Materiality Assessment

Union Pacific completed a preliminary materiality assessment with input from internal and external stakeholders, including customers, shareholders and community leaders. We asked respondents to rate 19 key issues on a five-point scale based on the significance of Union Pacific’s ability to impact the issue and each issue’s level of importance. The results were used to determine our highest ranking material issues. Internal and external stakeholder groups were strongly aligned on most issues. Both ranked Customer Service and Satisfaction, and Rail Safety and Maintenance as high priorities. Not surprisingly, talent issues, such as Engagement and Employment Practices ranked higher among the internal group. We are proud of our Community Ties Giving Program, which provides support to more than 3,000 nonprofit organizations; however, we were surprised that Community Involvement and Corporate Philanthropy were ranked slightly lower in importance by the external group than the internal.

The materiality assessment results help us understand what’s important to each stakeholder and allow us to align business strategy to address the most material issues. It’s clear these issues also are important to investors who want to understand where we stand on material issues. In some cases, we’re already achieving great results; however, we need to do better at sharing them with our stakeholders. We anticipate completing a full materiality assessment in 2021.

Materiality Matrix

 
Governance & Risk Management
1
Corporate Governance & Ethics
2
Enterprise Risk Management
 
Talent
3
Talent Management
4
Employment Practices
5
Diversity & Inclusion
6
Labor Rights
7
Employee Engagement
 
Business Operations
8
Customer Service & Satisfaction
9
Responsible Sourcing
 
Safety & Security
10
Emergency Preparedness
11
Rail Safety & Maintenance
12
Digital & Physical Asset Security
 
Environment
13
Emissions & Energy Use
14
Land Management & Biodiversity
15
Water Use & Management
16
Waste Disposal & Reuse
 
Community
17
Community Involvement & Corporate Philantropy
18
Infrastructure Investment & Protection
19
Legislation, Regulation and Government Relations
2019 Building America Report - Materiality Matrix

Highest-Ranked Material Issues

SAFETY AND SECURITY

Rail Safety and Maintenance
Efforts to maintain quality rail infrastructure and prevent derailments, including track inspections and other measures.

Our Approach

  • Our track inspection program customizes schedules and techniques to examine each rail line, mile by mile.
  • State-of-the-art equipment is used to regularly inspect rail lines, locomotives and cars.
Emergency Preparedness
Measures taken to prepare for and reduce the impact of disasters, including but not limited to building relationships with emergency responders and preventing incidents involving hazardous materials

Our Approach

  • Union Pacific partners with customers, regulators and other stakeholders to conduct hazardous materials shipment inspections, sponsor training opportunities and actively participate in numerous industry initiatives focused on continuous improvement of hazardous materials shipments.
  • We provide fire departments and other emergency responders along our routes with comprehensive training on minimizing derailment-related impacts, including classroom and hands-on training.
  • We conduct drills and exercises with local, state and federal stakeholders.
  • The Union Pacific Railroad Police Department is a team of highly trained special agents dedicated to maintaining the railroad’s security and integrity.
Digital and Physical Asset Security
Protecting the company’s critical physical infrastructure and data.

Our Approach

  • Our Information Assurance team has robust processes and redundancies in place to prevent, detect and respond to potential threats.
  • We perform regular vulnerability scanning and system penetration testing to validate our security controls and assess our infrastructure and software applications.
  • Union Pacific uses Railway Alert Network materials for threat hunting and in our security awareness communications.
  • Employees receive annual training to identify phishing attacks and how to avoid being victimized.

BUSINESS OPERATIONS

Customer Service and Satisfaction
Efforts to meet or exceed customer expectations and build productive customer relationships.

Our Approach

  • Our Customer Experience team uses regular surveys to track trends and analyze data.
  • A Customer Advisory Board is comprised of customers providing guidance on best practices.

TALENT

Employment Practices
Employee compensation and benefits, and the efficacy of policies and practices that maintain a healthy and safe work environment, and promote employee well-being.

Our Approach

  • Comprehensive benefits program, including medical insurance, educational assistance and a 401(k). Benefits vary based on the applicable collective bargaining agreement or an employee’s non-union status.
  • Personalized health coaching, helping employees and their spouses manage stress, depression, smoking, diabetes, nutrition education and weight management.
  • Employee Assistance Program, offering all employees and their families counseling and referral services for personal or work-related problems.
  • System health facility program, giving employees access to gyms located near Union Pacific work sites.
  • A diverse mix of training to aid in retaining employees and helping them progress their career.

COMMUNITY

Infrastructure Investment and Protection
Investing in and protecting our network infrastructure, and working with regulatory officials to align our business with the country’s infrastructure requirements and needs.

Our Approach

  • Union Pacific’s 2019 capital program totaled $3.2 billion, supporting infrastructure replacement, locomotives and equipment, commercial facilities and innovation.

Other Material Issues

Category Issue Definition
Corporate Governance Corporate Governance and Ethics Corporate management approach and governance structure, including a culture of respect and observance of business ethics throughout the company.
Enterprise Risk Management Systems and controls to effectively identify, assess and prepare for events that pose a risk to the company's operations and objectives.
Legislation, Regulation and Government Relations Understand the potential or existing business impacts of legislative and regulatory actions and building relationships with elected officials.
Talent Talent Management Efforts to attract, retain and develop the best talent for the company.
Diversity and Inclusion Providing equal opportunity for employees and executives who represent diversity in all aspects.
Labor Rights Ensuring the fundamental rights of workers, such as freedom of association and the right to collective bargaining.
Employee Engagement Efforts to enhance employees’ commitment to Union Pacific and its goals, through workplace relationships, employee rewards, job responsibilities and personal growth opportunities.
Business Operations Responsible sourcing Maintaining a diverse and responsible supply chain that ensures ethical business conduct and proactively manages its social and environmental impacts.
Environment Emissions & Energy Use Energy use and the resulting direct and indirect greenhouse gas (GHG) emissions (Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions not included in Scope 2).
Land Management & Biodiversity Managing the use and development of land resources and the potential impact of our supply chain and operational activities on biodiversity (the variety and variability of living organisms).
Water Use & Management Water usage and the efficient management of water resources.
Waste Disposal & Reuse Waste generated, recycling and other efforts to divert waste from landfills.
Community Community Involvement & Philanthropy Activities to strengthen the communities within which we operate, including through corporate philanthropy, partnerships and employee volunteering.