote James M. Foote work arrangements for employees President and Chief Executive Officer whose job functions permit.

For customers: CSX has implemented protective protocols designed to ensure our rail system continues to perform at a high level and is ready to meet the needs of our customers as the situation unfolds. We remain committed to providing efficient and reliable rail service to keep supply chains fluid as the nation responds to this challenge. In addition, we remain steadfast in our commitment to safely moving our customers’ freight, while working with them on any supply chain adjustments needed during this time. In Q1 of 2020, even in the midst of the pandemic, our levels of service with regard to efficiency and on- time delivery were the best they have ever been.

4 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 5 About CSX

Syracuse CSX, a Class I railroad, is one of the nation’s leading transportation Buffalo Selkirk suppliers. The company’s rail and intermodal businesses provide Detroit rail-based transportation services including traditional rail service Cleveland Chicago Toledo and the transport of intermodal containers and trailers. Willard Baltimore Columbus Cumberland

The CSX transportation network encompasses As a pioneer in the most energy-efficient form of land- Avon approximately 20,000 route miles of track in 23 states, based freight transportation, CSX is dedicated to ESG Cincinnati the District of Columbia, and the Canadian provinces and innovation in the freight industry. As the demand Richmond of Ontario and Quebec. for reliable, efficient freight services grows and Louisville Russell technology advances, we intend to take a leadership We move a broad portfolio of products across the role in demonstrating that rail transportation has a country in a way that reduces our impact on the growing part to play in North American supply chains Rocky Mount environment, takes traffic off congested roads, and in the decades to come. minimizes fuel consumption and transportation costs. Nashville We provide key freight services across an array of Hamlet markets, including energy, industrial, construction, Our transportation network serves Florence agricultural, and consumer products. some of the largest population For nearly 200 years, CSX has played a critical role in centers in the nation. Nearly two- Atlanta Birmingham Charleston North America’s economic expansion and industrial thirds of Americans live within development. CSX’s service territory. Montgomery Savannah Waycross Jacksonville New Orleans

Tampa Major Terminal CSX Rail Service CSX Operating Agreement

6 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 7 About CSX

Our Vision To be the best-run railroad in 193 North America 20,908 Years in operation Our Business Our network connects every major metropolitan area in the Employees eastern United States, more than More than 230 short line railroads, and more than 70 port terminals along the Atlantic and Gulf coasts, the 3,500 Mississippi River, the Great Lakes, and the St. Lawrence Seaway. 20,000 1,848 locomotives Route-mile rail Average trains network per day

More than 3.5M carloads and 2.7M intermodal units shipped in 2019

Our Revenue Mix

In 2019, CSX generated $11.9 billion in revenue through three primary 66% lines of business: merchandise, coal, and intermodal. Merchandise

12% 8% 21% 11% 5% 6% 4% 18% 15% Agricultural and Forest Products Chemicals Automotive Minerals Metals and Fertilizers Coal Intermodal Food Equipment

8 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 9 About CSX

Awards and Accomplishments 2019 Dow Jones Women’s Forum of New York — Inbound Logistics — 75 Green U.S. Veterans Magazine – Top Progressive Railroading – Sustainability Index Corporate Champion for Board Supply Chain Partners Veteran-Friendly Company 2019 Rising Stars In 2019, CSX was recognized Diversity with several high-profile awards, CSX received this top sustainability CSX earned a spot on the list of The U.S. Veterans Magazine James Schwichtenberg, chief rankings, and other honors for our honor for the ninth consecutive CSX received this top recognition 75 Green Supply Chain Partners identified CSX as a Top Veteran- safety officer at CSX, was selected sustainable business practices. year for high performance in for our commitment to board selected by the editors of Inbound Friendly Company in 2019 for our as one of 25 rising stars within the environmental management, diversity and inclusion, ensuring Logistics in its June 2019 issue efforts in welcoming veterans to North American railroad industry. corporate governance, supply a variety of voices have decision- recognizing companies that are our company to join the 3,700 chain management, and corporate making power in our business. committed to sustainable, eco- veterans, active-duty military, and citizenship and philanthropy. friendly supply chain services. first responders who currently work at CSX.

World Finance Magazine — CDP — Leadership Status International Cargo Handling Association of American Association of American 2019 Most Sustainable Company Coordination Association Railroads — 2019 John Railroads — 2019 North For seven consecutive years, CSX in the Logistics Industry (ICHCA) — Safety Award H. Chafee Environmental American Environmental has been awarded leadership Excellence Award Employee Excellence Award CSX was selected by World status by CDP, an independent, A system developed by CSX and Finance magazine as the winner global non-governmental two technology partners for semi- Gary Van Tassel, director of Brian M. Zacker, regional in the logistics category for our organization that scores 8,400 automated crane operations at operations planning, received this manager of environmental field commitment to ESG policies in all companies on their efforts to the Winter Haven (Fla.) Intermodal award for leadership in innovating services, received this award aspects of our operations. address environmental issues. Terminal received a prestigious terminal modifications to improve for establishing a materials CSX is the only Class I railroad in safety award from the ICHCA energy and network efficiency collection and recycling program, the United States to consistently for achieving significant safety and reduce CSX’s environmental improving hazardous waste receive this highest CDP ranking. improvements. impacts. processes, and standardizing risk- reduction processes for hurricane preparation and recovery.

Disability: IN — Best Place to ISS ESG — Prime Company Engage for Good Halo Awards – Insight Success – The Most Work for Disability Inclusion and U.S. Transport and Logistics Gold Employee Engagement Admired Women Leaders in Industry Leader Business CSX was named a “Best Place CSX was awarded the Gold level to Work for Disability Inclusion” CSX achieved “prime” status for the Employee Engagement CSX’s Kathleen Brandt, senior by Disability:IN and American by leading rater ISS ESG for our category for the meaningful work vice president of technology and Association of People with strong ESG performance across Pride in Service has been doing to chief information officer, was one Disabilities, scoring 100% on the our operations. engage employees through cause- of ten women selected by Insight 2019 Disability Equality Index. focused initiatives. Success as part of its 2019 Most Admired Women Leaders in Business list.

10 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 11 ESG at CSX

Our leadership in the freight rail industry and our aspiration to be the best-run railroad in North America rely on our ability to conduct business in a sustainable way that does right by our customers, employees, communities, and shareholders.

OUR APPROACH We have an unwavering commitment to the safety of “Looking ahead, we are ready our employees and the general public; the service of to embark on the next phase our customers; the disciplined utilization of assets; the support of our people and the communities where we of sustainable growth by operate; and the protection of our natural environment. making CSX rail the ground The Governance Committee, whose members and transportation mode of choice. chair are elected annually by the Board, oversees the By providing best-in-class development and execution of CSX’s ESG strategy and reporting. Additionally, the Audit Committee of service and unprecedented the Board has responsibility for risk oversight and reliability to our customers, evaluation of climate-related issues, including risks associated with energy and environmental policy. we’re able to convert freight On a daily basis, ESG is collaboratively managed by from the highway to rail and the respective operational departments. Operational leaders are responsible for measuring and monitoring significantly reduce carbon progress against key performance indicators and emissions.” for reviewing and applying stakeholder feedback and insights. James M. Foote President and Chief Executive Officer

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“Ensuring that our company is a responsible corporate citizen extends far beyond one department or function. It’s embedded in our corporate culture, which recognizes that good governance is more than a structure of policies and best practices. It means constantly asking what’s in the long-term best interest of our stakeholders, including employees, customers, shareholders, government agencies, and communities we serve. Understanding and addressing those interests is consistent with and supports sustainable growth.”

Nathan D. Goldman Executive Vice President, Chief Legal Officer and Corporate Secretary

Priority Issues

As determined by the 2020 materiality assessment: OUR ESG PRIORITIES ABOUT THIS REPORT Reporting Initiative (GRI) indices for the detailed overview Standards: Core option and of disclosures. Please also › Delivering excellent customer › Energy and fuel efficiency In early 2020, we refreshed CSX’s 2019 ESG report shares contains indicators from the reference our latest CDP climate service › Talent management our materiality assessment, information on the environmental, Sustainability Accounting change submission for additional › Ethical business conduct › Physical security engaging both internal and social, and governance topics Standards Board (SASB) climate disclosures. › Employee and community › Business model disruption external stakeholders to identify that CSX and our stakeholders framework. We have also aligned safety › Governance and risk the issues most material to CSX. view as the most significant to our our climate-related disclosures Thank you for your interest in › Hazard management and management The outcome of this assessment business. The report documents with the Task Force on Climate- CSX’s 2019 ESG performance. emergency preparedness informed the content and structure CSX’s activities and impact related Financial Disclosures The purpose of this report is › Employee health and well- For more details about our of the 2019 ESG Report, and it in calendar year 2019, unless (TCFD). to support a dialogue with our being latest materiality assessment, will guide the evolution of our ESG otherwise noted. stakeholders. Please email us your › Cyber and information security including the full materiality strategy and approach over the Please reference the relevant thoughts, questions, and feedback › Compliance with legislation matrix, please see the ESG coming years. The report is prepared in GRI Standards, SASB, and TCFD at [email protected]. and regulations Fundamentals section. accordance with the Global

14 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 15 HOW WE’VE STREAMLINED THE CSX NETWORK

A major element of our transformation has been the integration The Future of Freight of the operations of CSX’s many predecessor railroads. As these railroads merged to form CSX’s current footprint, often the operations of each heritage railroad remained different and distinct. Each predecessor railroad was aligned with one of 11 divisions, typically maintained its own large processing hump yard, and In 2017, CSX embarked on a transformative journey operated with a high degree of autonomy. Thus, train operations were often based on inefficient schedules, as cars would often to revolutionize our operating model to become the safest, be directed to multiple hump yards as they traversed through divisions. This typically took the car out of its most direct route, most efficient, best-run railroad in North America, offering added unnecessary steps, increased dwell, added excess costs, unparalleled service and environmental benefits and degraded service reliability and transit times. The CSX Operating team consolidated these divisions and to customers. removed the anachronistic barriers to network planning. Operations were restructured around just three regions, and 7 of the 12 asset– intensive hump yards were closed. The team also centralized dispatching to a single location and redesigned the network plan to create hourly trip plans for each car on the railroad. The new plan focuses on how each car can be moved along the most direct The goal of CSX’s operating model is to improve to provide end-to-end transportation solutions with possible route with as few touches as possible. These changes transit times and enhance reliability, resulting in more industry leading environmental benefits, enabling resulted in a reduction of more than two days in average transit consistent freight flows, a more sustainable use of customers to achieve both an increase in efficiency and time and a significantly more fluid and reliable network. resources across the CSX network, a superior service a decrease in their environmental footprint. product for our customers, and a safe and rewarding work environment for CSX employees.

At its core, the CSX model is about maximizing efficiencies and identifying and eliminating waste. Every “In addition to decreasing transit extra mile and every extra asset that does not contribute times and increasing reliability, to the quality and consistency of our transportation product is removed from the system. the CSX operating model drives greater efficiency and improved Three years since our journey began, this operational transformation has made CSX a nimbler, more adaptive, safety. It enables us to reduce and more sustainable company that can handle growth waste and move more freight and change quickly and efficiently. As a result of the transformation, we now operate far more cohesively, per gallon of fuel.” without competing internal priorities. We are powered by technology and innovation and driven by a safety- first and service-oriented mindset – always grounded in Jamie Boychuk data insights and proven best practices. Executive Vice President of Operations Customers are the primary beneficiaries of these changes. CSX can now uniquely partner with customers

16 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 17 The Future of Freight

Our Guiding Principles Transformation ESG Performance Highlights

Our transformed operating model is rooted in five guiding principles: Improve Customer Service, Progress from 2016-2019* Operate Safely, Value and Develop Employees, Optimize Asset Utilization, and Control Costs. 15% 18% 23%

Improve Customer Service: Operate Safely: Value and Develop Employees: Reduction in FRA personal Reduction in FRA train Less terminal car dwell time Do what we say we are going Maintain 100% compliance Act with integrity, make sure injury rate accident rate to do. Know your customer and with safety and operating rules employees know what is understand how you can drive 100% of the time to protect expected of them and reward them value. Proactively communicate our employees, our customers’ when they do the right things, and at all times including when we freight, and the communities in always strive to get better. gallon/ cannot meet our commitments. which we operate. % % 1.0 kGTM 7.1 6.5

First U.S. Class I railroad Better fuel efficiency Less GHG emissions to cross this fuel efficiency $ threshold

Optimize Asset Utilization: Control Costs: Do more with less by Eliminate unnecessary “CSX is proving that sustainable maximizing the value of our steps that add complexity transportation has many facets that fit assets through increased transit and costs. speed and lower dwell. *Safety statistics are estimated and together to benefit all of our stakeholders. continue to be updated as actuals settle. Operating efficiency supports improved service, which drives sustainable growth and ultimately provides the financial ADVANCING ESG THROUGH › Achieve faster transit times, carbon footprint as well as our transparency, efficiency, and TRANSFORMATION greater schedule reliability, customers’ footprints reliability that was not previously strength to further grow the business and increased transparency of possible. Our operational transformation benefit communities through the safety network performance, and enabled us to drive improvements more consistent freight flows, WHAT’S AHEAD With continued investments in and environmental advantages of rail.” across the business, including resulting in a superior service for rail assets, accident prevention, our ESG performance. Most The next phase of CSX’s customers environmental technology, fuel significantly, we have been able to: transformation focuses on capturing Kevin Boone efficiency, and more, we continue the full value of the improved Executive Vice President and › Reduce fuel usage and emissions to look for opportunities to better › Improve safety performance service by generating profitable and Chief Financial Officer by converting more road miles serve our customers and employees across the network through sustainable growth. Increased fluidity to rail miles and realizing higher and to make rail the sustainable enhanced safety training, and efficiencies across the network utilization of assets across transportation mode of choice. processes, and technology allow us to provide a level of service, the network – reducing CSX’s

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Our Approach Transforming How We Deliver Excellent Customer Service Technology and Tools Customer Feedback and Engagement Operations Support Enabling Growth and Sustainability

OUR APPROACH We are committed to providing best-in-class service “Ultimately, CSX succeeds and reliable, cost-efficient transportation solutions when our customers succeed. that are safe, smart, and sustainable to our more than 3,300 customers across 6,000 locations. By doing our jobs well, we enable our customers to At CSX, we all own the customer experience. Every employee, whether customer-facing or not, is grow and support strong expected to meet or exceed our customers’ needs. communities. We give our Maintaining open lines of communication and actively listening to our customers’ needs and challenges customers incentive to is essential to our ability to provide exceptional choose rail, which is safe customer service. Our Sales and Marketing teams are responsible for overseeing customer experience and and sustainable. And we addressing customer feedback, partnering closely support a more efficient and with Operations and other teams to offer an industry- leading service product. productive U.S. economy.”

In 2019, we restructured our Sales and Marketing Mark K. Wallace organization to better utilize resources and facilitate Executive Vice President knowledge sharing to improve how we serve of Sales and Marketing customers. We also intensified efforts to partner with customers to help them achieve their unique logistical and environmental goals.

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TRANSFORMING HOW emissions. In addition, we are able carrier. A shipment’s trip plan is WE DELIVER EXCELLENT to offer customers a higher level created based on train schedules, CUSTOMER SERVICE of reliability, predictability, and terminal handling standards, transparency than has ever been terminal hours of operation, and Improving customer service is one possible through rail, while meeting for Intermodal customers, the of the five guiding principles at surges in customer demand and intermodal reservation system. the center of our transformation. adapting with agility to unforeseen Thanks to greater efficiencies events and needs. Sharing this information with our resulting from the implementation customers enables the Sales and of CSX’s new operating model, In 2019, CSX became the first Marketing team to have transparent including the smart application railroad to offer a Trip Plan conversations about service of technology, CSX is now better Performance tool to customers, performance and routing decisions. positioned to be a best-in-class providing an unprecedented level supply chain partner to customers. of transparency into our service. Since the beginning of the Originally created as an internal transformation, average transit time measurement tool to support for merchandise carloads has been operations improvement, Trip Plan reduced by more than two days. Performance tool now enables Carload trip plan performance customers to see detailed jumped from 67.3% in 2018 to data on our delivery performance 82.6% at the end of 2019 and for every carload, container and intermodal trip plan performance trailer shipped on CSX. Each trip increased from 73.4% to 95.5%. plan is an end-to-end customer This new efficiency results in commitment based on the original faster transit times and greater estimated time of notification of environmental benefits due to shipment arrival or the estimated decreased fuel usage and time of interchange with another

“Subaru has now added an additional railhead “CSX’s high level of on-time service, predictability, in Lordstown, Ohio, in order to improve and dependability has helped Schneider compete our supply chain efficiency and reduce the with an ultra-competitive truck market. CSX’s on- environmental impact. The location of this new time service performance for the past year has ramp will better serve our market due to its been dependable, consistent, and reliable. This close proximity to the retailers in that area. This performance, combined with the benefits of an also results in reduced mileage and emissions asset-based intermodal provider, gives shippers a for our truck carriers. CSX has always provided true truck-like experience.” great service and as a result has had a long Schneider standing partnership with Subaru.”

Subaru of America, Inc.

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Raising the Bar on Rail Service

Train Velocity Terminal Car Dwell (miles per hour) (hours)

1Q20 21.2 1Q20 8.3

4Q19 21.3 4Q19 8.4

3Q19 20.3 3Q19 8.9

2Q19 20.0 2Q19 8.7

1Q19 20.4 1Q19 8.5

4Q18 19.0 4Q18 9.2

3Q18 17.9 3Q18 8.9

2Q18 17.5 2Q18 9.6

1Q18 17.5 1Q18 10.3

4Q17 16.2 4Q17 10.6

3Q17 13.9 3Q17 12.0

2Q17 16.2 2Q17 10.7

1Q17 14.2 1Q17 11.4

0 5 10 15 20 25 0 2 4 6 8 10 12 14

Car Miles per Day Gallons of Fuel per kGTM

2019 134 2019 1.01

2018 124 2018 1.05 0 50 100 150 0 0.50 1.0 1.05 1.1

Carload Trip Plan Performance Intermodal Trip Plan Performance

100 100 95.5% 95 95 94.2% 89.9% 90 90

85 82.6% 85 78.3% 80 75.7% 80 74.4% 73.4% 75 73.9% 75

70 67.3% 70

65 65

60 60 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19

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TECHNOLOGY AND TOOLS customers with improved supply development of solutions, such OPERATIONS SUPPORT chain transparency and shipment- as our industry leading ShipCSX To provide the best possible The CSX Operations team plays a status visibility. Using secure platform. experience for our customers, CSX critical role in delivering excellent blockchain technology, TradeLens continues to use and invest in customer service. By designing overcomes data processing silos › E-Solutions is delivering tools to multiple technologies to streamline optimal routes that maximize to support collaboration across transform Sales and Marketing supply chains and create more both efficiency and reliability, we the supply chain and provide core work as well as drive ease of efficient modes of delivery. are able to meet or exceed our customers with timely updates. doing business with CSX. customers’ needs. The customer- XGate, in addition to providing facing Trip Plan Performance (TPP) › Customer Solutions and significant environmental benefits, tool drives accountability as it CUSTOMER FEEDBACK AND Supplemental teams are the has increased the pace of tracks and measures our service ENGAGEMENT conduit between Operations, customer deliveries by scanning performance on a lane-by-lane Sales, and our customers to and inspecting containers in a Our Sales, Marketing, and basis. Through close partnerships resolve service and demurrage fraction of the time it takes a team Customer Engagement teams with Sales and Marketing, the concerns. of workers to do so. all partner closely with the Operations team continually

Operations team to ensure an improves service for existing › Marketing Services supports our Our ShipCSX platform allows excellent customer experience. customers while allowing for new core Marketing team in pricing, customers to plan, ship, trace, Both the Sales and Marketing service products that enable publishing, and billing work. and pay for shipments quickly teams are aligned around incremental growth. with secure data that is specific commodities and end-market We host customer-engagement to the customer. With ShipCSX’s segments, all designed to support The Customer Solutions team also forums twice a year, bringing reservation system, intermodal out-sized market growth. works hand in hand with Operations together customers and CSX leaders customers benefit from prioritized to ensure customer feedback is for constructive discussions about handling that provides improved Our Customer Engagement team being heeded at the corporate customers’ business needs and how shipment planning as well as works directly with our Operations level and throughout the field. The CSX can meet them. Through this enhanced terminal fluidity as departments on a daily basis to Operations team supports customer dialogue, we share information about assets are balanced network-wide. resolve customer issues and is service in a variety of ways, the latest service enhancements comprised of our E-Solutions, including: and network adjustments, as well as In 2019, CSX became the first Customer Solutions, and Marketing discuss new ways for CSX to be an North American railroad to join Services functions, all of which › Monitoring service performance optimal supply chain partner. TradeLens, a global shipping support our internal and via Trip Plan information platform that provides external customers through the › Providing action plans to the Customer Solutions and Commercial teams to serve customer needs

› Adjusting serving days, times, and capacities to align with customer needs “CSXT has been the pioneer when it comes to “Scheduled railroading has allowed Cameron enhancing their web tools as it compares to and its customers to avoid extra investment › Participating in daily network our other Class 1 carriers. They are providing in facilities and handle the increasing volumes operations meetings to discuss better visibility to our shipments and allowing us through responsive alterations to days and any customer feedback received more insight to their transit performance. This is frequency of service.” helping not only Cargill but our customers.” Cameron Ag Products Cargill

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› Carolina Connector (CCX) enhanced intermodal service offering. CSX added CSX is expanding into eastern North Carolina with the a premium service between Los Angeles and construction of a new intermodal terminal in Rocky Northwest Ohio as well as expanded service to East Mount. Strategically located on the CSX network and Coast ports, strengthening CSX’s commitment to near the major consumption market in the Triangle sustainable growth for the future. Region, the Carolina Connector terminal will provide regional industries with convenient access to rail, › Inland Ports helping connect products to consumers nationwide. Inland ports are intermodal facilities that alleviate truck congestion in high-traffic port areas by CSX Intermodal Terminals (CSXIT) is a leader in connecting directly to marine terminals via rail. technologically advanced and environmentally CSX currently connects to three inland ports — in friendly intermodal rail terminals. The Carolina northwest Georgia, northeastern South Carolina, and Connector terminal will feature three wide-span, zero Syracuse, New York — that offer shippers a strategic emission electric cranes with an annual lift capacity alternative to trucking in reaching key markets. These of 110,000 containers. The majority of container terminals, developed by states and port authorities handling will be completely automatic with operators on the CSX system, take advantage of the efficiency remotely controlling the initial lift and final placement of rail and provide importers and exporters with an from inside the terminal building. efficient transportation solution that works within the global supply chain while helping to reduce each Construction on the new facility is expected to be shipment’s carbon footprint. completed by early 2021. Inland port service also taps directly into CSX’s focus › Northwest Ohio Investments on increasing intermodal capacity, expanding reach CSX’s Northwest Ohio intermodal terminal in North into new markets and providing superior supply chain Baltimore, Ohio is a state-of-the-art facility with solutions for our customers. leading-edge equipment and technology. The terminal’s centerpieces are seven zero-emission These inland terminals not only generate economic and nearly silent wide-span electric cranes. Each opportunities in the regions they serve, but also crane has a 46-ton capacity, allowing ultra-efficient convert freight from highway to rail. CSX is dedicated container movement from train to truck and truck to to helping intermodal customers find new ways to train. Together crane, gate and terminal operating convert more freight to achieve socially responsible system technology maximize efficiency and create a outcomes. Every container that converts to rail driver experience that reduces turn time. advances a shipper’s interest in reducing their carbon footprint, minimizing their impact on the environment ENABLING GROWTH AND SUSTAINABILITY bulk products are safely transferred between railcars To capture growth in the region and provide supply and creating a greener, more efficient supply chain. and trucks, giving customers flexibility to access new chain solutions for shippers, CSX partnered with Partnering for Growth markets and suppliers. TRANSFLO has experience NorthPoint Development on a scalable, phased By partnering with customers to design innovative with more than 300 different products, including logistics park to be built adjacent to the Northwest supply chain solutions and providing new services, chemicals, crude oil, dry bulk, ethanol, food–grade Ohio terminal. With access to over 500 acres, the CSX is generating opportunities that enable growth products, plastics, and waste materials. logistics park will provide value-added services and innovation across our network and beyond. The for shippers, offering opportunities to reduce following are examples of key initiatives: › CSX Select Sites transportation costs and augment distribution CSX Select Sites are development-ready properties footprints by moving goods from train to truck to › TRANSFLO ideal for industrial development and expansion. warehouse all at one location. Construction on the CSX TRANSFLO helps customers take advantage These sites have been independently certified by logistics park is currently underway. of the economic and environmental benefits of rail The Austin Company and are prime locations for without having rail infrastructure at their facility. At rail-served industrial customers who are looking to In addition to traditional warehousing and distribution each of the 40-plus TRANSFLO transloading terminals, purchase a property with lower upfront development capabilities created by the logistics park, the risk and faster speed to market. Northwest Ohio growth initiative comes with an

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Driving Local Economic With our infrastructure capital Opportunities expenditures and community Throughout our 23-state network, investments, CSX creates jobs, we contribute to the wealth and supports economic growth, and prosperity of the local communities builds better communities across where we operate by driving our value chain. economic value and opportunities.

State Employees* Annual Payroll Track Miles** System Capital Investments

Alabama 853 $98,029,561 1,472 $89,780,633 Connecticut 2 $1,414,661 221 $31,000 Delaware 41 $5,218,725 129 $871,000 District of 21 $4,578,000 71 $26,662,000 Columbia Florida 3,274 $559,261,430 2,465 $179,819,583 Georgia 1,803 $194,886,658 2,645 $210,276,810 Illinois 502 $50,524,361 1,189 $58,662,121 Indiana 966 $136,901,689 2,527 $85,752,367 Kentucky 1,100 $152,128,879 2,870 $61,933,337 Louisiana 90 $6,558,856 136 $29,408,000 Maryland 818 $82,360,622 1,364 $55,299,511 Massachusetts 200 $16,300,984 657 $15,382,126 Michigan 301 $32,842,258 1,142 $29,173,105 Mississippi 32 $7,492,237 130 $8,821,000 New Jersey 92 $12,886,350 994 $16,585,478 New York 1,426 $158,858,693 2,777 $75,539,073 North Carolina 605 $74,442,454 1,752 $71,175,982 Ohio 2,056 $209,008,320 4,010 $131,310,551 Pennsylvania 582 $68,062,921 2,019 $50,422,305 South Carolina 536 $74,193,785 1,792 $71,093,791 Tennessee 954 $122,469,533 1,547 $104,267,731 Virginia 665 $79,532,476 2,018 $51,691,015 West Virginia 877 $97,540,833 1,991 $53,026,000

* Does not include employees of subsidiary companies, # of employees who don’t have long-term state assignment but report into various locations as assigned, and those assigned to locations outside the above listed states ** Including yard, sidings, and mainline track 30 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 31 “Nothing is more important to CSX than the safety of our employees, our customers, Safety and the communities where we Our Approach operate. We wake up thinking about safety, we start every Transforming Our Safety Approach gathering with a safety briefing, Safety Performance and we integrate safety Physical Protection and Security guidelines and best practices into every moment of the day. Hazard Management and Emergency Preparedness Successfully managing safety Customer Collaboration is the bedrock of the success Community Safety of our business.”

James Schwichtenberg Vice President and Chief Safety Officer OUR APPROACH We additionally established an Executive Safety Council to increase leadership engagement and involvement Every employee at CSX is part of the Safety team – in CSX’s system-wide safety plan. The Council also regardless of title, job responsibilities, or geographic oversees Regional Safety Councils in each field region location. We foster a culture of learning and take a to promote knowledge-sharing and ensure alignment to network approach to safety, with a goal of together the overall safety plan. identifying best practices to eliminate risk and sharing those practices across the system. We take a preventive We uphold our safety culture through effective approach, working to proactively limit any risk to our management systems; ongoing training; robust employees or anyone in the vicinity of our rail network. hazard management and emergency preparedness and When an incident does occur, whether minor or response mechanisms; and continuous collaboration significant, we actively look for opportunities to remove and communication with employees, customers, or reduce the risk associated with the incident. suppliers, communities, and industry peers.

Following the appointment of a new chief safety officer Every day we track practices and procedures through in 2018, we strengthened our safety organization and our Public Safety, Health, and Environment (PSH&E) added comprehensive measures to fortify our safety Management System, which is regularly updated under culture. We also solidified our Operational Training, the requirements of the American Chemistry Council’s Operating Practice and Rules, and Field Safety groups Responsible Care Management System and informed by appointing new leaders tasked with identifying gaps by ISO 14001. In 2019, we completed a full system and making improvements in their respective areas. audit and achieved Responsible Care Management System recertification. Train Accident Prevention and Train Handling added field positions focused on engineer certification and main line train performance.

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Also in 2019, we invested $1.3 2019 2018 2017 2016 TRANSFORMING OUR SAFETY APPROACH billion out of a total of $1.7 Money invested in $1.3B $1.3B $1.3B $1.15B billion capital spending in critical infrastructure infrastructure to maintain our safety Total capital $1.7B $1.7B $2.0B $2.7B Safety was a major pillar of the transformation and since 2017, standards, including installing nearly spending 3 million new ties and nearly 1,000 New ties installed 3.02M 2.66M 2.58M 2.76M we have made significant advancements in our safety approach. linear miles of new rail, as well as New rail installed 996 linear 866 linear 914 linear 874 linear surfacing more than 4,700 miles miles miles miles miles of track. Surfacing 4,712 miles 4,408 miles 4,098 miles 4,591 miles

Training We updated our training programs to improve employee and community safety knowledge. All employees are required to complete the full updated training Comprehensive Assessment curriculum. In 2018, we completed a large-scale safety and culture assessment with a third- Clean Sweeps party research group to identify areas for improvement. More than 60% of CSX Active Communication We made efforts to improve communications Safety is everyone’s responsibility. Throughout our employees participated in the employee survey portion of the assessment. Employee with and between our Operations and Safety network, CSX employees have gathered periodically feedback emphasized the importance of teams and began monthly meetings with to perform informal “Clean Sweeps” at their worksites strong leadership, frequent and transparent operations and Executive team members – making sure their spaces are neat and orderly. communication, and the proper upkeep of to discuss ongoing safety performance and Clean Sweeps can include organizing amenities work environments. improvements and increase leadership’s visibility into safety operations. At the field and materials, repainting walkways and parking lots, level, we gave supervisors localized, data- enabling recycling, and more. With great benefits driven safety plans, complete with detailed for safety, environmental sustainability, and on-site Leadership information on how to handle specific employee culture, Clean Sweeps became a strategic In 2018, we hired a recognized industry situations. Looking ahead, we will continue corporate initiative in 2019. More than 700 employees, professional as our new chief safety officer, to administer regular culture and safety representing all CSX departments, conducted Clean James Schwichtenberg, to revitalize the surveys to gather employee feedback in CSX safety approach. Bringing more than creating best practices for continuous safety Sweeps at 15 locations across the network last year, 20 years of railroad experience, including improvements on the front lines. creating healthier and safer work environments for all. 15 years leading rail safety and regulatory initiatives, Schwichtenberg dove into an analysis of safety performance data and Innovation and Technology procedures and, based on his findings, led a We significantly invested in new safety full redesign of the CSX safety strategy. technologies, including autonomous “Clean Sweep supports our safety “Clean Sweep is an important way to support track assessment cars, which automate issue detection and significantly reduce initiatives by really taking things to the safety. All the material we pick up prevents train accidents; drones, which give more Employee Compensation next level – getting things out of the slips, trips, and falls. It also raises the morale complete visual data for operational testing; In 2019, we made an important move to tie way of harm and off the ground.” of employees when they see coworkers from and Train Inspection Portals, an automated safety performance to employee bonuses. system that produces 360-degree scans of across the network coming together as a team to Ten percent of employee bonus potential is railcars passing through the portal at track Asher Lohman enhance the work environment for the men and now dependent on CSX’s attainment of key speed. Sr. Technical Director, CSX Technology women who walk these rocks every day.” safety targets.

Rob Garofolo Superintendent, Northeast Region, Northern Zone

34 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 35 Safety FRA Personal Injury Rate1 +17% SAFETY PERFORMANCE A New Chapter in following them diligently. CSX also worked with the FRA to create a new operational testing program to CSX had fewer train accidents in 2019 than in any +12% 1.30 help drive an even higher level of safety compliance. other year in the history of the company, with safety Safety: A Proactive, 1.20 metrics improving quarter over quarter. We were also 1.10 -16% As a result of this effort, CSX was able to evolve its proud to lead Class I railroads with an FRA personal -14% Risk Based 1.00 approach to safety incidents and shift from a reactive injury rate of 0.89 in 2019 — a 14% decrease from 0.90 approach to a proactive approach, minimizing the 2018. 9 .8 1.05 1.23 1.04 Approach 0.80 risks most likely to cause incidents. In 2019, CSX had

2016 2017 2018 2019 fewer train accidents than any year in the history of the While we are proud of our progress, we will not be 1 FRA Personal Injury Rate calculated as cases/200,000 employee hours. Safety statistics are estimated and continue to be updated as actuals settle. company, with train accident rate improving quarter satisfied until we have achieved zero accidents and In 2018, CSX appointed 22-year industry veteran over quarter from Q4 2018 to Q4 2019. injuries. In 2019, we suffered two fatalities on our rail 2 FRA Train Accident Rate James Schwichtenberg as chief safety officer. Upon lines, which were the result of two separate incidents. +17% his arrival, Schwichtenberg’s first step was to analyze For his efforts, Schwichtenberg was selected by Both were thoroughly investigated to determine the +9% historic incident data to understand trends and key Progressive Railroading to be one of 25 individuals cause and identify any changes that should be made 4.00 +8% problem areas. In studying the data, Schwichtenberg recognized as a 2019 Rising Star of the North to prevent tragic incidents in the future. 3.50 and team identified the need for a renewed focus on American rail industry.

3.00 rule compliance and on eradicating the underlying We are committed to continuous safety improvements -36% 2.50 actions statistically most likely to lead to an incident “At CSX, there’s a family-like emphasis on protecting and remain focused on reducing risks across our rail 2.00 or injury. Schwichtenberg and his team, armed one another. For us, safety is important because

network. 2.32 2.82 1.50 3.11 3.66 with the findings of the data study, issued a new it can be literally life changing in this industry,” 2016 2017 2018 2019 operating rules manual and trained management and Schwichtenberg said. 2 FRA Train Accident Rate tracks FRA reportable train accidents per million train miles. Safety statistics are estimated and continue to be updated as union employees on the rules and the importance of PHYSICAL PROTECTION AND SECURITY actuals settle. CSX takes the protection of its physical and Assessment Testing operational assets seriously. We serve as a primary Regular assessment testing is a central practice of the mode of transport for the goods that businesses CSX Infrastructure Protection team. Each year, CSX and consumers use every day. Security is therefore participates in a comprehensive industry risk assessment, essential to our operations. We also share sections or Threat Risk Assessment, in conjunction with the of tracks with passenger trains and maintain secure Association of American Railroads (AAR) Rail Security infrastructure for these trains and passengers. Working Committee. CSX also conducts an annual terrorism- focused stress test, which includes terrorist The CSX Infrastructure Protection team works to threats as well as other physical security threats. guarantee the safety and security of the rails, yards, bridges and tunnels, as well as fuel centers, aviation The CSX Infrastructure Protection team complies with, divisions, and corporate buildings. Additionally, CSX and is trained in, relevant business continuity and employs its own police force of special agents charged pandemic response regulations and exercises set forth by with the protection of our personnel and property. the FRA and the Transportation Security Administration The force works across our 23-state footprint and (TSA). All scenario-based tests are designed from real-life maintains close relationships with local and state law situations gathered from the FRA, TSA, and the AAR Rail enforcement. Security Working Group.

CSX’s approach to addressing physical security risks The team also performs physical assessments in is two-fold: We conduct regular assessments involving response to any issues raised by local teams. In 2019, a variety of up-to-date scenarios, and we use the latest CSX experienced an unusual number of break- ins at our tools and technology to support our activities. car distribution centers and our special agents performed evaluations of these incidents. The evaluations identified ways to increase security at each facility and provided guidance to local management for implementation of new security measures.

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Tools and Technology Positive Train Control other railroads, including the Belt A high-performing safety Positive Train Control (PTC) is Railway of Chicago, Metra, Conrail, organization requires diligence on an advanced nationwide system Amtrak, South Florida Regional the part of every employee, but of technologies designed to Transportation Authority (Tri-Rail), it also requires the application of automatically stop a train before Wheeling and Lake Erie Railway, cutting-edge technology. We have certain incidents occur. To KWT Railway and Virginia Railway vastly upgraded our use of work properly, PTC needs to Express. technology over the past few years function seamlessly within and and we have seen the results in between railroads. In 2019, CSX Every day, CSX averages 98.6% our safety performance. We view achieved 100% operability on the of trains operating with PTC the continued implementation designated subdivisions on our in territory equipped with the of new tools and technologies network. CSX is also interoperable technology, with an overall as a key component of further with every Class I railroad, with enforcement rate of 0.8%. to 56 for 2019, a decrease from local field officers to address any in 2019, we have deployed 44 improving the safety and efficiency the exception of Canadian Pacific. Significant upgrades were made to 96 in 2018. As the system grows risky behavior or unsafe actions. drones across the CSX system. of our operations going forward. We plan to achieve interoperability the PTC system in 2019, resulting and additional improvements are The following are some of the with Canadian Pacific in July in improvements to both safety made, we expect PTC will yield The Safety Department Asset Monitoring and technologies we use to optimize 2020. In addition to the Class I and efficiency. For example, even further safety improvements. additionally uses this technology Detection Technology our safety performance. railroads, CSX is interoperable with engineer revocations were down to randomly audit train crews CSX uses sensing cameras Inward Facing Camera and for compliance even when no and access controls to monitor Cell Detection Technology alerts are received. The system access to its properties and Inward facing camera and cell also provides a remote, real- assets, including an upgraded detection technology allows time solution for retrieving event badge access system installed CSX to streamline the detection recorder and video downloads. In in early 2020. Technology and dissemination of safety 2019, CSX performed more than platforms used include the Autonomous Track alerts by taking the locomotive 300 audits helping to ensure crew Security Countermeasure System diagnostic information and compliance with CSX rules and (SCMS), which maps out each Assessment Cars remotely transmitting alerts to policies. company location, the critical CSX personnel when it senses assets onsite and the employee One of the most important additions to our technology problems outside of CSX Drones assigned to the asset, and then in the past several years has been autonomous track operating and safety parameters. In 2019, CSX launched an assigns countermeasures. In assessment cars (ATAC). After successfully deploying unmanned aerial vehicle (UAV emergency situations where the three cars between 2018 and 2019, we plan to add an In 2019, nearly 400 Locomotive or drone) program to enhance security plan is invoked, SCMS additional two in 2020, covering 55% of our core main Data Acquisition and Recording federally mandated operational can raise security alerts to CSX line track miles, totaling 300,000 miles of coverage. Systems (LDARS), which combine testing and observations. As part management. The Crisis Alert event recorder, PTC and video of the program, we designated Response System (CARS) is also These cars and their data collection data into one location, were drones to each region with trained used to measure and assess installed on CSX locomotives. and qualified pilots using Federal environmental risks (such as capabilities, enabled by advanced Aviation Administration guidelines. weather threats and hazardous optical and laser sensors, have Issues such as cell phone usage material plumes) and project the on a moving train, engineer- Drones provide better visual data expected impact on a community. already been instrumental in initiated emergency brake through their ability to capture To communicate with all employees reducing accidents. applications, PTC enforcements, views from between rail tracks by email, phone, and text in a and severe train slack are just a and deeper into railyards than matter of seconds, CSX uses the few examples of alerts the system was previously possible. The data MIR3 communication platform. With the success of proof of concept, the CSX ATAC recognizes and flags. Once an enable more thorough operational pilot program was approved by the FRA in March alert is received, it is thoroughly testing and more detailed 2020, and cars will be running two routes in intermodal reviewed by Safety Department employee training and education. commercial service with the goal of reducing track employees who coordinate with Following successful testing exceptions per mile by 12% by October 2020.

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Train Inspection Portal: Seeing upgrading TIP, enabling even faster for all new employees. Training Every Angle of Safety and more thorough detection of includes online and in-person CSX trains are inspected for safety safety hazards and abnormalities. instruction and is tailored to on both inbound and outbound We are additionally exploring the the needs of each locality. The trips. This process typically takes possibilities of adding thermal approach covers how and to one-and-a-half to two hours and imaging or heat sensor technology whom to report hazards and involves two or more carmen to identify when a component may emergency events and is based walking the length of the stopped be in distress. on regulatory requirements, train searching for loose bolts, including how to conduct package wheel wear, or other safety We are continuing to work with inspections specified in FRA hazards. Even with these thorough our partners to identify new ways and AAR standards M-1002 manual inspections, identifying to apply technology to advance Technical Approval Requirements defects on top and beneath freight employee and community safety. and M-1003 Quality Assurance cars manually can be a challenge. We see promise in increasing Program Requirements. The 3R automation of other routine approach is also codified in our CSX’s new Train Inspection Portal inspections to be able to provide security policy and operating (TIP) — introduced in December more and better data to our manual. 2019 just outside of Waycross, maintenance personnel, allowing Georgia where train traffic is them to make real-time decisions CSX contractors also participate in the densest — was created to on asset health. 3R classroom training programs. increase inspection efficiency and By the end of 2019, more than efficacy. Designed as an open 75% of our contractors had “gate” over the train track, the HAZARD MANAGEMENT AND completed training, and we are portal has 17 ultra-high definition EMERGENCY PREPAREDNESS working toward achieving 100% cameras capturing 360-degree trained. CSX works closely with our scans of passing trains at track employees, customers, regulators, speed. The captured images CSX is committed to increasing and suppliers to deliver and handle are processed through multiple public transparency around the chemicals and hazardous materials algorithms in just two minutes, safe movement of hazardous safely, reliably, and with care. giving inspectors at a central materials on the company’s

location the ability to review network, balancing publicly Our approach to hazardous all angles of trains, valuably available information with the materials transportation relies supplementing information ongoing need to protect rail on company-wide preparedness received from manual inspections. security and customer proprietary using the principles of a 3R information. We regularly update methodology – recognize, record The TIP has the potential to our website with the types of and report. We have robust reduce the time a train spends commodities we transport. guidelines, protocols, and training at each inspection location by For detailed information on in place to ensure the safe almost 97%. The system reduces the hazardous commodities handling of hazardous materials. human error and protects our classifications and transportation This includes how to respond carmen from safety hazards materials by state, visit our to hazardous material incidents during inspection while building a Hazardous Materials webpage. as well as non-hazmat events, database of images to be used for such as those related to the further innovation. transportation of food ingredients.

Given the success of TIP to date, The 3R approach is taught in we are adding one more portal to annual employee training as our network in 2020. We are also well as in onboarding training 17 ultra-high definition cameras scan trains at rail speed. 40 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 41 Safety

First Responder Engagement and Training › Communication and Coordination In the event of a rail emergency, quick and decisive The CSX Public Safety Coordination Center (PSCC) action by first responders is critical. CSX works in is our communications hub for coordinating with first close partnership with first responders throughout responders and dispatchers 24 hours a day. Anyone our network to provide them with the necessary can report railroad incidents by calling the PSCC to information, training, and coordination of resources to provide information on blocked crossings, crossing respond effectively in an incident or emergency. collisions, signal problems, materials released, theft, vandalism, or trespassing. The PSCC engages › Training directly with local authorities and CSX internal One of the primary ways CSX provides training to resources to address issues promptly. first responders is through the CSX Safety Train Classroom, a rolling classroom railcar that visits To increase communication and coordination further communities across the network to share incident with the first responder community, CSX joined response expertise with local first responders. In AskRail in 2019. A collaborative effort between 2019, through a partnership with 40 fire departments, railroads and the emergency response community, we provided training at the Annual Hazmat AskRail is a mobile app that provides more than Conference in Yorktown, Virginia, reaching first 25,000 first responders with immediate access to responders as well as federal regulators from across accurate, timely data about what type of hazardous the country. materials a railcar is carrying so they can make an informed decision about how to respond to a rail emergency.

Employees at CSX’s Public Safety Coordination Center work around the clock to address safety concerns.

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CUSTOMER COLLABORATION

Strong partnerships with customers are essential to optimizing safety performance. Many of our In 2019: customers own their own rail tracks and we are dedicated to helping them learn and apply our proven best practices for maintaining rail equipment. The CSX Safety team regularly provides customers with updated safety information through one-on- one outreach, brochures, and our Customer Safety website. We also recognize customers for high levels of safety performance regarding the transportation of hazardous materials through our annual Chemical 3,353 Safety Excellence Awards. In 2019, 70 CSX customers earned this recognition. received Hazardous

Material Training COMMUNITY SAFETY

The CSX commitment to safety extends beyond our employees and facilities into the communities served by our rail network. We are committed to educating citizens — and particularly children — about the Employees educated motorists at a busy Employees distribute safety importance of staying away from railroad tracks and crossing about safe driving practices materials to drivers 287 practicing safe behaviors at railroad crossings. We have a multi-year partnership with Operation Operation Lifesaver Lifesaver, an education and awareness organization activities undertaken committed to ending collisions, fatalities, and injuries at highway-rail grade crossings and along railroad rights-of-way.

Each year, we work with Operation Lifesaver to conduct free rail-safety education programming for schoolchildren, community organizations, driver’s education students, and professional truck and bus 27,944 drivers. We also partner with Operation Lifesaver to provide specialized training for the law enforcement community members officers who investigate highway-rail grade crossing reached through collisions, as well as first responders to help them apply personal safety practices when responding to a these activities rail incident.

In addition to our work with Operation Lifesaver, CSX actively participates in Rail Safety Week, held in 2019 from September 23 to 29. During the week, CSX conducted 50 awareness activities, including trespassing and traffic enforcement blitzes, school and community presentations, and truck driver outreach. CSX employees engaged thousands of school children during the 2019 Rail Safety Week

44 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 45 Environment Our Approach Progress Toward 2020 Goals Compliance Climate Change Energy Performance Recycling, Reuse, and Waste Disposal Water Management

OUR APPROACH To minimize our environmental impact, we work across the organization to thoughtfully manage energy, Environmental sustainability is at the core of CSX’s waste, water, and air emissions. value proposition. As the most fuel-efficient mode of freight transportation on land, rail continues to enable Our Environmental team works closely to track, significant emission reductions for customers, while monitor, and communicate environmental management driving economic prosperity. That’s why we’re actively and compliance strategies across the organization working to innovate our approach and drive efficiencies, using the Public Safety, Health, and Environment while setting unprecedented goals and pursuing (PSH&E) Management System. We use the PSH&E opportunities for continued improvement as part of our Management System to drive a culture of environmental commitment to sustainable business practices. impact minimization throughout our organization. The system incorporates major elements of ISO 14001, On average, trains are three to four times more fuel- the Environmental Protection Agency’s Compliance- efficient than trucks, giving trains the potential to lower Focused Environmental Management System, and greenhouse gas (GHG) emissions by 75%. At CSX, other industry-specific standards. In 2019, it underwent we take this advantage as a baseline and are always a full system audit which resulted in certification of looking for and applying new ways to empower our compliance with the American Chemistry Council’s customers to achieve greater environmental savings. Responsible Care Management System.

As a result of our new operating model, we have Additional details on our environmental management continued to improve our environmental footprint. In approach, including our Environmental Policy, can be 2019, CSX became the first U.S. Class I railroad to found on our Environment & Efficiency page. operate at a fuel efficiency rate of less than one gallon of fuel per thousand gross ton miles for a quarter.

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Goal Status 2019 Progress PROGRESS TOWARD 2020 GOALS optimize our customers’ and our own environmental footprint. Also, as part of this process, we are Reduce GHG emissions intensity by ACHIEVED This goal was achieved in 2018, and emissions In 2012, we set a series of environmental goals to looking to set an internal price on carbon within 6-8% intensity in 2019 was 10.8% below 2012 levels. achieve by the end of 2020, most of which we have the next two years. We anticipate 2020 emissions intensity will be reached or are on track to achieving. lower still.

While we continue to work toward our 2020 COMPLIANCE objectives, we are also working to set new Increase energy blend to 10% NOT ACHIEVED CSX continues to invest in on-site renewable The Environmental Operations team prioritizes, and environmental goals to guide our strategy through renewable sources energy for assets and facilities, where it makes the consistently achieves, compliance with local and 2030. In this process, we will continue to build on our most sense. We are investigating multiple avenues federal regulations. We are constantly working to find success in moving more freight with less asset for increasing our renewable portfolio in the future. new methods, technologies, and training opportunities intensity and reducing fuel consumption to to better enable us to meet and exceed regulatory standards. Reduce hazardous waste generator NEARLY ACHIEVED By the end of 2019, we decreased our hazardous status by 25% waste by 21% and are on track to achieve a 25% “Setting a science-based target is one of the In 2019, we underwent nearly 100 internal reviews of reduction by the end of 2020. most ambitious actions a company can take our facilities to ensure compliance with local, state, to fight the climate crisis. We congratulate and federal regulations, including more than 40 Clean CSX for demonstrating its commitment to Decrease asphalt, concrete, and NEARLY ACHIEVED We successfully decreased our concrete and brick Air Act and 155 Clean Water Act permits system-wide. strong emissions reductions, and for being brick to landfill to zero to landfill to zero. 7% of asphalt generated in 2019 CSX implements a review program that includes self- the first railroad in North America to have went to landfill, but we are on track to get to zero review, peer-review, and third-party reviews conducted a target this ambitious approved. We look by the end of the year. by consultants using a complete multi-media protocol. forward to seeing other railroad companies Findings and corrective actions from these reviews are follow their example, which is crucial for tracked in an electronic management system. Complete Reduce quantity of water consumed ACHIEVED We successfully reduced our water consumption achieving the goals of the Paris Agreement.” risk profiles of every facility are conducted annually. The by 60%. Bruno Sarda electronic management system helps determine review President of CDP North America frequency for large and small facilities. Improve the quality of effluent water ACHIEVED CSX reduced the number of environmental deviations pertinent to the Clean Water Act by nearly 37%. Taking Charge to Reduce Emissions Continue to elevate sustainable ACHIEVED CSX has built several LEED certified buildings in standards of construction recent years and is also making the best use of In April 2019, the Association of American Railroads (AAR) awarded CSX’s Gary Van Tassel, director of existing buildings. There have been significant operations planning, the John H. Chafee Environmental lighting retrofits in car shops, office buildings, and Excellence Award. The award recognized Van Tassel’s throughout railyards – improving the quality of light role in the development and implementation of XGate and reducing the energy required. — a revolutionary new system that reduces potential emissions at intermodal terminals by up to 90%. Encourage employees to take ACHIEVED As part of CSX’s transformation, we have reduced sustainable actions in their everyday the footprint and number of buildings where we XGate is an automated, drive-through system that jobs, such as conserving energy, operate, while continuing to identify ways to create scans and inspects containers for damage in a fraction reducing waste, and identifying new efficiencies. of the time it takes a team of workers to do so. The efficiencies accompanying mobile app also allows drivers to XGate has played a significant role in our ability to pre-plan terminal stops, enabling CSX to configure reduce our emissions — and will continue to help us containers for optimal loading and unloading. This make reductions in the future. The reduction in human system minimizes emissions by significantly reducing interaction enabled by XGate has also helped decrease truck idle time, reduces human labor, and cuts employee risk from health and safety hazards, most customer wait time from minutes to just seconds. recently from the coronavirus pandemic.

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CLIMATE CHANGE Tracking our GHG Intensity Emission CSX understands that we have an Reduction Progress (% reduction) important role to play in addressing -4.6% the complex global challenge of -5.0% climate change. We are working -7.2% -10.8% to be part of the solution for our communities, employees, and stakeholders. That is why we set the most aggressive greenhouse gas reduction target among the Class 1 railroads.

-37.3% In 2019, we partnered with the Science Based Targets initiative (SBTi), an organization dedicated to supporting commitments that 2016 2017 2018 2019 ...2030 are consistent with the goal of limiting global warming to well- below 2°C above pre-industrial Locomotives by Type levels. Through this partnership, We have also prepared to Since 2017, we have continued CSX has made an ambitious implement the Meet Pass to look at our owned fleet to new commitment to reduce GHG Planner (MPP) – a locomotive identify efficiencies and decrease miles intensity emissions by 37.3% by monitoring technology – in early the number of locomotives in our Year 2016 2017 2018 2019 2030, using 2014 as our baseline. 2020. The MPP determines the portfolio. At the same time, with Freight 3,880 3,659 3,440 3,162 508 CSX is the first railroad in the least fuel intensive action for our automation technology, we U.S. to align with SBTi. As part of Switching 311 299 254 220 two approaching trains, i.e., are now able to better manage our commitment, we are working Auxiliary 209 208 204 179 whether they should slow down our owned fleet and, based Distance moved for one to identify and implement new Total 4,400 4,166 3,898 3,561 to pass each other, or whether the on demand, determine which ton of freight on a single technologies, including enhanced emptier train should stop to let the locomotives should be kept in automatic control improvements other pass. The plan integrates storage rather than remain idle on gallon of fuel; a 7% for the trip optimizer infrastructure highest-ever fuel efficiency in 2019 and communicates automatically automatic control functions that the track. Using fewer locomotives increase from 474 miles with plans to install the technology — more than a 7% increase from with locomotive operators in real allow for train pace to be controlled also means using less material and on approximately 2,100 2016 — and marked the greatest time if locomotives need to be shut remotely. The MPP will also be energy on repair and maintenance. in 2016 locomotives to reduce Scope 1 number of miles traveled per gallon down to save fuel. integrated with train pacing and This was especially significant in emissions. We are also considering of fuel in our history. trip optimization capabilities that the winter when locomotives were expanded use of compressed Additionally, we invested in the generate data on the trip plan for stored rather than parked in idle natural gas — a cleaner option Automation Trip Optimizer tool, an automated each railcar and container on every states, preventing unnecessary fuel than diesel. As part of the transformation, we locomotive cruise control device single shipment. consumption of up to 4 gallons of gallon/ implemented multiple initiatives that helps locomotive engineers fuel per hour. kGTM Continued Investment to increase both efficiency and achieve optimal fuel burn by Locomotive Use 1.0 Between 2017 and 2019, as sustainability. automatically controlling speed and The CSX operating model has also These combined initiatives part of the transformation, CSX acceleration in real-time. In 2018, helped to significantly increase of improved trip optimization First U.S. Class I invested a total of $24 million into One of these initiatives is the newly CSX saved approximately 4 million environmental efficiency by technology and reduced fuel efficiency measures, including formed 24/7 Fuel Conservation gallons of fuel as a result of this reducing the number of trains locomotive fleet and usage railroad to cross this fuel increasing automation and Desk — a team that manages train program – increasing fuel efficiency needed to transport the same decreased total direct fuel usage efficiency milestone streamlining locomotive use. speed and efficiency on a minute- by 10%. The technology is operable amount of cargo. across all fuel types, as measured in by-minute basis. The team monitors for the life of the locomotive, which gigajoules, by more than 7% from As a result, CSX recorded its trains for speed and horsepower is typically 30 years. just 2018 to 2019.

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CSX Annual Energy Consumption2 (1,000 GJ) ENERGY PERFORMANCE Diesel remains the primary fuel type collaborating with industry partners to consumed by CSX, but the total research and identify new solutions Year Value amount consumed has decreased that will be the fuel of the future. significantly each year. We are 2016 70,066

2017 68,794 Electricity 2018 67,897 Total Energy Gasoline Consumed by Type Used Oil 2019 63,134 Jet Fuel Natural Gas Propane

CSX Annual Scope 1,2,3 GHG Emissions (1,000 metric tons CO2e)

Year Scope 1 Value Scope 2 Value Scope 3 Value

2016 4,775 229 301

2017 4,707 221 181

2018 4,649 205 154

2019 4,309 196 183

CSX Annual GHG Emissions Intensity Performance (metric tons CO e Total per MGTM3) 2

Year Value 63,133,899 2016 11.55 2017 11.49

2018 11.23

2019 10.80

2 Energy consumption includes all sources of direct and indirect energy 3 A gross ton mile (GTM) represents the movement of one ton of from fuels (diesel, gasoline, natural gas, propane, etc.) and electricity train weight one mile. GTMs are calculated by multiplying total train consumed inside the organization. weight by the distance the train moved.

Diesel

Values include direct and indirect (electricity) energy usage. Values based on energy/fuel consumed in gigajoules (GJ), where 1 gigajoule = 0.28 MWh.

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Materials CSX Recycles

Type of Material Unit of Measurement 2019 2018 2017 2016

Used oil Million Gallons 1.34 1.83 2.41 2.57

Batteries Short Tons 407 367 390 290

Steel Short Tons 159,460 157,306 326,428 205,695

Crossties Millions 2.64 2.25 2.11 3.00

Asphalt Short Tons 34,617 92,993 32,831 94,577

Concrete Short Tons 32,905 12,957 18,258 1,270

RECYCLING, REUSE, AND the program had collected 8,300 The primary activities involving water WASTE DISPOSAL devices and successfully diverted at CSX include washing locomotives more than 630,000 pounds of waste and other equipment and The majority of the waste CSX away from landfills — the equivalent suppressing dust. In order to reduce generates (such as scrap track of more than 150 cars. More than the amount of water used in these materials, tires and batteries) 70% of discarded laptops and 50% activities, we take care to track our derives from locomotive and of discarded desktops were able to water use and apply water reduction, equipment maintenance activities be refurbished and either resold or recycling, and reuse measures (e.g., required for ongoing operations. donated to those in need. In total, rainwater collection and recycling) CSX generates thousands of almost 98% of retired electronic wherever feasible. tons of recycled materials each assets were processed, resold, or year, maximizing recycling before For example, Zacker collaborated with the Operations recycled in 2019. For example, we invested in a multi- anything goes to the landfill. department to create No Spike Left Behind (NSLB) million-dollar water reuse project at program, which analyzes the design of railyards for the Curtis Bay Coal Pier. The project To reduce waste, we closely efficiency and sets up an inventory system to improve WATER MANAGEMENT increased the collection and use of monitor the amount of volumes material reuse or recycling and reduce surplus of storm water for dust suppression being generated at any given time, Our operational transformation material on railyards. NSLB resulted in more than activities instead of potable water. implement recycling and reduction has also led to environmental 4,450 tons of scrap metal being collected, producing Thanks to these types of projects, we measures wherever possible, and benefits – consolidation of facilities, approximately $500,000 in annual revenue. have been able to reduce our overall train employees on how to put locomotives, and other resources water use by 60% since 2016. recycling and reduction techniques means we need less water to Championing Environmental Action Zacker has also made major contributions to our into practice. accomplish our business objectives. hurricane preparedness plans. Hurricanes can With more than 25 years of experience in the damage the rail network and cause runoff or spills of These recycling and reduction environmental management industry, Brian Zacker is hazardous waste. As part of the preparedness plan, practices are also applied to Total Annual Water Consumption (millions of gallons) constantly reinventing operations to achieve better Zacker and his team developed a checklist for pre-and waste generated from our office environmental results. post-natural disaster considerations (such as turning activities. In 2019, we instituted a 2,001 off pumps, draining holding ponds to accommodate new e-waste buyback program in The regional manager of environmental field services excess water, bolting down tanks and checking for partnership with Urban Mining. As and a 10-year veteran of CSX, Zacker has a deep loose waste wranglers). The checklist system was 1,199 part of the program, CSX collects understanding of the company that has helped him used for the first time in August 2019 with Hurricane and separates e-waste so that identify innovative, cross-departmental solutions to Dorian, and CSX weathered the storm free of any 486 479 it can be refurbished, resold, or environmental and waste management problems. waste related issues or complications. recycled. By the end of 2019,

2016 2017 2018 2019

54 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 55 People Our Approach The CSX Talent Strategy Transforming Our Workforce Talent Acquisition Talent Development Total Rewards Employee Health & Wellbeing Employee Engagement Diversity & Inclusion

OUR APPROACH Our Administrative function includes dedicated Human “As CSX railroaders, we are Resources and Total Rewards departments that ensure Our business is fueled by the dedication of our proud of our role in keeping our the CSX talent strategy supports business objectives. employees and our shared commitment to be the These departments are responsible for workforce country and economy moving. best-run railroad in North America. Our people are the management, talent management and development, foundation of our success and keep us moving We embrace that being part employee relations, diversity and inclusion, and forward every day. That is why CSX offers rewarding compensation and benefits. Within Human Resources of a company driving industry careers with opportunities for learning, development and Total Rewards, we also have a dedicated Learning and progression, including a compelling total rewards transformation requires every and Development team that oversees employee package that fosters a culture where employees are training and professional growth, and a People and employee in every role to be a included and engaged. Analytics team that measures and evaluates our talent leader, have a service-mindset, strategy performance. In 2019, our Board of Directors’ Compensation and and an intense curiosity to Talent Management Committee expanded its oversight role beyond executive compensation to overall improve.” THE CSX TALENT STRATEGY human capital management, including reviewing the company’s leadership development, performance As part of our company’s transformation, we Diana B. Sorfleet, management, and talent acquisition programs, as well introduced a new talent strategy to better enable us to Executive Vice President and as expanded oversight of the company’s plans and attract, develop, and retain the best railroaders. The Chief Administrative Officer processes for promoting diversity, inclusion, and new strategy rests on four pillars: every position and pay equity. every person adds value; we value diverse experiences and skills; compensate our workforce well for their achievements; and motivate them to succeed.

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RIGHT ROLE, TRANSFORMING OUR TALENT ACQUISITION RIGHT ROLE, RIGHT DIVERSE EXPERIENCES WORKFORCE To be the best-run railroad in North NUMBER & SKILLS RIGHT NUMBER The business transformation America, we need the best people. Every position adds value Every person adds value Every position adds brought significant changes to We are fully dedicated to attracting value. our workforce. We eliminated top talent from different industries CSX Talent redundancies in work and and backgrounds to bring in critical redefined roles and expectations, expertise, diverse experiences and A primary objective of our talent resulting in fewer positions, less skill sets that position our company Strategy strategy is to ensure that every bureaucracy and faster decision- for sustained growth. Critical to position creates value. As part making, clearer accountability our ability to acquire top talent is of our approach to workforce and focus. We provided new our approach to hiring. From the planning, we closely examined WELL-COMPENSATED MOTIVATED TO SUCCEED opportunities to our employees, beginning of the hiring process, we positions and skill sets, as well as and in management alone, 472 want to ensure that every candidate Competitive pay and benefits Diversity, inclusion and the work needed for the future, to employees received promotions in has a positive experience with engagement make the company more agile and 2019. Of these promotions, 34% CSX. We provide our interviewers better positioned for growth. were union employees promoted with training in interviewing best to operations frontline supervisor practices and unconscious bias to positions. ensure that they are equipped to identify high-potential talent. We The CSX Workforce workers This phase of our transformation also train interviewers to acquaint strong has aligned our workforce to be top candidates with our wide range 20,908 well-positioned for future growth of craft and management career and industry leadership. opportunities as well as our unique Workforce diversity* Three generations Overall retention rate service-oriented culture. (*calculated as the percentage of our workforce of males of color and all females) 92.4% of overall Average age and years % % Gen X 20 workforce 68 of service of % % Gen Y 45 14.4 37 management 23 average age years of service Union new hires % of % Boomers 17 union 9 34% diverse Management new hires Management promotions 4% female 49% 21% 39% 24% diverse female diverse female Veteran and active duty military status

union 3,323 17,146 employees subsidiary veterans, active duty military, company and first responders management employees 470 % 3,292 employees 16 of the workforce

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DIVERSE each other and share their unique business transformation and align skills and expertise. In response all management employees to EXPERIENCES & to employee interest in greater focus on long-term performance of SKILLS development opportunities and the company. This is the first time increased communication with employees in these career levels Every person adds managers, we continue to offer received a stock award grant; value. formal development programs, extending our pay-for-performance instructor led learning, on line philosophy. learning and on the job training To ensure employees are opportunities. trained and supported, we have EMPLOYEE HEALTH AND WELL- implemented initiatives designed BEING to drive professional growth, WELL- further align our workforce with COMPENSATED We are committed to helping our our operating model, strengthen employees stay healthy through our talent pipeline and embed our Competitive pay and tools, resources, and support guiding principles. benefits. programs. Starting in 2019, we shifted our focus from physical wellness to an overall well-being CSX offers a competitive TALENT DEVELOPMENT approach with four key pillars — compensation and benefits Training in Action physical, emotional, social, and Development and Growth package for our railroaders to financial support. The basis for this Opportunities for All CSX help drive our recruitment efforts, In 2018, we introduced our Frontline Supervisor To foster a culture of integrity, respect and safety, shift is to adapt our offerings to Employees promote retention, and enhance Training. As part of the program, leadership facilitated we also unveiled a Professionalism Toolkit in 2019 an increasingly diverse workforce We are deeply committed to engagement in the organization. training sessions with both operations and non- to encourage meaningful discussions among with “a la carte” options instead of fostering a culture and workplace operations frontline supervisors that aimed to leaders, managers and employees, with new a “one size fits all” plan. Highlights where employees have a deepen their understanding of key organizational topics being added every quarter. As part of this include: meaningful work experience; feel TOTAL REWARDS messages, strengthen leadership development skills, initiative, employees can nominate leaders who have valued and supported; and have and empower them to impact change and deliver demonstrated professionalism and stand out. Each CSX’s total rewards packages › Enriched voluntary benefits the right tools and resources to results. The program is facilitated by Executive quarter, leaders are selected and recognized for their for our management and union that add flexibility and meet a be successful. We focus on skill Vice Presidents and Senior Vice Presidents and contributions. employees are designed to wider range of employee needs, development at all levels of the has already been completed by more than 70% of support employee recruitment, including accident, critical illness, organization through a combination frontline supervisors. We provide Service and Sales Training to Sales and retention, and engagement, as hospital indemnity, and a pet of work assignments, on-the-job Marketing professionals to continually strengthen their well as our short and long-term insurance program experiences and focused trainings, In 2019, CSX created a development program called skill sets, improve performance, and use cutting edge growth objectives as a company. › Tools and resources for which help our team members Switching Schools as part of an effort to maximize technology to promote CSX premier service. We regularly benchmark our employees with chronic acquire the necessary skills, knowledge, efficiency and safety surrounding compensation and benefits plans conditions, such as diabetes and experiences and competencies to switching operations, operating rules and procedural Based on employee feedback, we also focused on and offerings against railroad and hypertension take on increased responsibility. requirements for employees who were previously enhancing our Talent and Learning Management general industry standards to › Free access to Care@Work’s involved in human factor incidents. The two-day System by introducing mobile access capabilities ensure our total rewards remain at platform for finding child, elder From a skills development course encompasses classroom and outside field for employees to set and track performance and or above market. and pet care resources perspective, we adopted a 70- training scenarios and competencies that help development goals; complete online training courses; 20-10 model in which 70% of broaden employees’ overall rules and operational and ensure alignment with organizational goals and In 2020, to continue to motivate To learn more about CSX benefits, development comes from on-the- skillset and minimize the potential for any future expectations. management employees below visit our 2020 Benefits Summary job training, 20% from coaching reoccurrence. Employees attending the training the director career level, stock page. and mentoring, and 10% from have had a 95% success rate in the prevention of awards of performance units formal instruction. At all levels, we additional incidents. were granted to employees to encourage employees to learn from recognize their efforts during the

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MOTIVATED TO SUCCEED Diversity, inclusion and engagement.

Through inclusion and engagement initiatives, CSX works to ensure that employees feel they are part of the company culture and have a stake in the success of the business. The CSX management EMPLOYEE ENGAGEMENT workforce is 37% Our employees are at the core of diverse. Our unionized our success, so it is important that they are engaged in the business, workforce is 17% motivated to succeed and diverse, which places equipped with the skills necessary for their continued growth at the our overall diversity company. To foster engagement, at 20%. we have implemented mechanisms to ask employees how we can improve their experience and provide formal training programs to support their development. learned most recently that our formal diversity and inclusion a particular focus on disability Employee Feedback employees would like additional strategy to align with our corporate inclusion, women in field positions Our leadership is committed to a career development resources strategy, based on the recognition and military-friendly programs and “CSX sets high standards for an culture that empowers employees that include how we enhance that people are the foundation of policies, as well as ensuring that inclusive culture. We are committed to deliver value and reach their full our service mindset. We are our success and our commitment every position adds value. potential. To attain our vision to developing options that support to developing a culture that As we work to increase the to developing a diverse workforce be the best-run railroad in North their learning and engagement inspires employee engagement diversity of our workforce, CSX and leveraging everyone’s unique America, we want every employee and excellence. has built partnerships with to be motivated and inspired as a organizations such as the National backgrounds and skillsets for our contributor to our collective success. DIVERSITY AND INCLUSION While work remains to be done, we African-American Women’s collective success.” are proud of the strides that CSX Leadership Institute, SOAR, We understand that promoting a We recently conducted a broad- has made toward building the Wounded Warrior Project, diverse and inclusive culture — scale safety and culture survey to a diverse organization that and Generation W. Through our in which every employee is fully gauge employee engagement and celebrates different backgrounds partnerships, we create stronger Stephanie W. Noel, engaged and can reach his or her identify areas for improvement. In and experiences. With support inclusion, provide opportunities Vice President of Human Resources full potential — is integral to our addition, we gathered feedback from our leaders, we maintain our and resources for our workforce, and Chief Diversity Officer. future growth and success. To do through short pulse surveys to focus on working collaboratively and enhance our access to that, we need to reflect the track our progress. While we have with our employees, communities exceptional talent. communities in which we operate. made significant progress in our and partners to create a diverse In late 2018, we updated our efforts to be the best, we have and inclusive workplace, with

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CSX Named a “Best Place to Work for Disability Women at CSX Inclusion” We are committed to increasing women’s One of our proudest achievements in 2019 was being representation in the workforce through targeted recognized as a “Best Place to Work for Disability initiatives to attract, develop and engage female Inclusion” by Disability:IN and the American Association employees across CSX. of People with Disabilities after receiving a 100% score on their disability equality index. This recognition is the result of stated policies on disability inclusion, support “At the end of 2019, 22% of for disability initiatives in the company and community, management employees and healthcare benefits, and digital accessibility. 2% of union employees were Business Resource Groups women, accounting for 5.4% “I learned about SOAR through our General CSX’s business resource groups (BRG) are employee Manager Ray Canady and Human Resources initiated networks led by an executive-level sponsor to of CSX’s overall workforce.” Business Partner Tre Gamble,” said Amanda. promote a diverse, inclusive, and engaged workplace “The best experiences have been learning culture. These volunteer groups connect individuals about different leadership styles by studying with shared interests and experiences and are focused As we continue to identify opportunities to promote other leaders such as Martin Luther King, Jr., on initiatives that apply their perspectives to business CSX as an attractive employer and strengthen our and also learning from my peers’ experiences. imperatives. BRG members are actively involved in both recruitment and hiring efforts, we also prioritize Having the opportunity to meet women in community service and business initiatives for CSX and learning and development opportunities for women leadership roles in other industries, who are they are making a difference. at all levels of the organization through targeted facing the same challenges and opportunities, training opportunities. These include: has been helpful in my own personal › ABLE Disability Inclusion Group: development as a leader.” Promotes a culture that attracts and encourages › Women’s Leadership Development Program: individuals with disabilities to make a positive A 12- to 18-month program for women at the Amanda Dellinger, contribution to the company and society through senior leadership level that focuses on individual Trainmaster, Buffalo Terminal, Northeast informational sessions, volunteer events, and leadership capabilities, improving overall business Region Operations awareness campaigns. acumen, and developing a shared point of view on how to build a culture of sustainable results. › African American Inclusion Group: Aims to build and sustain a community of African › Events through Interchange Women’s American employees; foster a culture of inclusion; Leadership Network: and support African American representation in the Events that foster mentorship and provide company through community outreach, professional opportunities to learn from other female leaders development and networking events. through our business resource groups.

› Asian Professionals for Excellence: › Strategic Partnerships: Helps build a network of support for Asian American Formal training programs for women in our professionals in the CSX community; promotes a better workforce developed in collaboration with SOAR, understanding of the diverse cultures of the Asian National African-American Women’s Leadership continent among the workforce; and helps recruit and Institute, and Generation W. promote top Asian American talent at CSX.

› Interchange Women’s Leadership Network: Supports the growth and professional development of women at CSX through networking, mentoring, and other learning opportunities, including career development panels and “Lunch and Learns” with senior leadership.

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CSX’s Ryan Walker presenting to 20 veterans at a Wounded Warrior Project informational hiring event.

local veterans employment representatives, student veterans groups, professional military associations and veteran’s service organizations to support a robust pipeline of service talent.

In the fall of 2019, we relaunched our Count Me In campaign to encourage employees to self-identify either military or disability status. This confidential information helps us create strategies that improve and measure our progress toward our diversity programs; support our recruitment and retention efforts; and better tailor programming to employees’ unique needs and interests. CSX’s Chief Information Officer Brandt is involved in many organizations that focus on encouraging and engaging the next generation of Named One of “Most Admired professional women. She is on the Board of Directors Women Leaders in Business” of Railinc, Northeast Florida Regional STEM2 Hub, and Dreams Come True. She also serves on the executive From the Military to CSX: A Shared advisory board of the Jacksonville University Davis Kathleen Brandt Culture of Dedication, Commitment, College of Business, is a sponsor of SOAR, and is Senior Vice President of Technology and Chief involved with the National African American Women’s and Discipline Information Officer Leadership Institute and Women in IT. Carl Walker Kathleen Brandt began her career at CSX in 1985 as Chief Engineer, Communications and Signals a software developer. Over the years, she progressed Our Commitment to Veterans, Military, to positions of increasing responsibility across many and First Responders Carl Walker began his career at CSX in 1999 as a became interested in working for a railroad, more functions within CSX Technology, gaining a unique We pride ourselves on being a military-friendly manager of communications solutions in technology specifically, CSX, after his retirement. “What I like perspective of railroad operations and eventually company and celebrating our military population. following 22 years of service in the U.S. Navy. about going from the military to CSX is that the earning a leadership role as senior vice president of We are honored to have more than 3,300 veterans, Walker held various roles with increasing levels of organizational structure is very similar,” he said. technology and chief information officer. active-duty military and first responders at CSX. responsibility at CSX before becoming chief engineer, Together they form approximately one-fifth of the communications and signals. “Working for CSX, particularly in operations In 2019, Brandt was named one of the “Most Admired CSX workforce. and engineering, you need a high level of Women Leaders in Business” by Insights Success, Walker began his military career as an enlisted service dedication, commitment, and discipline which recognized her leadership and strategic vision We actively seek veteran, military, and first responder member in communications and was commissioned in order to effectively execute the various in guiding CSX’s delivery of technology solutions to candidates for CSX positions. In 2019, we increased as an officer in 1989. He completed three deployments projects.” increase service agility, reliability and — above all — our focus on sourcing, and recruiting talent among the to the Persian Gulf on the U.S.S. George Washington safety. service population. In addition to engaging with our during Operation Iraqi Freedom and the Gulf War. Carl is also the sponsor of the African American Pride in Service partners, we created relationships with He learned about CSX while in the military, and Inclusion Group at CSX.

66 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 67 Communities Our Approach Pride in Service Our Hometown Disaster Relief Employee Giving & Volunteerism

OUR APPROACH Our headquarters in Jacksonville, Florida, and much of our rail network are near military bases and areas with Service defines CSX including service to our high concentrations of military families. And in every customers, service to each other and service to our town along our routes are heroes who serve or have communities. Across our 23-state network, we serve served their community and their country — whether communities through monetary and in-kind giving as they are police officers, firefighters, National Guard well as the dedicated and passionate volunteer work members or veterans returning to civilian life. These of our employees. In 2019, CSX contributed more heroes have faced danger and hardship in the line than $10 million and nearly 9,000 volunteer hours of duty as well as on the home front. These include to our communities. financial struggles, disconnection and isolation from civilian communities.

PRIDE IN SERVICE CSX employees know these challenges well. One in every five CSX employees has a service background. A New Approach to Community Investment The cultural connection between service and As we reinvented our operations over the past railroading is deep. Additionally, we employ our own several years, we also reexamined our approach to CSX police force and hazmat team, more than 100 community investment. We wanted to ensure that employees strong. our contributions served the critical needs of our communities; connected to our business and values; Our Commitment to Those Who Serve and aligned with our employees’ passions. With Through Pride in Service, each year we connect these goals in mind, on the eve of Veterans Day 2018, thousands of servicemen, servicewomen and family CSX launched Pride in Service, a company-wide members with the support they need — when they commitment to honor and serve those who serve our need it and where they need it. country and our communities – our nation’s veterans, active military, and first responders.

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As part of the initiative, we partner with the nation’s leading veteran, military, and first responder organizations. Our founding partners include Blue Star Families, Operation Gratitude, Operation Homefront, First Responders Children’s Foundation, and Wounded Warrior Project — each of which addresses a unique area of need within the service community.

In its first year, Pride in Service reached more than 85,000 servicemen, servicewomen, and family members.

Together with these organizations, we provide support in three areas: financial assistance, community connections, and gratitude.

Financial Assistance Service can bring about financial struggles — both during service and when a service member returns home. Most military families do not have a second income and often struggle to make ends meet. First responders are frequently injured on the job, resulting in significant time away from work. Nearly 1.5 million veterans live in poverty nationwide.

CSX provides critical financial assistance to hundreds of service families in the moments they most need it. With the help of the First Responders Children’s Foundation, in 2019 we provided 28 life-changing scholarships to children of fallen or injured servicemen and servicewomen. In partnership with Operation Homefront, we helped give more than 1,000 critical- relief grants that alleviate families’ urgent financial pressures and mitigate the financial burden of joyful times of transition or periods of heavy expenses. Together, we connected more than 100 expectant mothers with the supplies and support networks they need to care for a newborn and helped nearly 2,000 families get back-to-school supplies and prepare for the classroom.

CSX’s one-of-a-kind locomotives — the Spirit of our Law Enforcement, the Spirit of our Armed Forces, and the Spirit of our First Responders — that symbolize our gratitude to those who serve.

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“In 2019, Operation Gratitude “We’re so grateful to CSX “The CSX-Blue Star Families “We are incredibly proud to be part “Because of CSX, First Responders achieved unprecedented for their commitment to partnership has provided of CSX’s innovative Pride in Service Children’s Foundation has been results in its 17th year as a serving wounded warriors extraordinary value to military initiative, through which CSX and able to award important grants to nonprofit. Our ability to scale and their families through families across the country, their employees help us help military first responder agencies and life- operations and reach can Wounded Warrior Project enabling Blue Star Families to families who are facing unexpected changing scholarships to children be attributed in large part Carry Forward. Their support open new chapter locations in financial hardships. With their of first responders. Thank you, CSX, to our partnership with CSX has been instrumental in places that need them most.” continued support of our highly for your tremendous dedication and their amazing employees bringing these events to valued programs, we are able to and support of first responders who volunteered in a hands- life – putting our mission in Kathy Roth-Douquet serve those who have done, and and their families. The partnership on way and helped us make motion through the power CEO and Board President of continue to do, so much for all of us.” has also helped respond to the a difference for more than and passion of communities Blue Star Families COVID-19 pandemic through our 370,000 military, veterans, across the country.” Emergency Response Fund, Mask & Brig. Gen. (ret.) John I. Pray Jr. and first responders in PPE program, and First Responder President and CEO of Operation communities nationwide.” Mike Linnington Happy & Healthy Child Program.” Homefront CEO of Wounded Warrior Kevin M. Schmiegel Project Jillian Crane CEO, Operation Gratitude President, First Responders Children’s Foundation

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Nashville, TN: CSX volunteers participated in a CSX-sponsored New York, NY: CSX supported the First Responders Children’s Foundation Annual Thanksgiving Day Parade Wounded Warrior Project Carry Forward 5K in September 2019 to Breakfast, hosting current scholarship recipients and their families from across the country and announcing a raise funds for veterans in need. scholarship in honor of NYPD Detective Luis Alvarez, who passed away from a 9/11-related illness.

Baltimore, MD: CSX and Blue Star Families hosted local Jacksonville, FL: CSX and Operation Homefront hosted Cincinnati, OH: Operation Gratitude and CSX joined forces in military families for a day at the B&O Railroad Museum in July a Back-To-School Brigade event in August 2019, at October 2019 to assemble 10,000 care pouches for first responders 2019 in celebration of the launch of a new CSX-sponsored which CSX volunteers packed 250 backpacks filled with and active-duty service members in the Cincinnati area. Blue Star Families in Baltimore. school supplies for local children of military families.

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Paying It Forward: In Service of Service

Steve Hannesson Director of Safety and Operating Practices-Northeast Region

At age 17, I joined the Army Reserves after graduating Community Connections activities to foster relationship- letters of gratitude. We worked with delivered to my troops in a different way. While I had a from military high school. As chance would have it, Too often, service families feel building, including civilian-service Wounded Warrior Project to launch supportive family back home and the means to obtain I was accepted to the police academy on the very isolated from civilians. A majority reading programs and book clubs; Carry Forward 5K run or walk the resources I needed while deployed, some of the same day CSX offered me my first position. While of military families do not feel they free and low-cost opportunities events — community fundraisers younger men and women weren’t as fortunate. These I would have been happy to join law enforcement, belong in the communities where for family events, museum visits designed to bring together civilians care packages and the items inside were truly a lifeline I grew up in a railroad family and was even more they live, and 92% of military and cultural tours; hiking and with those who served. In 2018 and for some of them. Both times, I realized how simple excited to take after those I looked up to. I elected families feel the public does not outdoor recreation opportunities; 2019, CSX employees ran side by acts of gratitude could go an extremely long way. to remain a reservist, however, and I was called to understand their sacrifices. wounded warrior caregiver peer side with veterans and their families serve as a military policeman in Bosnia in 1997 before support; military spouse walking in Jacksonville and Nashville to In those moments, I’m not sure I expected I’d ever returning to CSX. Since then, I’ve been deployed to To help military families gain a groups; and other civilian-military recognize their service and raise be in a position to pay forward that gratitude that El Salvador, Afghanistan, Romania, and more — and sense of belonging and to bridge engagement programs. needed funds for the cause. I was so generously shown. I certainly couldn’t after each deployment, I’ve returned to CSX fully the service-civilian divide, CSX have predicted that, five years later, I’d be standing supported. No matter which “tour of duty” I was on, works with Blue Star Families to Gratitude While Pride in Service is a long- side by side with my CSX coworkers in Baltimore, each role built upon the last, allowing me to expand support thousands of families We come together as CSX term CSX commitment, we MD assembling care packages for local city first upon my leadership and technical skills. in select communities in need. employees to show our immense set an initial goal to positively responders. When I heard CSX was organizing this

In 2019, we partnered to host respect, honor, and appreciation impact more than 100,000 opportunity through Pride in Service, there was just no While deployed, I received an Operation Gratitude nearly 200 community events, for those who serve. With heroes and family members by way I would not be there. care package on two occasions — once in reaching more than 30,000 family Operation Gratitude, we packed the end of 2020. Through 2019, Afghanistan and once in Romania. As a younger man members and their neighbors, more than 43,000 care packages we had already reached 85,000 The Baltimore assembly brought our CSX team in Afghanistan, I’ll never forget the personal comfort across the CSX-supported chapter with more than 1 million items servicemen, servicewomen and together in service of others and gave me the chance that package gave me. The idea that a stranger cared locations in Baltimore, Maryland; for 27,800 military members, family members in all 11 branches to volunteer alongside my wife, an active member of about me back home enough to send me a gift was Tennessee; Chicago, Illinois; and 3,800 veterans, and 12,200 first of the military, deployed in 35 the National Guard, and my two boys, passing the incredibly touching and really helped get me through Jacksonville, Florida. In these responders and sent more than countries, across all seven seas spirit of service down to the next generation. a difficult time. In Romania, several years later, I areas, we also support year-round 2,000 CSX employee-written and in all 23 states we serve. appreciated the Operation Gratitude care packages

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OUR HOMETOWN Employee Gift Matching: In 2019, we launched a matching gift program in As an engaged member of our hometown community, which we match dollar-for-dollar any donation made we are dedicated to supporting the unique needs by a CSX employee to a 501(c)(3) organization of the of the Jacksonville area through Pride in Service, employee’s choice, up to $1,000. Community Service Grants, and enthusiastic

employee volunteerism. In addition to serving Board Service: Jacksonville through our Pride in Service partners, in CSX executives are eligible to serve on nonprofit 2019 we supported a number of other organizations boards of their choice through the CSX Foundation critical to Greater Jacksonville, including the Board Service program. The Board Service program Jacksonville Wolfson Children’s Hospital, the North contributes to the organizations with which CSX Florida Chapter of JDRF, Northeast Florida Regional executives are affiliated and provides counsel and STEM2 Hub, the Jacksonville Symphony, and St. guidance for CSX executives looking to become Johns Riverkeeper. involved with a nonprofit board. In 2019, more than a third of CSX executives participated in the program.

DISASTER RELIEF

When Hurricane Dorian made landfall in September 2019, CSX and our employees provided aid to affected families through our long-time partner, the American Red Cross. To support employees affected by the storm, we also provided assistance from the CSX Employees Disaster Relief Fund. Created following Hurricane Katrina in 2005, the fund supports employees during catastrophic events to help alleviate disaster-inflicted financial expenses, such as property loss and medical bills.

EMPLOYEE GIVING & VOLUNTEERISM

CSX employees give generously to their communities, both through CSX community partners and through the organizations that mean the most to them and their families. We offer several programs to support CSX employees in giving back.

Dollars for Doers: When a CSX employee volunteers at least 15 hours, the CSX Foundation donates $10 per hour volunteered, up to 40 hours, to an eligible organization of the employee’s choice.

78 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 79 Governance Our Approach Board of Directors Business Ethics Shareholder Outreach and Engagement Executive Compensation Risk Management and Business Disruption Prevention Responsible Sourcing Human Rights Human Trafficking

OUR APPROACH For more information, CSX’s Corporate Governance Guidelines are available on our website. CSX has a comprehensive governance and compliance program that guides how we coordinate and implement our company policies, procedures, and values, as well as how we monitor adherence to laws and regulations. Our Executive team and our Board of Directors are responsible for developing and communicating the CSX vision and purpose, and oversee the implementation of good governance practices.

Key elements of the CSX governance program include:

› Annual election of directors › Majority voting standard for election of directors › Independent chairman of the board › Stock ownership guidelines for officers and directors › Policy against hedging and pledging of CSX shares › Proxy access › Pay-for-performance alignment

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BOARD OF DIRECTORS long-term growth and success. mitigating against unnecessary (left to right) * In 2019, our board comprised risk. All directors are elected on At CSX, our corporate governance Donna M. Alvarado Board Highlights of 11 individuals with diverse an annual basis. starts with our Board of Directors, Founder and President of Aguila backgrounds and experiences. which is charged with the International Each member of the board plays More information about our Board responsibility of understanding a critical role in developing the of Directors can be found in our Pamela L. Carter the opportunities and challenges company’s long-term strategy to 2020 Proxy Statement and on our (retired from CSX Board on years across our business and making 7.0 deliver sustainable shareholder Board of Directors page. May 22, 2020) | Retired President of decisions that drive the company’s value, while monitoring and Cummins Inc. and President of Cummins Average director tenure Distribution Business

James M. Foote President and Chief Executive Officer of CSX 64.9 years Steven T. Halverson Average director age Retired Chief Executive Officer of The Haskell Company

Paul C. Hilal Gender diversity: Founder and Managing Member of Mantle Ridge GP LLC

John D. McPherson Retired President and Chief Operating 36% Officer of Florida East Coast Railway Women directors David M. Moffett Retired Chief Executive Officer and a Director of the Federal Home Loan Board size and independence: Mortgage Corporation • 9 out of 11 directors Linda H. Riefler Director of MSCI and Former Chairman are independent of Global Research for Morgan Stanley

Suzanne M. Vautrinot • Independent chairman President of Kilovolt Consulting, Inc. and of the board Retired U.S. Air Force Major General

James L. Wainscott Retired Chairman, President and Chief Executive Officer of AK Steel Holding Corporation (joined July 8, 2020) 83% J. Steven Whisler Meeting attendance Retired Chairman and Chief Executive Officer of Phelps Dodge Corporation

John J. Zillmer Other public company boards: Chairman of the Board and Chief Executive Officer and Director • 1.5 average board positions of Aramark Corporation *as of December 31, 2019

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BUSINESS ETHICS through which employees are For more information about our Risk Oversight Process encouraged to anonymously executive compensation practices, The CSX Code of Ethics is a report code violations or other please refer to our 2020 Proxy guiding standard for ethical ethical concerns. In 2019, we did Statement. behavior at all levels of our not experience any significant company, including all employees violations to the code. Business & Enterprise Board of and officers of CSX and its wholly- RISK MANAGEMENT AND Functional Risk Directors/ owned subsidiaries, as well as BUSINESS DISRUPTION Leaders Management Audit members of the Board of Directors SHAREHOLDER OUTREACH PREVENTION Team Committee and partners conducting business AND ENGAGEMENT with or on behalf of CSX. As an integral link in the Manage Day-to-Day Identifies and Provides Strategic To ensure that our company transportation of goods that Activities Monitors Risks Oversight of Risks The code covers matters such wholly understands and businesses and consumers need as conflicts of interest; insider represents our shareholders’ day to day, we must anticipate trading; confidential information interests, we conduct shareholder risks and prepare for any misuse; compliance with laws outreach throughout the year disruption to our business. We CSX Risk Universe and regulations; discrimination and communicate thoughts and have robust measures in place and harassment; whistle-blower considerations to our board. to predict and manage risks and protection; public and employee Our senior leaders and subject- ensure continuity of our operations. safety; and proper use of corporate matter experts meet routinely with In 2019, we invested $1.7 Compliance Risks External Risks Strategic Risks assets. representatives from institutional billion in capital expenditures to shareholders and periodically with maintain and improve our existing We provide ethics training proxy advisory firms. We also invite infrastructure and help prepare for throughout the year, which shareholders and other interested any eventualities. is required for all of our parties to industry and investment any short- or long-term scenarios from performing preventative Cyber and Information Security management employees and community conferences, investor The board’s Audit Committee where climate change and other maintenance to limiting Management highly recommended for union road shows, and analyst meetings. oversees our risk management types of disruption may impact service disruptions, to forming As it is for all organizations employees, on applying the strategy. This includes oversight of operations or safety. To mitigate relationships with first responders in today’s society, cyber and code in all daily interactions. CSX’s Enterprise Risk Management the physical risk of climate- and sharing resources with information security is a priority We additionally provide a 24/7 EXECUTIVE COMPENSATION program, through which business related extreme weather, we communities in need. for our business. The protection of CSX Ethics Helpline, operated and functional leaders collaborate have established comprehensive customers’ personal information, CSX provides competitive by an independent service, to identify, assess and monitor business plans that are designed In September 2019, CSX’s as well as the integrity of our total compensation in line risk, as well as implement needed to ensure continuity of train hurricane preparation was put to own operations, is of the highest with general market practices. mitigation actions. operations and the adaptability of the test as tropical storm Dorian importance. In 2019, to provide Our Compensation and Talent 2019 Ethics CSX’s network. transformed into Hurricane Dorian added strategic guidance in this Management Committee is Our approach to risk management and began to threaten the Eastern area, Suzanne M. Vautrinot, retired Data Highlights responsible for reviewing CSX’s focuses on activities we can We constantly work to strengthen Seaboard of the United States. U.S. Air Force major general annual and three-year business Management Employees control as well as those we cannot. our network to protect us from CSX’s core leadership team and and president of a cybersecurity plans and global economic Trained climate-related impacts, such key decision makers worked to strategy and technology consulting forecasts to set appropriate Network Resiliency and Climate- as hurricanes or flooding, which forecast impacts and to allocate firm, joined our board. and challenging performance 100% Related Risk Management can potentially cause damage resources across the East Coast goals for our Executive team. To Under our centralized enterprise to the CSX infrastructure and to respond to operational needs Through our Information Security further drive safety outcomes Union Employees Trained risk management processes, result in service interruption, train and protect company assets. By team, we equip our systems with and accountability, in 2019, we we have integrated a multi- accidents, or other operational making extensive preparations the latest cybersecurity tools, added safety performance metrics 75.3% disciplinary, company-wide climate difficulties. for the potential effects of the provide cybersecurity information to our management incentive change strategy that evaluates all storm and proactively notifying to all employees, require annual Ethics Helpline Calls compensation plan. types and sources of risks and CSX’s operations and public safety impacted customers, we were able cybersecurity awareness trainings, 1,066 opportunities. CSX applies an departments play critical roles to minimize delays and service internal methodology to evaluate in weather event preparedness, interruptions.

84 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 85 Governance and encourage employees to Policy. To that end, we offer the U.S. DOT is enlisting the help report any suspicious or unusual opportunities for all suppliers, of the transportation sector to behavior observed on or around regardless of any social or combat human trafficking because the use of electronic resources to economic distinction, such as age, transportation employees are the CSX Information Technology race, creed, color, sex, ancestry, often in a position to spot potential Service Desk. We also regularly or national origin. While we do victims. The agency notes that as collaborate with the Association of not award suppliers based on many as 24.9 million men, women, American Railroads and industry preferences that would result in and children are held against their peers to exchange relevant threat unfair competitive advantages over will and trafficked, yet the victims intelligence, share best practices, other suppliers, we are committed of human trafficking are often and advance the overall industry to actively seeking and engaging hidden in plain sight. approach to this issue. diverse suppliers to compete for opportunities to support CSX. “Identifying the victims is one of As part of our October the most significant challenges Cybersecurity Awareness Month faced by law enforcement when campaign, we introduced a new HUMAN RIGHTS combatting human trafficking,” said training course that provides Sean Douris, CSX chief of police, Over the past several years, human critical tips and guidelines to help at the initiative’s public launch. rights has become an increasingly employees better protect CSX “Leveraging partnerships like this material issue to CSX and to CSX systems and information from within the transportation sector stakeholders. To further advance people who create online crimes. exponentially increases the number our commitment to upholding of eyes that are trained to look for human rights in our operations, Recently, we rolled out a new those signs and helps reach the businesses, communities, and cybersecurity platform that ultimate goal of eliminating human supply chains and to ensure provides employees with fast, trafficking.” compliance with all regulations, we secure access to internal resources are in the process of developing a and information from any location. Key indicators of human trafficking formal CSX Human Rights Policy. In 2019, we experienced zero include an individual’s physical We expect to release this policy information security or other state, demeanor, behavior and later this year. cybersecurity breaches. work conditions.

The Department of Transportation’s HUMAN TRAFFICKING RESPONSIBLE SOURCING Transportation Leaders Against In January 2020, CSX joined a Human Trafficking initiative is We view our suppliers as an U.S. Department of Transportation comprised of transportation extension of our company — initiative to fight human trafficking and travel industry stakeholders equally dedicated to environmental through increased education and working jointly to maximize stewardship, high ethical public awareness. their collective impact. The standards, and diversity. We work partnership focuses on five key with approximately 4,900 suppliers CSX signed the U.S. DOT areas and connects transportation domestically and internationally. “Transportation Leaders Against stakeholders to available resources We expect all of our suppliers to Human Trafficking Pledge” on industry leadership; industry adhere to the CSX Code of Ethics. and committed the company’s training and education; policy support to help raise awareness development; public awareness; Through our Supplier Diversity and collaboration across the and information sharing and Program, CSX is committed to transportation sector. analysis. procuring all materials, supplies, Through its “Put the Brakes on and services in alignment with Human Trafficking” campaign, our Diverse Supplier Procurement

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MATERIALITY ASSESSMENT 1 Identify relevant topics and develop measurement criteria. In early 2020, we conducted a new materiality Understand current practices and assessment to identify the environmental, social and industry trends, benchmark, and governance topics of highest priority to CSX and its determine topics. stakeholders. Our process included reviewing multiple ESG reporting frameworks and guidelines, such as the United Nations’ Sustainable Development Goals, Assess how topics influence Global Reporting Initiative, Sustainability Accounting 2 external stakeholder decisions. Standards Board and the Task Force on Climate- Identify relevant stakeholder groups related Financial Disclosures. We also reviewed our and gather survey feedback. ESG ratings and rankings; benchmarked 10 peer companies; and conducted a media analysis to identify 26 potentially material topics. We then Assess how topics impact CSX’s evaluated topics through surveys of 693 internal and 3 business. external stakeholders, including employees, union Engage leadership and internal members, customers, suppliers, investors, nonprofit stakeholders through a facilitated organizations, and others. workshop and survey.

This exercise led to a prioritization of the issues most material to our business and stakeholders, which were Report results and seek alignment. then scored from critical importance to low importance 4 Consolidate results and develop and combined into an average score. The results of recommendations. our materiality assessment are displayed in the matrix below.

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Materiality Matrix CSX Priority Material Topics

5.00 Topic Definition Hazard Management & Ethical Business Emergency Preparedness Conduct Delivering excellent Delivering reliable, responsive, and cost-effective logistical services to CSX’s existing and future customers. Employee Health & Wellbeing Delivering Excellent customer service Customer Service s Compliance with Legislation & Conducting business in an ethical manner and maintaining controls to prevent corrupt practices such as Regulations Ethical business bribery or collusion, as well as maintaining a responsible tax strategy. Governance & Risk Management conduct Accessible & Transparent Communications eholder Business & Model Employee & Protecting the safety of CSX’s employees and the communities that reside in the vicinity of our operations Water Management Employee and Disruption Community through the maintenance of effective management systems, training, developing a culture of safety, and Recycling, Reuse & Waste Disposal Safety community safety 4.00 minimizing disturbances from noise, vibration, and land use in the areas in which we operate. Cyber & Information Labor Rights Security Hazard management Managing the hazards present in operational processes, including those from goods being transported, by Local Economic Impact Talent Management maintaining effective controls and critical incident emergency response procedures, and ensuring that employees and emergency Inclusion & Diversity and local first responders are trained in these procedures. preparedness Supply Chain Management Human Rights Clean AirI Innovation Physical Security Importance to Stak Community Involvment & Employee health Supporting the holistic wellbeing of CSX’s employees and their ability to perform their roles to their greatest Philanthropy Physical Impacts of Climate Change and wellbeing capacity by providing the benefits, resources and flexibility to improve their health, care for others and Biodiversity manage their work and home lives. Lobbying & Government Relations

3.00 Cyber and Maintaining effective cybersecurity infrastructure and data protection controls. 3.00 4.00 5.00 information security Importance to CSX Compliance with Managing compliance with existing and emerging legislation and regulations. legislation and Governance Topics Social Topics Environmental Topics regulations

Energy and fuel Managing energy consumption, fuel use, and greenhouse gases (GHG) emitted through CSX’s operational activities by implementing energy, fuel, and GHG management and reduction measures, and providing efficiency business partners with transport services that enable them to lower their value chain greenhouse gas emissions.

Conducting business in an ethical manner and maintaining controls to prevent corrupt practices such as Talent management The following table defines the Findings of the 2020 materiality Issues that increased significantly bribery or collusion, as well as maintaining a responsible tax strategy. top 12 material topics, or those assessment were relatively in importance in the 2020 with an average score above 4.0, consistent with our previous assessment include employee Physical security Protecting the safety of CSX’s employees and the communities that reside in the vicinity of our operations through the maintenance of effective management systems, training, developing a culture of safety, and identified through our materiality materiality assessment, conducted health and well-being, cyber and minimizing disturbances from noise, vibration, and land use in the areas in which we operate. assessment process. These topics in 2016. Both assessments information security, and fuel are discussed in further detail flagged excellent customer and energy efficiency. We have Business model Anticipating, managing and responding to disruptive impacts that affect CSX’s strategy, business model, throughout this report based on service, ethical business conduct, increased our disclosures on these and operations. These impacts may include emerging climate-related policy, legal, technological, market, disruption these definitions. and employee and community topics in this report. or reputational risks, such as changes in customer preferences, and the emergence of new competitors or safety as top priority issues. technologies.

Governance structure and practices that enable effective oversight of strategy, risk management. Governance and risk management

90 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 91 ESG Fundimentals Stakeholder Engagement Stakeholder Engagement value for each of them over the In addition to these activities, CSX Each of our stakeholders short- and long-term. understands our stakeholders are — employees, customers, interested in specific ESG topics. Stakeholders Issues of Highest Importance Engagement Channels communities, suppliers, investors, We actively engage with Along with this 2019 ESG Report, nonprofit organizations — is stakeholders throughout the year we make this information available Employees Employee and community safety, Materiality survey, materiality facilitated essential to our business. We using a variety of channels that through our CDP report and other are committed to engaging range from informal (e.g., one-on- publicly available documents, delivering excellent customer service, workshop (management and leadership), regularly with our stakeholders one conversations) to formal (e.g., including the CSX annual report ethical business conduct, cyber and surveys (e.g., safety and culture survey, to understand their views and materiality survey). We use these to and proxy statement. information security, energy and fuel pulse surveys), trainings (e.g., Frontline expectations and to best deliver both solicit feedback and provide efficiency Training Program), Talent and Learning relevant updates. Management System, CSX Ethics Helpline, business resource groups, company’s intranet (Gateway)

Investors Ethical business conduct, governance Materiality survey, quarterly earnings and risk management, accessible and conference calls, industry and investment transparent communications, compliance community conferences, investor road shows, with legislation and regulations, employee analyst meetings and investor relations and community safety department outreach

Customers Employee and community safety, Materiality survey, safety brochures, delivering excellent customer service, e-business tools, Customer Advisory ethical business conduct, compliance Council, events and trade shows, semi- with legislation and regulations, annual customer engagement forums, J.D. hazard management and emergency Power surveys, Trip Plan Performance tool, preparedness individualized business unit outreach, visits to customers sites/ headquarters, Chemical Safety Excellence Awards

Suppliers Delivering excellent customer service, Materiality survey, Customer Service ethical business conduct, compliance with Excellence & Partnership awards, legislation and regulations, employee and procurement and supply chain management community safety, hazard management department outreach and emergency preparedness

Community Ethical business conduct, community Materiality survey, annual volunteer safety (Residents & involvement and philanthropy, inclusion efforts, ongoing communication with Pride in Nonprofits) and diversity, employee and community Service core partners, community volunteer safety, employee health and well-being events, CSX’s PSCC hotline

Others Delivering excellent customer service, Materiality survey, emergency responder (Emergency employee health and well-being, cyber training, AskRail mobile app, direct responders, and information security, employee and interactions Union community safety, water management, members, ethical business conduct, supply chain Industry management, human rights associations)

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“We strongly believe that transparent reporting is a key component of building strong relationships with our stakeholders. This ESG report is an important part of that transparency, as it encourages and informs our dialogue with stakeholders on how CSX can deliver greater societal, environmental and financial value.”

Bill Slater Head of Investor Relations

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Business & Governance Safety & Security

Business & Governance Safety & Security

Data Unit 2019 2018 2017 2016 Data Units 2019 2018 2017 2016

Total Revenues $ Billions 11.9 12.3 11.4 11.1 Network Maintenance

Carload Volume by Market (in carloads) Ties replaced # Millions 3.02 2.66 2.58 2.76

Merchandise # Millions 2.7 2.7 2.7 2.8 Rail replaced Miles 996 866 914 874

Coal # 843,053 886,870 854,942 825,110 Ballast installed Million tons 2.1 1.9 1.6 1.6

Intermodal # Millions 2.7 2.9 2.8 2.8 Existing rail surfaced Miles 4,712 4,408 4,098 4,591

Supplier Data Public Safety

Number of suppliers # 4,902 5,277 5,915 5,273 Safety train stops # 13 13 9 15

1 Hazmat Responder training Diverse suppliers - spend $ Millions 90.3 60 ~120 148 # 3,353 3,385 3,096 6,844 provided Diverse suppliers1 - number of # 131 151 ~250 ~250 businesses Closed crossings # 169 155 453 512 Frequency of internal railway CSX Ethics Helpline # 2.85 integrity inspections3 Total cases handled # 1,066 1,091 1,239 1,393 Incidents Fraud-related investigations # 41 44 84 100 FRA Personal Injury Rate4 Injury Rate 0.89 1.04 1.23 1.05 Ethics Training Participation Accident FRA Train Accident Rate5 2.32 3.66 3.11 2.82 Rate Management employees % 100% 100% 100% 100% Work-related fatalities # 2 2 2 0 Union employees trained % 75% 24% 52% 77% Fatal trespassing incidents # 72 77 68 74 Capital Expenditures Non-fatal trespassing incidents # 91 85 85 81 Total Investment $ Billions 1.7 1.7 2.0 2.7 Crossing accidents # 345 356 344 345 Cybersecurity Total Recordable Incident Rate Number of information security Incident Rate 0.88 1.01 1.23 1.05 # 12 10 4 3 (TRIR)6 incidents Fatality Rate7 % 0.01% 0.01% 0.01% 0.00% Number of information security # 0 0 0 0 breaches Number of accidents and # 847 1,018 1,035 1,019 incidents 8 Additional Metrics Number of accident releases Average locomotives per year # 3,561 3,898 4,166 4,400 and non-accident releases of # 46 56 75 70 hazardous material9 Average active trains per day2 # 1,848 1,930 2,163 2,345 Number of FRA Recommended # 613 596 755 588 Violations10 Number of FRA Recommended # 37,098 33,368 37,072 33,626 Defects11

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Employees

Employees Employees

Data Units 2019 2018 2017 2016 13 Data Units 2019 2018 2017 201613

Snapshot Data Management Promotions

Total full-time employees # 20,908 22,475 24,006 27,288 Diverse12 % 39% 40% 36% 42%

Management employees # 3,292 3,427 3,440 4,507 Female % 24% 27% 23% 27%

Union employees # 17,146 18,590 20,076 22,270 Number of promotions # 472 407 679 389 % of promotions from union Subsidiary company employees # 470 458 490 511 % 37% 44% 15% 17% workers Overall retention rate % 92% 91% 87% 90% Veteran and Active Duty Military Status Union New Hires Number of veterans, active duty # 3,323 3,607 3,738 4,327 military and first responders Diverse12 % 34% 31% 32% 30% Percent of total workforce % 16% 17% 16% 16% Female % 4% 2% 3% 4% Employee Reviews Workforce Diversity Formal performance reviews for # of reviews 3,292 3,427 3,343 2,074 Overall Workforce % 20% 20% 20% 21% management employees Frequency of formal performance Management % 37% 38% 39% 39% # of times reviews for management 2x/year 2x/year 2x/year 2x/year annually Union % 17% 17% 17% 17% employees

Female % 5% 6% 6% 6% Employees by State (does not include empoyees of subsidiary companies)

Three Generations of our Workforce Alabama # 853 882 904 976

Gen X % 68% 66% 65% 63% California # 1 1 1 2

Gen Y % 23% 23% 22% 21% Colorado # 0 0 1 0

Boomers % 9% 11% 13% 16% Connecticut # 2 5 8 8

Average Age and Years of Service District of Columbia # 21 26 25 39

Average Age Years 45 45 44 44 Delaware # 41 44 43 50

Average years of service Years 14.4 13.9 13.5 13.4 Florida # 3,274 3,583 3,730 4,220

Management New Hires Georgia # 1,803 1,977 2,184 2,317

Diverse12 % 49% 59% 59% 52% Illinois # 502 558 656 835

Female % 21% 24% 20% 29% Indiana # 966 1,118 1,227 1,282 Kansas # 0 0 1 0

Kentucky # 1,100 1,302 1,313 1,353

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Employees continued Community Giving and Involvement

Employees Community Giving & Involvement

Data Units 2019 2018 2017 2016 13 Data Units 2019 2018 2017 2016 Number of states where CSX 23 states and 23 states and 23 states and 23 states and Louisiana # 90 97 104 115 # Territories has philanthropic giving DC DC DC DC Maine # 0 0 0 1 Investment in capital $ Billions 1.7 1.7 2.0 2.7 Maryland # 818 833 981 1,277 expenditures Investment in capital Massachusetts # 200 169 172 174 expenditures - used for $ Billions 1.3 1.3 1.3 1.1 infrastructure improvement Michigan # 301 290 312 320 Total community giving $ Millions 10 10 12 16 Mississippi # 32 32 28 37

Missouri # 1 1 1 1 Employee volunteer hours Hours 9,000 7,500 9,800 18,000

New Jersey # 92 104 106 143 20,500 27,000 38,000 54,000 webforms webforms webforms webforms Inquiries handled by TellCSX14 # New Mexico # 0 0 1 1 19,000 12,000 N/A phone 21,000 phone emails emails calls calls New York # 1,426 1,466 1,556 1,776

North Carolina # 605 618 671 868

Ohio # 2,056 2,156 2,373 2,601

Ontario (Canada) # 20 24 26 31

Pennsylvania # 582 667 700 746

Quebec # 16 16 17 21

South Carolina # 536 597 643 764

Tennessee # 954 962 988 1,131

Texas # 3 4 6 5

Virginia # 665 731 705 758

Washington # 0 0 0 3

West Virginia # 877 950 1,006 1,118

Unassigned location # 2,602 2,804 3,027 3,804

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Environment

Environment Environment

Data Units 2019 2018 2017 2016 Category Data Units 2019 2018 2017 2016

Waste by Type of Disposal Method Greenhouse Gas Emissions

42 6 12 12 Landfilled Direct (Scope 1) GHG Metric tons 18 4,309,317 4,648,738 4,706,707 4,774,800 emissions CO2 Eq 16 20 26 29 Incinerated Hazardous waste from Energy indirect (Scope 2) GHG Metric tons 15 Short Tons 195,606 204,678 220,696 229,217 ongoing operations 19 19 9 38 35 Recycled emissions CO2 Eq Other indirect (Scope 3) GHG Metric tons 77 35 76 76 Total 182,629 153,924 181,414 301,169 emissions CO2 Eq 4 56 66 53 Landfilled Metric Tons GHG emissions intensity for CO Eq/ 10.80 11.23 11.49 11.55 Hazardous waste from 6 14 15 30 Incinerated SBT20 2 remediation and emergency Short Tons MGTM response activities 7 5 11 30 Recycled Reduction of GHG emissions for % Reduction -10.8% -7.2% -5% -4.6% SBT21 17 75 92 114 Total Emissions of ozone-depleting Metric tons 0.09 0.10 0.17 0.17 44,629 33,363 47,894 42,208 Landfilled substances (ODS) 318 407 126 538 Incinerated Non-hazardous waste from Other Significant GHG 15 16 Short Tons Recycled & ongoing operations 1,114 1,340 3,027 1,210 22 Reuse Nitrogen Oxide (NOX) Metric Tons 44,813 52,175 55,295 71,967

46,061 35,109 51,047 43,956 Total 22 Sulfur Oxide (SOX) Metric Tons 52 56 55 866

57,705 39,755 89,400 166,524 Landfilled 23 Carbon Dioxide (CO2) Metric Tons 4,578,540 4,932,045 5,010,068 5,121,387 Non-hazardous waste from 25 37 341 52 Incinerated Methane (CH )24 Metric Tons 505 538 550 572 remediation and emergency Short Tons Recycled & 4 17 6,879 36,515 193,010 146,596 response activities Reuse 25 Nitrous Oxide (N2O) Metric Tons 113 121 122 125 64,609 76,307 282,751 313,172 Total Hydrofluorocarbons (HFCs) Metric Tons 0.12 0.12 0.11 0.16 Million 1.34 1.83 2.41 2.57 Used oil Volatile Organic Compounds Not Gallons Metric Tons 1,926 2,333 2,545 (VOC) 26 Calculated Short Tons 407 367 390 290 Batteries Not Carbon Monoxide (CO) 26 Metric Tons 11,919 12,844 12,961 Recycling Short Tons 159,460 157,306 326,428 205,695 Steel Calculated # Millions 2.64 2.25 2.11 3.00 Crossties Not Particulate Matter (PM) 26 Metric Tons 1,307 1,517 1,629 Short Tons 34,617 92,993 32,831 94,577 Asphalt Calculated Short Tons 32,905 12,957 18,258 1,270 Concrete

102 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 103 2019 ESG Performance Data

Environment continued

Environment Environment

Data Units 2019 2018 2017 2016 Category Data Units 2019 2018 2017 2016 Category

Energy Consumption Fuel Use by Type

55,621,655 60,193,226 60,755,242 62,962,063 Diesel Indirect Energy Consumption Gigajoules 1,635,657 1,580,198 1,567,901 1,634,090 Electricity

1,028,332 1,026,510 983,655 1,022,408 Gasoline 59,291,134 64,164,301 64,763,394 66,607,953 Diesel

550,684 540,418 783,393 457,954 Natural Gas 1,124,647 1,122,654 1,075,786 1,078,698 Gasoline

Energy consumption within 398,632 357,025 437,526 174,859 Propane 44,678 41,892 41,558 34,751 Jet Fuel MMBTU CSX27 42,416 39,771 39,454 32,991 Jet Fuel Direct Fuel Usage Gigajoules 580,864 570,035 826,326 483,051 Natural Gas 16,090 22,394 34,120 32,339 Used Oil 439,768 393,867 482,675 193,078 Propane

Total Direct 17,151 23,871 36,831 34,335 Used Oil 57,657,809 62,179,344 63,033,390 64,682,614 Consumption Total Direct 61,498,242 66,316,621 67,226,570 68,431,866 Fuel Usage Energy consumption outside MMBTU 1,550,239 1,497,678 1,486,022 1,549,209 CSX28 Water

Energy Efficiency Water withdrawal by source31 Kgal 479,490 486,466 2,000,790 1,199,491 MMBTU/ Energy Intensity29 297 305 310 319 MRTM Fuel Efficiency30 RTM/gal 508 492 488 474

104 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 105 2019 ESG Performance Data

Footnotes 14 Inquiries handled by TellCSX, CSX’s contact hub for non-emergency issues. 01 Diverse spend is defined as the amount, in dollars, spent with suppliers that are small, minority-owned or women-owned businesses. 15 Hazardous and non-hazardous waste from ongoing operations values have been corrected from the 2018 CSR data supplement report because LEADS data was reported in the wrong location in 2018 and has now been corrected. LEADS data 02 Average active trains per day excludes passenger and foreign trains. will be reported with non-hazardous ongoing operations waste data moving forward.

03 Frequency of internal railway integrity inspections is the number of inspections per week, weighted for the number of main 16 Non-hazardous waste from ongoing operations in 2016-2018 was recalculated to include recycled and reuse waste. track miles on which those inspections took place. Calculated as (weekly inspections × miles of track on which they took place) / (total main track miles) 17 Non-hazardous waste from remediation and emergency response activities in 2016-2018 was recalculated to include recycled and reuse waste. 04 FRA Personal Injury Rate calculated as cases / 200,000 employee hours. Safety statistics are estimated and continue to be updated as actuals settle. 18 Direct (Scope 1) GHG emissions data corrected from the 2018 CSR data supplement report due to change in utility management vendors and their calculation methodology. The increase reflects corrected natural gas usage. 05 FRA Train Accident Rate tracks FRA reportable train accidents per million train miles. Safety statistics are estimated and continue to be updated as actuals settle. 19 Energy indirect (Scope 2) GHG emissions data corrected from the 2018 CSR data supplement report due to change in utility management vendors and their calculation methodology. This increase is due to the increase in corrected electricity usage. 06 Rate of work-related injuries and illnesses. An injury or illness is considered a recordable incident if it results in any of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of 20 GHG emissions intensity in line with science based target goal set in 2020. A gross ton mile (GTM) represents the movement of consciousness. Additionally, a significant injury or illness diagnosed by a physician or other licensed health care professional one ton of train weight one mile. GTMs are calculated by multiplying total train weight by the distance the train moved. is considered a recordable incident, even if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness. 21 Reduction of GHG emissions based on 2014 value of 12.1 metric tons of carbon dioxide equivalent per MGTM.

07 Fatality Rate is the rate of work-related fatalities / total number of full-time employees. 22 Nitrogen Oxide and Sulfur Oxide values for 2017 and 2018 were recalculated to account for new emission factors in 2017 through December 31, 2019 that now includes values reported from stationary source. 08 Number of accidents and incidents (combined) is any impact between railroad on-track equipment and a highway user at crossings. It includes any collision, derailment, fire, or other events involving the operation of railroad on-track equipment that 23 Carbon Dioxide data has been corrected due to recalculated increase in Scope 1 and 2 emissions. results in reportable damage above thresholds established in 49 CRR 225.5; other incidents or exposures that result in fatality or injury to any person, or result in occupational illness of a railroad employee. 24 Methane data has been corrected due to recalculated increase in Scope 1 and 2 emissions.

09 Number of accident releases and non-accident releases of hazardous material is the unintentional release of a hazardous 25 Nitrous Oxide data has been corrected due to recalculated increase in Scope 1 and 2 emissions. material while in transportation, including loading and unloading while in railroad possession that is not caused by derailment, collision, or other rail-related accidents. 26 Volatile Organic Compounds, Carbon Monoxide and Particulate Matter values are newly calculated and reported using data from the corresponding inventory year. 10 Number of violations resulting from the U.S. FRA or state inspections or audits. Violations include any safety-related issue including those related to accident reporting, grade-crossing signal safety, hazardous material regulations, industrial hygiene, 27 Natural gas data has been corrected from the 2018 CSR data supplement report due to change in utility management vendors motive power and equipment (e.g., freight car safety, locomotive safety, and passenger equipment safety), railroad operating and their calculation methodology. Reported usage increased from 3,310,435 therms (349,186 GJ) to 5,404,183 therms practices (e.g., alcohol and drug use, hours of service laws, communications, and operating practices), signal system safety (570,035 GJ). and track safety. Includes violation defects that both did and did not result in civil penalties. 28 Energy consumption outside CSX data has been corrected from the 2018 CSR data supplement report due to change in utility 11 Number of defects resulting from the U.S. FRA or state inspections or audits. Defects include any safety-related issue including management vendors and their calculation methodology. Reported usage increased from 309,402 MWh to 438,944 MWh. those related to accident reporting, grade-crossing signal safety, hazardous material regulations, industrial hygiene, motive power and equipment (e.g., freight car safety, locomotive safety, and passenger equipment safety), railroad operating practices 29 Energy intensity data has been corrected due to the increase in natural gas and electricity usage (MMBTUs). (e.g., alcohol and drug use, hours of services laws, communications, and operating practices), signal system safety and track safety. Includes violation defects that both did and did not result in civil penalties. 30 Revenue ton mile (RTM) is calculated by multiplying the miles traveled on each leg by the number of tons of revenue traffic carried on that leg. 12 Diverse workforce is defined by CSX as males of color and all females. 31 Water withdrawal data has been corrected from the 2018 CSR data supplement report due to change in utility management 13 2016 employee data has been updated from previously reported information. vendors and their calculation methodology.

106 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 107 2019 ESG Performance Data

GRI Standards Index 102-10: Significant changes to Over the past three years, CSX Corporation’s operating the organization and its supply model has undergone a transformation to improve GRI Standard Disclosure # Response/Location Information chain efficiency throughout the organization and the supply chain. For more, please see The Future of Freight, p. GRI 102: General Organization Profile 16-19. CSX also utilizes a Supplier Diversity Program, Disclosures Governance: Responsible Sourcing, p. 86, which 102-1: Name of the CSX Corporation encourages diversity throughout the supply chain. organization 102-11: Precautionary principle Governance: Risk Management and Business Disruption 102-2: Activities, brands, CSX, a Class I railroad, is one of the nation’s leading or approach Prevention, p. 84 products, and services transportation suppliers. The company’s rail and intermodal businesses provide rail-based transportation 102-12: External initiatives Governance: Business Ethics, p. 84 and Code of Ethics services including traditional rail service and the Safety: Community Safety, p. 44 transport of intermodal containers and trailers. All of the Environment, p. 46 information contained in this report is fully representative of the company’s principal operating subsidiary, CSX 102-13: Membership of Communities, p. 68-79 Transportation, as well as its other subsidiaries, including: associations CSX Intermodal Terminals, Inc. (CSX Intermodal Strategy Terminals); Total Distribution Services, Inc. (TDSI); Transflo Terminal Services, Inc. (TRANSFLO); and CSX 102-14: Statement from senior CEO Letter, p. 2-5 Technology, Inc. (CSX Technology). decision-maker

102-3: Location of Jacksonville, FL 102-15: Key impacts, risks, ESG Fundamentals, p. 88-93; Task Force on Climate- headquarters and opportunities related Financial Disclosures (TCFD) Index, p. 120-123

102-4: Location of operations The company operates in two countries: the United Ethics and integrity States and Canada. 102-16: Values, principles, The Future of Freight: Our Guiding Principles, p. 18 102-5: Ownership and legal CSX is a publicly traded company, incorporated in standards, and norms of form Virginia. CSX’s common stock is listed on the Nasdaq behaviors Global Select Market. The official trading symbol is “CSX.” 102-17: Mechanism for advice Governance: Business Ethics, p. 84 and Code of Ethics and concerns about ethics 102-6: Markets served About CSX, p. 8-9; CSX 2020 10-K, p. 3, 12-14 for revenue and volume by market served. Governance

102-7: Scale of the CSX recorded $11.9 billion in revenue in 2019. CSX 102-18: Governance structure CSX discloses its governance structure in the 2020 organization serves three primary lines of business: merchandise, coal Annual Proxy Statement and intermodal. During 2019, the merchandise business 102-19: Delegating authority CSX discloses its governance structure in the 2020 shipped 2.7 million carloads (43 percent of volume), Annual Proxy Statement the coal business shipped 843 thousand carloads (14 percent of volume), and the intermodal business moved 102-20: Executive-level ESG at CSX, p. 12 2.7 million units (43 percent of volume). responsibility for economic, environmental, and social More information is available at About CSX, p. 8-9. topics

102-8: Information on People: The CSX Workforce, p. 58 102-21: Consulting ESG Fundamentals: Stakeholder Engagement, p.92- 93 employees and other workers stakeholders on economic, environmental and social 102-9: Supply chain Governance: Responsible Sourcing, p. 86 topics

108 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 109 2019 ESG Performance Data

Stakeholder Engagement Economic

102-40 List of stakeholder ESG Fundamentals: Stakeholder Engagement, p. 92-93 GRI 201: Economic Non-material Economic Topics groups Performance 201-1: Direct economic value 2019 ESG Performance Data tables, p. 96 102-41 Collective bargaining There are 13 different union organizations with whom generated and distributed agreements CSX conducts business. Additionally, 84% percent of CSX’s overall workforce are covered by one of the 201-2: Financial implications In addition the Task Force on Climate-related Financial company’s many collective bargaining agreements. and other risks and Disclosures (TCFD) Index, p. 120-123, CSX makes this opportunities due to climate information available through our CDP report submission. 102-42 Identifying and ESG Fundamentals: Stakeholder Engagement, p. 92-93 change selecting stakeholders Environmental 102-43 Approach to ESG Fundamentals: Stakeholder Engagement, p. 92-93 stakeholder engagement Materials (301)

102-44 Key topics and ESG Fundamentals: Stakeholder Engagement, p. 92-93 GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 concerns raised through Management topic and its Boundary stakeholder engagement Approach 103-2: Management approach Environment: Our Approach, p. 46 around the report and its components Reporting Practices 103-3: Evaluation of Environment: Our Approach, p. 46 102-45 Entities included In addition to CSX, the Company’s subsidiaries include management approach in consolidated financial CSX Intermodal Terminals, Total Distribution Services, GRI 301: Materials 301-1: Materials used by 2019 ESG Performance Data tables, p. 96-105 statements Transflo Terminal Services, CSX Technology, and other weight or volume subsidiaries. CSX Corporation’s public filings account for these subsidiaries and holdings. Energy (302)

102-46 Process for defining ESG at CSX, p. 15 GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 report content and boundaries Management topic and its Boundary Approach 102-47 List of material topics ESG Fundamentals, p. 90-91 103-2: Management approach Environment: Our Approach, p. 46 and its components 102-48 Restatements of 2018 data restatements are included in the footnotes as information part of the 2019 ESG Performance Data tables 103-3: Evaluation of Environment: Our Approach, p. 46 management approach 102-49 Changes in reporting ESG at CSX: Our ESG Priorities, p. 14 GRI 302: Energy 302-1 Energy consumption 2019 ESG Performance Data tables, p. 104 102-50 Reporting period ESG at CSX: About this Report, p. 15 within the organization

102-51 Date of most recent CSX’s most recent Corporate Social Responsibility 302-2 Energy consumption CSX does not currently track energy consumption previous report (if any). Report was published on June 2nd, 2017. A data outside of the organization beyond the scope of our organization. supplement was published on May 30th, 2019. 302-3: Energy intensity 2019 ESG Performance Data tables, p. 104 102-52 Reporting cycle This report documents CSX’s activities and impact in calendar year 2019. 302-4: Reduction in energy 2019 ESG Performance Data tables, p. 103 consumption 102-53 Contact point for ESG at CSX: About this Report, p. 15 questions regarding the report Water and Effluents (303)

102-54 Claims of reporting ESG at CSX: About this Report, p. 15 GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 in accordance with the GRI Management topic and its Boundary Standards Approach 103-2: Management approach Environment: Our Approach, p. 46 102-55 GRI Content Index GRI Standards Index, p. 108-116 and its components

102-56 External Assurance ESG Fundamentals, p. 88; Appendix: Statement of 103-3: Evaluation of Environment: Our Approach, p. 46 Verification, p. 124 management approach

110 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 111 2019 ESG Performance Data

GRI 303: Water and 303-1 Interactions with water as Environment: Water Management, p. 54 Environmental Compliance (307) Effluents a shared resource GRI 103: 103-1: Explanation of material ESG Fundamentals, p.90-91 303-2 Management of water Environment: Water Management, p. 54 Management topic and its Boundary discharge-related impacts Approach 103-2: Management approach Environment: Our Approach, p. 46 303-3: Water withdrawal 2019 ESG Performance Data tables, p. 105 and its components

303-5: Water consumption Environment: Water Management, p. 54 103-3: Evaluation of Environment: Our Approach, p. 46 management approach Emissions (305) GRI 307: 307-1 Non-compliance with Environment: Compliance, p. 49 GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 Environmental environmental laws and Management topic and its Boundary Compliance regulations Approach 103-2: Management approach Environment: Our Approach, p. 46 and its components

103-3: Evaluation of Environment: Our Approach, p. 46 management approach

GRI 305: Emissions 305-1 Direct (Scope 1) GHG 2019 ESG Performance Data tables, p. 103 Emissions

305-2 Energy Indirect (Scope 2) 2019 ESG Performance Data tables, p. 103 GHG Emissions

305-3 Other indirect (Scope 3) 2019 ESG Performance Data tables, p. 103 GHG emissions

305-4 GHG emissions intensity 2019 ESG Performance Data tables, p. 103

305-5 Reduction of GHG 2019 ESG Performance Data tables, p. 103 Emissions

305-6 Emissions of ozone- 2019 ESG Performance Data tables, p. 103 depleting substances (ODS)

305-7 Nitrogen oxides (NOX), 2019 ESG Performance Data tables, p. 103 sulfur oxides (SOX), and other significant air emissions

Effluents and Waste (306)

GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 Management topic and its Boundary Approach 103-2: Management approach Environment: Our Approach, p. 46 and its components

103-3: Evaluation of Environment: Our Approach, p. 46 management approach

GRI 306: Effluents 306-2 Waste by type and 2019 ESG Performance Data tables, p. 102 and Waste disposal method

306-4 Transport of hazardous 2019 ESG Performance Data tables, p. 102 waste

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Social 403-6 Promotion of worker People: Employee Health & Wellbeing, p. 60 health Employment (401) 403-7 Prevention and Safety: Our Approach, p. 32 GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 mitigation of occupational Management topic and its Boundary health and safety impacts Approach directly linked by business 103-2: Management approach People: Our Approach, p. 56 relationships and its components 403-8 Workers covered by an 2020 Benefits Summary Page 103-3: Evaluation of People: Our Approach, p. 56 occupational health and safety management approach management system GRI 401: 401-1 New employee hires and People: Our Approach, p. 56 403-9 Work-related injuries 2019 ESG Performance Data tables, p. 97 Employment employee turnover 2019 ESG Performance Data tables, p. 98-99 Training and Education (404) 401-2 Benefits provided to People: Employee Health & Wellbeing, p. 60 full-time employees that are not 2020 Benefits Summary Page GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 provided to temporary or part- Management topic and its Boundary time employees Approach 103-2: Management approach People: Our Approach, p. 56 401-3 Parental leave People: Employee Health & Wellbeing, p. 60 and its components 2020 Benefits Summary Page 103-3: Evaluation of People: Our Approach, p. 56 Occupational Health and Safety (403) management approach

GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 GRI 404: 404-1 Average hours of training 2019 ESG Performance Data tables, p. 96-97 Management topic and its Boundary Occupational per year per employee Approach Health and Safety 103-2: Management approach Safety: Our Approach, p. 32 404-2 Programs for upgrading Safety, p. 35 and its components employee skills and transition People: Talent Development and Training in Action, assistance programs p. 60-61 103-3: Evaluation of Safety: Our Approach, p. 32 management approach 404-3 Percentage of employees Safety, p. 35 receiving regular performance People: Talent Development and Training in Action, GRI 403: 403-1 Occupational health and Safety: Our Approach, p. 32 and career development p. 60-61 Occupational safety management system reviews Health and Safety 403-2 Hazard identification, Safety: Our Approach, p. 32 Diversity and Equal Opportunity (405) risk assessment, and incident investigation GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 Management topic and its Boundary 403-3 Occupational health People: Employee Health & Wellbeing, p. 60 Approach services 2020 Benefits Summary Page 103-2: Management approach People: Our Approach, p. 56 and its components 403-4 Worker participation, Safety: Our Approach, p. 32 consultation, and People: Training in Action, p. 61 103-3: Evaluation of People: Our Approach, p. 56 communication on occupational management approach health and safety GRI 405: Diversity 405-1 Diversity of governance People: Our Approach, p. 56 403-5 Worker training on Safety: Our Approach, p. 32 and Equal bodies and employees 2019 ESG Performance Data tables, p. 98-100 occupational health and safety People: Training in Action, p. 61 Opportunity

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Local Communities (413)

GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 Management topic and its Boundary Approach 103-2: Management approach Communities: Our Approach, p. 68 and its components

103-3: Evaluation of Communities: Our Approach, p. 68 management approach

GRI 413: Local 413-1 Operations with local Communities: Our Approach, p. 68 Communities community engagement, Safety: Community Safety, p. 44 impact assessments, and development programs

413-2 Operations with Communities: Our Approach, p. 68 significant actual and potential Safety: Community Safety, p. 44 negative impacts on local communities

Customer Health and Safety (415)

GRI 103: 103-1: Explanation of material ESG Fundamentals, p. 90-91 Management topic and its Boundary Approach 103-2: Management approach Safety: Customer Collaboration, p. 44 and its components

103-3: Evaluation of Safety: Customer Collaboration, p. 44 management approach

GRI 416: Customer 416-1 Assessment of the health Safety: Customer Collaboration, p. 44 Health and Safety and safety impacts of product and service categories

416-2 Incidents of non- Safety: Customer Collaboration, p. 44 compliance concerning the health and safety impacts of products and services

Customer Privacy (418)

GRI 418: Customer 418-1: Substantiated Governance: Cyber and Information Security Privacy complaints concerning Management, p. 85-86. No breaches were recorded in breaches of customer privacy 2019. and losses of customer data

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Sustainability Accounting Standards Board (SASB) Index Table 2: Activity Metrics

The following table provides the locations of information addressing the requirements of the SASB Rail Disclosure Location Transportation Standard, which maps industry-specific disclosures for ESG issues. 000.A Number of carloads transported 2019 Annual Report (10-K p. 4) Table 1: Sustainability Disclosure Topics & Accounting Metrics 2019 ESG Report (About CSX, p. 9)

000.B Number of intermodal units transported 2019 Annual Report (10-K p. 4) Disclosure Accounting Metric Location 2019 ESG Report (About CSX, p. 9) Greenhouse Gas 110a.1 Global Scope 1 emissions 2019 ESG Report (ESG Performance Data 000.C Track miles 2019 Annual Report (10-K p. 12) Emissions Tables, Environment, p. 103) 2019 ESG Report (About CSX, p. 9) 110a.2 Discussion of long-term Latest CDP Climate Change Response 000.D Revenue Ton Miles (RTM) 2019 Annual Report (10-K p. 31) and short-term strategy or plan to manage Scope 1 emissions, emis- 000.E Number of Employees 2019 Annual Report (10-K p. 4) sions reduction targets, and an 2019 ESG Report (Environment, p. 46-55) 2019 ESG Report (About CSX, p. 9) analysis of performance against those targets

110a.3 Total fuel consumed, per- 2019 ESG Report (ESG Performance Data centage renewable Tables, Environment, p. 102-105)

2019 ESG Report (Environment, p. 48)

Air Quality 120a.1 Air emissions of the follow- 2019 ESG Report (ESG Performance Data

ing pollutants: (1) NOx (excluding Tables, Environment, p. 103)

N2O) and (2) particulate matter

Employee Health & Safety 320a.1 (1) Total recordable inci- 2019 ESG Report (ESG Performance Data dent rate (TRIR), (2) fatality rate, Tables, Safety, p. 97) and (3) near miss frequency rate (NMFR)

Competitive Behavior 520a.1 Total amount of monetary In 2019, CSX wasn’t subject to any monetary losses as a result of legal pro- losses as a result of legal proceedings associ- ceedings associated with anti- ated with anticompetitive behavior regulations competitive behavior regulations

Accident & Safety Man- 540a.1 Number of accidents and 2019 ESG Report (ESG Performance Data agement incidents Tables, Safety, p. 97)

540a.2 Number of (1) accident 2019 ESG Report (ESG Performance Data releases and (2) non-accident Tables, Safety, p. 97) releases

540a.3 Number of Federal Rail- 2019 ESG Report (ESG Performance Data road Administration (FRA) Recom- Tables, Safety, p. 97) mended Violation Defects

540a.4 Frequency of internal rail- 2019 ESG Report (ESG Performance Data way integrity inspections Tables, Safety, p. 97)

118 CSX 2019 Environmental, Social, and Governance Report CSX 2019 Environmental, Social, and Governance Report 119 2019 ESG Performance Data

Task Force on Climate-related Financial Disclosure (TCFD) Index Strategy a) Describe the cli- Latest CDP CSX’s operations and financial results could be mate-related risks and Climate Change negatively impacted by climate change and regu- The following table summarizes specific information that addresses the requirements of the TCFD and maps opportunities the orga- Response latory and legislative responses to climate change. where it is referenced, either in this report or other publicly available materials. This is a first step in our application nization has identified (C2.1, C2.2, C2.3 Risks identified in the short-term (0-3 years) include of the TCFD recommendations. We are actively leveraging these recommendations to improve our approach to over the short, medi- & C2.4) increased severity of extreme weather events such climate risk management, and we plan to further enhance our climate-related disclosures in our future reporting. um, and long term as cyclones or floods and uncertainty in market signals and global economic conditions that could 2019 Annual negatively affect demand for commodities and Core TCFD Disclosure CSX Disclosure CSX Disclosure Brief Reference Report other freight. Risks identified in the long-term (10-30 Elements Recommendation Source (10-K pg. 9) years) include costs to transition to lower emissions [full answers can be found in disclosure sources] technology.

Governance a) Describe the Latest CDP The Audit Committee of the Board has responsibility CSX has also identified climate-related opportuni- board’s oversight of Climate Change for risk oversight and evaluation of climate-related ties with the potential to have a substantive financial climate-related risks Response issues, including risks associated with energy and or strategic impact on our business. Opportuni- and opportunities (C1.1) environmental policy. All business risks, including ties identified in the short-term (0-3 years) include climate risks, are presented to the Board for con- access to new markets and customers, as well as sideration and are a scheduled agenda item at all participation in renewable energy programs and meetings. We integrate climate-related issues when adoption of energy-efficient measures. reviewing and guiding strategy, major plans of action, risk management policies, annual budgets, b) Describe the impact Latest CDP The identified risks and opportunities have af- business plans, performance objectives, major cap- of climate-related risks Climate Change fected CSX’s operations, products and services, ital expenditures, acquisitions and divestitures, and and opportunities on Response supply chain, adaptation and mitigation activities, progress against goals and targets. The Board also the organization’s (C2.3a, C2.4a & and investment in R&D. For example, air pollution monitors and oversees progress against goals and businesses, strategy, C2.5) limits are affecting both CSX’s customers and the targets for addressing climate-related issues. and financial planning rail industry. As a result, we are working to adjust our business plan to respond to the declining coal b) Describe manage- Latest CDP The executive vice president and chief legal officer 2019 Annual market. ment’s role in assess- Climate Change is responsible for both assessing and managing cli- Report ing and managing Response mate-related risks and opportunities and reports to (10-K pg. 9) climate-related risks (C1.2) the Board on climate-related issues on a quarterly and opportunities basis. The EVP/CLO has ultimate responsibility for c) Describe the resil- Latest CDP CSX applies an internal methodology to evaluate the Public Safety, Health, and Environment (PSH&E) ience of the organiza- Climate Change potential climate change scenarios and other types department, which consists of environmental tion’s strategy, taking Response of disruption that may impact operations and safety, professionals competent in environmental policy, into consideration (C3.1d) which is used to plan for business continuity. As performance, management, and associated risks. different climate-relat- part of that process, both short- and long-term im- ed scenarios, includ- pacts are considered, and action is taken. ing a 2 degree or lower 2019 ESG Report scenario CSX has established a new emission intensity (Environment, reduction goal approved by the Science Based p. 46-55) Target Initiative, which is consistent with reductions required to keep warming to well-below 2°C.

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Core TCFD Disclosure CSX Disclosure CSX Disclosure Brief Reference Metrics and a) Disclose the met- Latest CDP To track and assess climate-related risks and Elements Recommendation Source [full answers can be found in disclosure sources] Targets rics used by the Climate Change opportunities, CSX uses various metrics, including organization to assess Response GHG emissions, avoided emissions, and freight haul Risk a) Describe the orga- Latest CDP CSX business leaders identify and assess cli- climate-related risks (C-TS8.4, C1.3a & efficiency. To further incentivize the achievement of Manage- nization’s processes Climate Change mate-related risks by taking a long-term view and and opportunities in C11) climate-related goals, CSX also uses climate-relat- ment for identifying and Response focusing on how the potential effects of climate line with its strategy ed performance metrics that are incorporated into assessing climate-re- (C2.2b) change could affect infrastructure and ability to and risk management the company’s remuneration policies for our Chief lated risks operate the business. At a company level, CSX uses process Operating Officer and others with direct responsi- a business risk management (BRM) process to iden- bility for improving efficiency. CSX does not use an 2019 Annual tify, prioritize, and assess risks, including climate-re- internal price on carbon, but we anticipate doing so Report lated risks, that have the potential to affect busi- in the next several years. (10-K pg. 9) ness strategy. For each identified risk (unmitigated and mitigated), a ranking is provided ranging from b) Disclose Scope 2019 ESG Report CSX Annual Scope 1, 2, 3 GHG Emissions (1,000

2019 ESG Report Severe (worst-case) to Limited based on financial, 1, Scope 2, and, if (ESG Performance metric tons CO2e) operational, and reputational impacts; the likelihood appropriate, Scope 3 Data Tables, (ESG Fundamen- Scope 1: 4,309 metric tons CO e tals, of occurring; and the speed with which the impact greenhouse gas (GHG) p. 102-105) 2 could occur. emissions, and the Latest CDP p. 88-93) Scope 2: 196 metric tons CO2e related risks Climate Change Additionally, to identify and prioritize material Response Scope 3: 183 metric tons CO2e issues, including climate-related, we conducted a (C6.1, C6.2) 2020 materiality assessment, which led to the prior- Our methodology includes tracking emission factors itization of the issues more material to our business for purchased electricity and market-based electric- and stakeholders. ity, and making estimations using the WRI/WBCSD GHG Protocol Scope 3 Evaluator Tool. b) Describe the organi- Latest CDP As part of our BRM process, key business leaders zation’s processes for Climate Change own each process and report to an Executive Risk c) Describe the targets 2019 ESG Report As approved by the Science Based Targets initia- managing climate-re- Response Committee, which is responsible for elevating dis- used by the orga- (Environment, tive (SBTi), CSX has set a GHG intensity emissions lated risks (C2.2d) cussion of BRM risks to the executive team. Busi- nization to manage p. 46-55) target to reduce GHG emissions by 37.3% by 2030, ness risk factors are identified, discussed during climate-related risks using a 2014 baseline. Board meetings, and described in the company’s and opportunities and In 2012, we set a series of environmental goals Annual Report. performance against targets to achieve by the end of 2020. We are on track to For example, to mitigate the physical risk of ex- achieve these goals by the end of the year, and treme weather, CSX has established comprehensive have already achieved the following goals: business continuity plans. CSX is also constantly • Reduce GHG emissions intensity by 6-8% investing in infrastructure. • Reduce quantity of water consumed and improve the quality of effluent water c) Describe how pro- Latest CDP Climate-related risks are integrated into multi-dis- • Continue to elevate sustainable standards cesses for identifying, Climate Change ciplinary company-wide risk identification, assess- of construction assessing, and man- Response ment, and management process. The company’s aging climate-related (C1.2a, C2.2 approach for risk management focuses on activities risks are integrated C2.31) that the company controls, as well as those out- into the organization’s side the company’s control. Throughout 2019, CSX overall risk manage- identified and reviewed risk factors that could have ment a material effect on the company, including environ- mental law & regulation, costs to transition to lower emissions technology and increased severity of ex- treme weather events such as cyclones and floods.

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Appendix: Statement of Verification

7.1 Scope Jacobs performed a verification of CSX’s 2019 GHG Emission Inventory to determine if a reasonable level of assurance could be provided. CSX’s management is responsible for the collection and presentation of the information within the 2019 Emissions Inventory. Jacobs’ responsibility is to express a conclusion as to whether anything has been identified to suggest that the reported Emission Inventory is not presented fairly in accordance with referenced GHG accounting principles and associated guidance documents.

7.2 Methodology Our verification review was completed in accordance with ISO 14064-3:2019 section 6. As such, Jacobs planned and performed the verification activities in order to provide a reasonable assurance with respect to GHG emission intensity information reviewed.

7.3 GHG Assertions CSX asserts that their total annual Scope 1, Scope 2, and listed Scope 3 emissions for the 2019 reporting period

(exclusive of purchased goods and services and capital goods) is 4,687,474 metric tonnes CO2e.

7.4 Conclusion Based on the verification review conducted, the GHG Scope 1, Scope 2, and listed Scope 3 (exclusive of purchased goods and services and capital goods) assertions in CSX’s 2019 Emissions Inventory are materially correct and presented fairly in accordance with stated criteria.

Jacobs

Stephanie McMackin, P.E. (OH, KY, WV, SC) Senior Reviewer Cincinnati, Ohio June 11, 2020

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