Sustainability Overview

We have made strides in other key areas to further benefit the environment. For many years, Kirby has been a leader in the development of modern electric frac equipment, and just last year, we purchased an energy storage solutions business which will help reduce emissions in oilfield and industrial applications. In addition, Kirby is also building a first of its kind diesel electric hybrid towboat for our inland business, and we are partnering with Maersk to provide transportation services for offshore wind projects under a 20-year agreement.

These new offshore wind vessels will utilize diesel electric hybrid technology. We are also collaborating with Maersk to identify alternative and cleaner fuel sources that could displace diesel consumption in the future. We are proud of these technological advancements and will continue to be involved in cutting edge environmentally focused projects that add value and create healthy returns. Kirby is also actively involved in the Blue Sky Maritime partnership which strives to accelerate energy transition in the marine transportation industry. As part of our commitment, several members of Kirby’s team, including myself, serve in key leadership roles, as we strongly believe a collaborative approach is needed in order to progress towards a low carbon future.

While we are proud of the industry working together to address global issues, it is also important to recognize how Kirby addresses issues closer to home. In 2021, Kirby’s Disaster Relief Fund (“KDRF”), which is our in-house charitable organization that provides support to Kirby employees and families impacted by natural disasters and significant losses, raised a record number of dollars. Weather events including Winter Storm Uri and Hurricane Ida greatly impacted our employees with incredible loss, property destruction and distress. Kirby matches all employee contributions towards KDRF at 100% and was able to donate over $750,000 in assistance to our impacted employees as well as their communities. We are committed to our core value of “No Harm to People” – it applies to all facets of our employees lives from work on the waterways, in our manufacturing facilities, and the home.

Our sustainability efforts and goals would not be possible without strong leadership and oversight. Kirby’s Board of Directors oversees Kirby’s performance and management of various ESG issues, including strategy, climate risks, human capital management, and cybersecurity. This past year, Kirby went a step further to reconstitute our Governance Committee as the ESG & Nominating Committee to better reflect its oversight and commitment to ESG issues. In its new form, the committee oversees the Company’s sustainability report, climate change issues and disclosures including TCFD, board nominations, and diversity initiatives.

Overall, while it has been a year filled with unprecedented events, I’m proud of the resilience and achievements that Kirby’s employees have accomplished in the ESG space. This report will do a much better job of highlighting and showcasing our accomplishments and our path to a sustainable future.

At Kirby, we believe a successful business requires an unwavering commitment to a Zero Harm culture, including: No Harm to People, No Harm to Equipment, and No Harm to the Environment. These three tenets are the foundation of our success and underscore our commitment to a sustainable and safe business. Moving liquid products across the waterways and playing a key role in the distribution and services industry is complex and requires significant investments in training, safety protocols, and maintenance to ensure we complete every day without incident and minimize our environmental footprint.

We are proud that our business segments play a critical and positive role in society, supporting industries that ultimately enable a better quality of life for people. For example, petrochemicals, which represent the majority of the cargoes we transport, are used to manufacture everyday consumer products such as cosmetics, electronics, household items, and clothing. Similarly, black oils like asphalt, are critical components for road, infrastructure and housing construction. The demand for these products and many others makes it even more important when we navigate the waterways that our work is done safely and with minimal impact to the environment.

How do we do that? By staying committed to our ‘Zero Harm’ principles, we enable a sustainable business model that reflects good environmental stewardship. Most people are unaware that marine transportation is the cleanest, safest and most efficient mode of surface transportation in the U.S. with far fewer impacts on society as compared to truck or rail. In fact, one barge tow uses significantly less fuel per ton-mile than rail or truck. Marine transportation results in fewer carbon emissions being released into the atmosphere.

In addition to providing a safe and reliable form of transportation, Kirby has taken significant steps over the years to further its commitment to the environment by investing in newer equipment and cleaner technologies. Most notably, since 2000, we have invested more than $500 million in inland boat and engine replacements which significantly improved our efficiencies and greenhouse gas emissions. Additionally, in 2012, Kirby implemented the usage of ultra low sulfur diesel on all vessels, further reducing our emissions profile. We’ve also invested in our barge fleet, including voluntary use of 6 psi pressure relief values on tank barges that effectively reduce cargo vapor emissions as compared to tank barges designed with pressure relief valves with a 1 psi or 3 psi. Further, all of our barges are double hulled to protect cargo tanks. At our barge cleaning facility, residual cargoes are eliminated through use of technology that removes vapors through use of efficient technology that accomplishes 98% reduction by operating beyond regulatory requirements. Distribution & Services is also a key contributor to our sustainability model and is a leader in constructing fracturing equipment that minimizes the impact to the environment, including electric, dual-fuel, and quiet pressure pumping units.

Our commitment to No Harm to People reflects a corporate culture where safety comes first. Our employees are our greatest asset and are key to Kirby’s success. All our employees are empowered with stop work responsibility which gives each of them not only the right but also the responsibility to stop operations on any job where they believe unsafe conditions exist. Kirby is proud to say that our safety statistics, which are monitored by the management team and our Board, have significantly declined over the years despite integrating several significant acquisitions. Beyond safety, Kirby is also committed to creating a workplace environment where all employees are treated with respect and dignity. For example, all employees are required to sign and uphold our Business Ethics Guidelines. For our suppliers, we developed a separate Vendor Code of Conduct that support our core values. Providing a safe and respectful working environment on the boats, in the field, and at the office are fundamental in our business and support our core values of integrity and people.

At Kirby, good governance and board oversight are also critical to our sustainability culture. Our board has broad industry experience ranging from marine transportation and oilfield services to academia. This past year Kirby elected a new member, Tanya Beder, making her the second woman to serve on our board. We believe her vast skill set, including operational and risk management, will add significant value to our company’s success in the future. While the board has always overseen our safety and ethics programs, in 2019, we expanded their responsibilities to formally include oversight of our ESG program. With this change, we believe their broad knowledge and expertise will further help guide Kirby on our sustainability path.

While Kirby has done many great things over the years to ensure a sustainable business model, we recognize that we cannot rest on our past successes. In 2020, Kirby is committed to enhancing the data we gather to better understand our impact on the environment and enable continuous improvement. We believe aligning our ESG disclosures with the SASB (Sustainability Accounting Standards Board) and TCFD (Task Force on Climate-related Financial Disclosures) standards and frameworks will further raise our standard and reinforce our commitment to do the right thing. Through these actions, all our stakeholders, including our employees, customers, vendors, and communities, can see that Kirby is indeed committed to a sustainable business model and No Harm to people, equipment, and the environment – every day.