2021

CDP Climate Change Response

DELIVERING RESPONSIBLY

About this Report

Delivering Responsibly is at the heart of how CN is building for a sustainable future. The following report contains

the data and information CN disclosed in response to CDP's 2021 climate change questionnaire.

Contents

C0

Introduction

01

C1

Governance

04

GHISLAIN HOULE

Executive Vice-President and

Chief Financial Officer

Signee of CN's CDP Climate

Change Response

CDP is a non-profit that runs the global disclosure system for investors, companies, cities, states and regions to drive companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. CDP's annual environmental disclosure and scoring process is widely recognized as the gold standard of corporate environmental transparency. In 2021, 590 investors with over US$110 trillion in assets and 200+ large purchasers with US$5.5 trillion in procurement spend requested companies to disclose data on environmental impacts, risks and opportunities through CDP's platform.

We are proud to respond to CDP for the twelfth straight year. Transparency regarding climate-related governance, risks and opportunities, strategy, and performance is critical to maintaining the trust of our stakeholders and allows our investors to better understand the implications of climate change on our business. Our goal is to conduct our operations with minimal environmental impact while providing cleaner, more sustainable transportation services to our customers.

Since 1993, we have reduced our locomotive emission intensity by 43%, avoiding nearly 48 million tonnes of GHG emissions. CN's 2021 CDP response outlines our commitment to support the transition to a low-carbon future, complementing our ongoing discussions with investors and the work we do with our employees, customers, suppliers, NGOs and governments on the matter of climate change.

C2

Risks and Opportunities

08

C3

Business Strategy

20

C4

Targets and Performance

26

C5

Emissions Methodology

32

C6

Emissions Data

34

C7

Emissions Breakdown

39

C8

Energy

43

C9

Additional Metrics

46

C10

Verification

49

C11

Carbon Pricing

52

C12

Engagement

56

Our Reporting

62

Contact

63

ABOUT THIS REPORT

C0 INTRODUCTION

An Introduction to CN

Reporting Data

Boundary

Transport Modes

C1 GOVERNANCE

C2 RISKS AND OPPORTUNITIES

C3 BUSINESS

STRATEGY

C4 TARGETS AND PERFORMANCE

C5 EMISSIONS METHODOLOGY

C6 EMISSIONS DATA

C7 EMISSIONS BREAKDOWN

C8 ENERGY

C9 ADDITIONAL

METRICS

C10 VERIFICATION

C11 CARBON PRICING

C12 ENGAGEMENT

OUR REPORTING

CONTACT

Introduction

01

C0 Introduction

ABOUT THIS REPORT

C0 INTRODUCTION

  • An Introduction to CN Reporting Data Boundary Transport Modes

C1 GOVERNANCE

C2 RISKS AND OPPORTUNITIES

C3 BUSINESS

STRATEGY

C4 TARGETS AND PERFORMANCE

C5 EMISSIONS METHODOLOGY

C6 EMISSIONS DATA

C7 EMISSIONS BREAKDOWN

C8 ENERGY

C9 ADDITIONAL

METRICS

C10 VERIFICATION

C11 CARBON PRICING

C12 ENGAGEMENT

OUR REPORTING

CONTACT

An Introduction to CN

CN is a North American transportation and logistics company. Our 19,500-mile rail network spans Canada and Mid-America, connecting ports on three coasts: the Atlantic, the Pacific and the Gulf of Mexico. We offer fully integrated rail and other transportation services, including intermodal, trucking, freight forwarding, warehousing and distribution. Our freight revenues are derived from seven commodity groups representing a diversified and balanced portfolio of goods. Essential to the economy, to the customers, and to the communities we serve, we transport more than 300 million tons of cargo annually serving exporters, importers, retailers, farmers and manufacturers. CN is committed to programs supporting social responsibility and environmental stewardship.

A YEAR LIKE NO OTHER

2020 was a challenging year, starting with the February illegal rail blockades, followed by the economic shutdown due to COVID-19. In a year of global change and adjustment, we continued to invest, grow, and deploy innovative technologies that helped ensure the safe, effective and efficient movement of our customers' goods to market. We tackled the difficult challenges of the global pandemic head on, we held our capital budget fairly steady and continued

to invest in the integrity and fluidity of our network and in more fuel-efficient locomotives as well as technologies that support safety and efficiency.

We also continued to strengthen our commitment to making a positive contribution to the fight against climate change. Since 1993, we have reduced our rail locomotive greenhouse gas (GHG) emissions intensity by 43%, avoiding nearly 48 million tonnes of CO2e. CN remains the leader in the North American rail industry, consuming approximately 15% less locomotive fuel per gross ton-mile than the industry average.

SETTING AMBITIOUS GOALS FOR SUSTAINABILITY

As we prepare for the future, we are committed to reduce emissions and improve our carbon intensity consistent with stabilizing global temperatures. In 2017, CN became the first railroad in North America, and amongst the first hundred companies globally, to set an approved science-based target. To ensure consistency with the most recent climate science and best practices that apply a well-below 2°C scenario, and in the context of the Company's acquisition of TransX, we revised our target in 2020. The new target, which was approved by the SBTi in April 2021, commits CN to reduce Scope 1 and 2 GHG emissions by 43% per gross ton miles by 2030 from a 2019 base year. We also commit to reduce Scope 3 GHG emissions from fuel- and energy- related activities 40% per gross ton miles by 2030 from a 2019 base year.

INVESTING FOR TOMORROW

With approximately 85% of our Scope 1 emissions generated from rail operations, we believe the best way to reduce our carbon footprint is by continuously improving our rail efficiency. As such, our target informs our low-carbon transition plan and business strategy, which focuses on five key strategic areas: fleet renewals, innovative technologies, big data analytics, operating practices, and the greater use of renewable fuels. Achieving our target is dependent in part on the continuing successful development and availability of innovative technologies and the availability of sufficient volumes of cost competitive sustainable renewable fuels in the years to come, which will require collaboration between locomotive manufacturers and fuel producers. This ecosystem of collaboration will be key to enabling our success.

CREATING A SUSTAINABLE FUTURE

Our goal is to provide cleaner, more sustainable transportation services to our customers. Shipping heavy goods by rail over long distances is four to five times more fuel efficient than trucks and has tremendous potential to reduce the environmental impact of transportation and help the fight against climate change. We are working with many of our customers to help them reduce their transportation supply chain emissions, leveraging rail for the long haul and trucking over shorter distances, which helps them reduce emissions by up to 75%. We are also supporting the growth in sustainable markets by transporting products such as wood pellets, wood chips, turbine components, solar panels and biofuels.

ENGAGING EMPLOYEES TO TAKE ACTION

Through our EcoConnexions engagement program, launched in 2011, our 24,000 employees are provided with practical knowledge and tools to reduce energy consumption, minimize waste and improve good housekeeping practices in our yards. Launched in 2012, our EcoConnexions From the Ground Up and reforestation program promotes the greening of communities and First Nations situated adjacent to our rail network. Working together with our partners, Tree Canada and America in Bloom, we have assisted community groups to establish green spaces, tree plantings and mass reforestation projects in a sustainable, environmentally responsible manner. In total, since 2012, our EcoConnexions programs have planted more than two million trees - offsetting carbon emissions, improving air quality and the national landscape for future generations to enjoy.

CN | 2021 CDP CLIMATE CHANGE RESPONSE | INTRODUCTION

02

ABOUT THIS REPORT

C0 INTRODUCTION

An Introduction to CN

  • Reporting Data
  • Boundary
  • Transport Modes
    C1 GOVERNANCE

C2 RISKS AND OPPORTUNITIES

C3 BUSINESS

STRATEGY

C4 TARGETS AND PERFORMANCE

C5 EMISSIONS METHODOLOGY

C6 EMISSIONS DATA

C7 EMISSIONS BREAKDOWN

C8 ENERGY

C9 ADDITIONAL

METRICS

C10 VERIFICATION

C11 CARBON PRICING

C12 ENGAGEMENT

OUR REPORTING

CONTACT

C0 Introduction

Reporting Data

C0.2

- C0.4

The report covers data and information from January 1 to December 31, 2020 for our operations in Canada and the United States of America (U.S.).

Our reporting

Financial information is disclosed in Canadian dollars throughout the response.

data

Boundary

C0.5

CN's climate-related impacts are reported using a consolidated approach within an operational control reporting boundary.

Our reporting boundary

Organizational Activities: Transport Services and Transport OEMS

C-TS0.7

The transport modes for which we are providing data include rail, heavy-duty vehicles (HDV), marine, and light-duty vehicles (LDV).

Transport modes

CN | 2021 CDP CLIMATE CHANGE RESPONSE | INTRODUCTION

03

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Disclaimer

CN - Canadian National Railway Company published this content on 26 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 September 2021 18:31:07 UTC.