If the government wants to halve emissions from the transport sector by 2030 compared with the 2005 baseline, this will require innovation and technological development on the part of Norske tog.
Urbanisation is a global trend that is increasing the demand for efficient and environmentally friendly transport in urban areas. The railway is vital for conveying people into and out of most major Norwegian cities. The Oslo region, for example, is one of Europe’s fastest-growing regions, and here the railway plays a crucial role in connectivity and climate. Norske tog’s most important social function is laying the foundations for more people choosing to use public transport for their daily travel, by ensuring a sufficient supply of – good-quality – rolling stock. Norske tog must follow up the significant investments made in expanding and upgrading the rail network in Norway by making sure there is sufficient capacity in terms of rolling stock.
The latest report from the UN Intergovernmental Panel on Climate Change shows that climate change will be dramatic, with a big difference between the impact of a rise of 1.5 or 2 degrees in global temperatures. This is why there is a need for much greater and faster adjustment than has been the case previously. The Norwegian government’s climate policy seeks to cut emissions as quickly as possible. The government has set a goal for Norway to be climate neutral in 2030 and to be a low-emission society in 2050, by reducing greenhouse gas emissions by 90-95%.
If the government wants to halve emissions from the transport sector by 2030 compared with the 2005 baseline, this will require innovation and technological development on the part of Norske tog. Norske tog must play its part with more energy-efficient solutions and by exploring the scope of opportunity for low- and zero-emission solutions on non-electrified sections of railway. Rolling stock has a useful life of 20-30 years, so purchases made in the next few years will have a major impact on greenhouse gas emissions from the railway for several decades to come.
The population is growing, and more and more people are travelling by train. The rolling stock must be used more efficiently, and new trainsets must be purchased. Passengers expect higher levels of travel comfort, as well as better mobile coverage to enable them to combine their journeys with work or entertainment. This requires an upgrade of the rolling stock.
Norske tog has a key role to play in achieving a more efficient and climatefriendly transport system. Things must run smoothly towards the Green Shift.
Norske tog’s guidelines
Norske tog has established guidelines for its work on corporate social responsibility, and these are integrated in the company’s management systems. An ethical framework has been developed for dialogue with internal and external stakeholders. Norske tog observes the following basic principles for exercising corporate social responsibility:
- Norske tog shall work in accordance with the principles of the UN Declaration of Human Rights and the ILO’s core conventions
- Corporate social responsibility is integrated in the company’s strategic basis and values
- Norske tog shall contribute actively to reducing the environmental impact of the transport sector
- The company shall work actively to counter all forms of corruption
- All managers are responsible for ensuring that their departments attend to corporate social responsibility as part of their business operations
Based on the guidelines and principles Norske tog follows, six focus areas for work on corporate social responsibility were defined and reported on in 2017. In 2018, Norske tog added a further two themes to expand the focus areas and hence our corporate social responsibility. The company seeks to contribute actively to a sustainable society and working life for the future, and in the sections below highlights how Norske tog contributes to the work to achieve the UN Sustainable Development Goals (SDGs). Norske tog considers that being aware of the SDGs and working actively to achieve them generates added value for the company.
By raising awareness both internally in the company and among suppliers and business partners, Norske tog can contribute to general value creation across the value chain. In the long term, this could contribute to better and more railways for the money.
Environment (reduce emissions, innovation)
The Paris Agreement sets a clear course for future, global climate initiatives, and businesses and society will have to adjust to new climate goals. The government has set a goal for Norway to be climate neutral in 2030 and to be a low-emission society in 2050, by reducing greenhouse gas emissions by 90-95%. The government further wants to halve emissions from the transport sector by 2030 compared with the 2005 baseline (*taken from the government’s ‘Granavolden Platform’).
Greenhouse gas emissions in the transport sector can be reduced by switching to forms of transport with lower emissions, by facilitating lower demand for transport or by lowering emissions from individual means of transport.
Norske tog is working to reduce energy consumption and greenhouse gas emissions from its own operations. This involves using technical solutions that reduce energy consumption on existing trains and replacing old rolling stock with new, more energy-efficient and environmentally friendly trains.
In 2018, Norske tog joined forces with Feral on a pilot project to develop new technology that can be retrofitted on diesel engines. This technology will help to reduce greenhouse gas emissions and consumption of fossil fuels for Norske tog’s diesel trains. The company is also participating in a newly established, interdisciplinary R&D group with the Norwegian Railway Directorate that will look at how the rail sector as a whole can contribute to more effective climate and environmental measures.
Other areas where Norske tog can see that the company’s work is helping to reduce emissions include purchasing of new trainsets. When drawing up the specification of requirements for tenders, Norske tog includes criteria, among other things, for facilitating simple upgrades of on-board systems and smart interior solutions for increased capacity, but with the same high level of comfort for passengers. This enables better resource utilisation for Norske tog’s trainsets, and the possibility of straightforward adaptation to new technical solutions and capacity without increasing the environmental impact.
Labour and human rights
Norske tog shall promote social interaction in the company characterised by respect and consideration for others. Fundamental human and employee rights shall be respected both internally and in interactions
with business partners, customers and others who are impacted directly or indirectly by the company’s activities.
Norske tog conducts its operations in Norway. Issues relating to human rights and employee rights are handled effectively in arenas that bring employees and the company’s management together for this purpose. Employees in Norske tog have rights that are clearly defined in collective agreements and conventions. The employees are represented on the company’s Board of Directors.
Based on statutory requirements and Norske tog’s ethical guidelines, the work on non-discrimination and equality is expanded on in the company’s HR policy principles. Among other things, these state that:
- All employees in Norske tog are equal, irrespective of gender, age, disability, sexual orientation, or religious, ethnic or cultural background.
- We seek a wide and diverse range of managers and employees where individual characteristics are respected and valued.
- Increased gender balance is desirable at all levels of the company, and shall be emphasised in recruitment and skills development.
Women represent approx. 13% of the workforce at Norske tog. Women make up 66% of shareholder-elected members of Norske tog’s Board of Directors and 40% of the company’s management.
Norske tog’s goal is to achieve a good gender balance in the company by means of clear guidelines from management and systematic work. Important measures include:
- A moderate gender quota when recruiting to a number of job categories where men are particularly dominant, provided the candidate meets the qualification requirements.
- Calling at least one female candidate to the final round of interviews for most positions where feasible.
- Management focus on avoiding gender-discriminatory attitudes and behaviours.
- Careful consideration of how applicants are evaluated and the criteria applied.
Norske tog’s goal is increased diversity in the company. Important action areas include:
- Thorough and bona fide handling of reports of or suspicions of discriminatory behaviour.
- Emphasising Norske tog’s policy on diversity and equality in job advertisements.
- Calling at least one candidate from an immigrant background to interview for most positions where feasible.
- Management focus on ethnic breadth and diversity adds value.
Norske tog has established a whistleblower channel pursuant to the requirements of the Norwegian Working Environment Act.
Norske tog’s goal is zero injuries to people and zero harm to the environment and society, and the company works purposefully and systematically to achieve this. No injuries/harm arising from the company’s operations were reported in 2018.
- Norske tog’s operations shall not cause serious injury to persons or serious harm to the environment or material assets.
- Norske tog’s business activities shall proactively prevent undesired events and have the requisite ability to handle critical situations The core activity shall, wherever possible, be maintained in threat and crisis situations.
- Learning and continual improvement shall be facilitated. Safety-related information shall be understandable and easily accessible in the organisation. No one shall be penalised for reporting errors and challenging situations.
- The safety work must be tailored to the nature of the operations and be developed so as to be able to satisfy changed requirements and conditions.
Management is responsible for employees at all levels developing good attitudes and prioritising safety in their work. If deviations in goal achievement or from specified safety requirements are revealed, the responsible manager shall implement corrective measures.
Norske tog works to promote a strong anti-corruption culture in the company. Norske tog shall actively prevent undesired behaviour and shall use routines, controls and training to equip its employees to handle difficult situations.
Norske tog has established ethical guidelines for corporate social responsibility that, among other things, address the company’s stance on human rights, employee rights and anti-corruption.
Norske tog makes major purchases of both trainsets and other goods and services linked to management of the trains. Since this type of purchase is often of high economic value, it is important that employees are aware of the company’s work on anti-corruption in their dealings with suppliers and business partners.
Responsible purchasing and procurement of new trains
Norske tog sets ethical requirements for the company’s suppliers and maps the risk of any breaches of these requirements as part of the procurement process. Each supplier must undertake to follow international conventions and facilitate inspections of working conditions throughout the supply chain by Norske tog or relevant authorities. Norske tog seeks to work with suppliers on continual improvements to safeguard good, safe working conditions.
For Norske tog, responsible purchasing also involves consideration of external factors such as climate and the environment. Importance is attached in this context to the entire life cycle of the trains, from production to use and, finally, scrapping. Norske tog seeks to choose trains and train systems that can easily be updated or changed to be able to use new technology or energy sources.
In 2018, Norske tog began preparations to procure new local trains to replace the Class 69. An agreement was also entered into concerning bimodal trains, i.e. trains that can run on both electricity and diesel. These will replace the Class 92 multiple units that currently operate on Trønderbanen, the Trøndelag Commuter Rail.
Norske tog works systematically to accommodate capacity increases, and the demand for replacements, rationalisation and standardisation of the train fleet. The final option on FLIRT trains from Stadler was triggered in 2018, with the last trainset estimated to be delivered by the end of 2022.
The company has established routines for whistle- blowing on criticisable conditions and has an external whistleblowing channel to ensure that whistleblower’s interests are safeguarded. In this way, Norske tog seeks to facilitate a high level of transparency for the company’s operations.
These routines shall be made known to all employees in the company and among consultants and suppliers working for Norske tog.
Norske tog has set high standards for customer satisfaction. The company’s customers are the train operating companies that take part in competitions for new traffic packages and win the tenders, as well as Norwegian State Railways (NSB) via its direct purchase agreement with the Norwegian Railway Directorate.
NSB’s customer satisfaction survey for 2018 reports a very high level of satisfaction with the trains it operates. The train fleet as a whole scored 79 out of 100 for how satisfied passengers are overall with the train type they travel on. Although rail passengers are not direct customers of Norske tog, they are an important stakeholder group, which is why the company uses passenger satisfaction as a measure of its own goal achievement.
The train operating companies’ satisfaction with Norske tog reflects the passengers’ satisfaction with the train operating companies, and the strategic measures and decisions taken by Norske tog with respect to them.
For Norske tog, stable framework conditions and adequate equity and liquidity are vital prerequisites for securing low financing costs. The company seeks to achieve the highest credit rating. This is important, as Norske tog’s investment requirements have to be covered by borrowings and external capital.
Norske tog’s goal is to have an equity ratio of 25%, and the company’s owner requires a return on equity of 5%. At 31 December 2018, Norske tog had a credit rating of A+ and an equity ratio of 21%.
Investing for the future and society
Norway is often seen as a pioneer when it comes to sustainability. Both the public and private sectors are exploring the scope of opportunity for areas such as renewable energy, carbon capture and storage, and exploitation of the marine environment. Neither is it any secret that Norwegians also have a fascination for new technology and innovation in the private sphere. At the end of 2018, the Norwegian Electric Vehicle Association reported that just over 200,000 electric vehicles had been registered in Norway, and the average person owns four mobile devices.
Through the UN Sustainable Development Goals, Norway has also committed to building solid infrastructure, facilitating innovation and infrastructure development, and building sustainable societies with good public transport services. These are topics that Norske tog works purposefully on every single day. This is why Norske tog also plays an important part in society achieving the UN Sustainable Development Goals while simultaneously discharging the social function assigned to it.
Sustainable public transport in Norway
Norway’s public transport sector works together towards a common goal of getting more people to use public transport. Norske tog works purposefully towards being able to offer the best trains to the train operating companies and hence the best travel experience to the passengers. Several of Norway’s railway stations are also important transport hubs, where development of current train services plays a part in facilitating further passenger growth.
Procuring new trains and expanding the railway infrastructure not only facilitate improved customer satisfaction for current passengers but also potential passengers deciding to travel by train. By thinking holistically, Norske tog and the rest of the railway industry contribute to sustainable towns and communities. The article on “Focus areas” on page 35 examines this topic.
Infrastructure for the future
Norske tog shall help to make it easy to travel by public transport and to make this choice. The company shall do this by supplying a sufficient number of safe, reliable and up-to-date trains to the train operating companies servicing the Norwegian rail network.
During 2019, Norske tog aims to issue tenders for new local trains. These shall cover Class 69 trainsets procured in the period 1975-1993, which are ripe for replacement.
The Norwegian rail network is an important element of both urban and hub development. And in order for Norske tog to deliver on its social function, the company must be at the forefront in areas such as standardisation of the train fleet and planning future train services.
The article “The local train – the everyday hero” on page 44 explores this theme.
Innovation for the future and now
Norske tog has been assigned the task of facilitating on-board internet coverage on Norway’s railways. The current solution is unfortunately not up to the mark for large numbers of Norway’s commuters. These represent a large part of the target group who, among other things, want to be able to work on the train, read a newspaper online or stream a film. Norske tog has therefore considered, from a passenger perspective, what provides the best offer for passengers. A tender competition for new mobile signal boosters was launched in 2018.
Testing of the new ERTMS signalling system, on the eastern section of the Østfold Railway, has started to provide promising indications for what can be expected in terms of improved punctuality. Norske tog is responsible for installing the on-board system, while Bane NOR is responsible for the infrastructure. The two companies are working together to make the Norwegian rail network even safer and more punctual.
Norske tog is also working on innovations in other areas, but these are not necessarily so obvious. Examples include the dimensions of train doors for faster and easier boarding and alighting, and smart maintenance of the trains. The latter will be able to provide more “railway for the money” thanks to more efficient resource management and shorter downtimes for trainsets needing repairs.
The articles “Internet coverage – an important element of good travel experiences” and “Innovation and digitalisation – arriving safely and on time” on pages 52 and 60 explore this theme.
Norske tog’s stakeholders
Stakeholders in Norske tog are defined as all individuals, companies, organisations and institutions that can have a material influence on the company’s ability to achieve its goals or that can be expected to be materially impacted by its operations.
Norske tog seeks to have a relatively stable list of stakeholders over time, but will nevertheless review and update the list at regular intervals. The overview reproduced below is a revised list for 2018. In the event of major procurement projects, Norske tog carries out separate analyses of and interviews with key stakeholders.
The key stakeholders are:
Owner, represented by the Norwegian Ministry of Transport and Communications
There is close and positive dialogue with the Ministry of Transport and Communications. Dialogue with politicians outside this relationship takes place in agreement with the Ministry.
Norske tog shall follow and comply with all the acts and regulations relevant to its operations. Approval of modifications and procurements requires a good flow of information between Norske tog and the Norwegian Railway Authority. Norske tog is in dialogue with – and makes deliveries to – the Norwegian Railway Directorate on an ongoing basis.
Norske tog’s customers are the train operating companies awarded traffic packages on the Norwegian rail network. At present, Norske tog has two customers: NSB and Go-Ahead. This number may increase in light of the tender procedures for Traffic Packages North and West. As well as supplying trains, Norske tog shall provide technical support to enable the customer to operate the trains in the best possible way.
In addition, Norske tog defines Norway’s rail passengers as important stakeholders, even though they do not have a direct customer relationship with Norske tog. Norske tog receives customer satisfaction surveys from the train operating company(ies) each year. These provide a snapshot of how the company and the specific train is perceived, and provide feedback as to which areas Norske tog should focus on going forward.
Procurements and modifications often span many years and require good collaboration with the company’s suppliers. Norske tog and its suppliers have a shared interest in delivering a good product to the customer.
A supplier conference was organised in 2018.
Norske tog is a small player in a European context and therefore seeks membership of organisations that represent common interests and address common needs for information and collaboration within relevant technical areas.
Special interest organisations
There are a number of special interest organisations within the rail sector that can provide valuable input, experiences and opinions beneficial to Norske tog in its strategic work.
Norske tog is dependent on debt financing in national and international bond and certificate markets. Norske tog will explore the possibility of green bonds from 2019.
Norske tog’s employees possess unique expertise within the types of train used on the Norwegian rail network, and it is important to retain and further develop the knowledge within the organisation. For more detailed information, please refer to Norske tog’s employee strategy.
The company shall be an attractive workplace and shall ensure a good, professional working environment with open communication both inwards and outwards to create trust and credibility.
Norske tog has carried out a materiality analysis based on the stakeholders and their needs, placing these in context with the company’s strategic goals.
Norske tog procures, owns and manages trains based on information, analyses, strategies, and the requirements and preferences of stakeholders. Major procurements and upgrades of trains are complex processes extending over several years. These processes are significant to the trains’ useful lives, energy consumption, maintenance costs and safety. Norske tog is committed to having a value chain that promotes a flow of information and collaboration between train operating companies, manufacturers and workshops.
The materiality analysis has been carried out by means of an internal review, with key persons in the company contributing insights and evaluations from their respective technical areas, using the previous analysis as a basis for discussion. This method provides a way of collating a broad range of inputs and views from the key stakeholders, gathered in dialogue over time.
Norske tog shall continue to facilitate good and effective implementation of the principles currently followed by the company. Circumstances linked to the company’s corporate social responsibility shall be mapped on an annual basis, and Norske tog will further develop stakeholder dialogue and carry out new materiality analyses.
Reporting for 2018
The materiality analysis shows that a handful of themes are of great significance to Norske tog’s stakeholders, while also being of great significance to the company’s own goal achievement.
For a further discussion of the selected themes, please refer to the chapter “Focus areas” earlier in the Annual Report. For more information on the company’s strategy for trains, technology, employees, customers and finance, please refer to Norske tog’s website.