Sustainability Overview

Message from CEO David Grzebinski

Kirby has a strong and long-standing commitment to environmental, social, and governance (“ESG”) ideals, which serve as the foundation for its culture and core values. Kirby’s core values are embedded in its “No Harm” objectives: “No Harm to People, No Harm to Equipment, and No Harm to the Environment.” Treating our employees well, supporting the communities in which we operate, and respecting the environment are not just good for business, but they are the right thing to do. Despite the disruptive challenges caused by COVID-19 variants early in the year and abnormal operating conditions due to historic low water conditions on the Mississippi River, the Company continued its focus on ESG initiatives in 2022.

Part of Kirby’s strategy toward sustainability includes engagement and participation with key stakeholders including investors, trade associations, and customers. Listening to the concerns of key stakeholders has given management the opportunity to make sure we understand the needs of the communities in which we operate. In 2022, Kirby was able to participate and serve in leadership roles in impactful organizations, including the Blue-Sky Maritime Coalition, which brings together waterborne transportation companies to focus on decarbonization initiatives. This past year, Kirby also saw increased engagement with customers, which helped Kirby strategize opportunities and initiatives to help further sustainability progress with the companies we serve. Additionally, our Lead Independent Director and members of the management team took a proactive approach in meeting with investors to discuss and review their priorities into our ESG initiatives. This increased participation gave us a better understanding and new insights to help us progress our sustainability journey.

In 2022, the Company continued to advance its own environmental goals and objectives as well. With executive management and board-level oversight, Kirby developed its first short-term carbon emissions reduction goal in 2020 and met the goal early. In 2022, the Company raised the bar by aiming to achieve a 40% reduction of carbon emissions per barrel of capacity by 2040. Currently, the Company is developing many approaches to achieve this new objective. Testing out alternative fuels, finding operational efficiencies, and investing in new technologies are a few initiatives the Company is exploring to accomplish its targets. Additionally, I’m pleased to share that Kirby’s emissions dashboard has been rolled out for internal use, allowing us to better understand our emissions performance at a more granular level.

Kirby will be one of the first, if not the first, inland marine transportation companies to own and operate a diesel-electric hybrid towboat in the United States moving bulk liquid crude oil or refined petroleum products. This design was created in-house through a partnership between two of the Company’s wholly owned subsidiaries, Stewart & Stevenson and San Jac Marine, Kirby’s own shipyard. The Company anticipates that the vessel will be ready for service in mid 2023. It will operate in the Houston Ship Channel using shoreside recharging stations at the Company’s marine facilities. Kirby is proud of this project and is encouraged by the customer feedback and support. In addition, all of Kirby’s marine transportation facilities in Texas are powered by renewable energy. Thus, when the hybrid electric towboat is recharging, the ultimate source will be green energy. The anticipated emissions savings could be up to 80% when compared to comparable towboats with conventional engines.

Kirby has made significant strides in our ESG goals and initiatives due to good governance and leadership. While I have touched on many environmental achievements and initiatives, it is important to stress our accomplishments elsewhere and in what lies ahead. As stated in the beginning, the Company has always stressed the importance of “No Harm to People.” This value not only impacts our employees but also plays a key role in how we operate our business on a day-to-day basis. Our employees are at the heart of everything we do, and we celebrate the many successes the company has achieved with our talented and diverse workforce. We believe that training our employees is crucial to upholding this value, whether through our business ethics guidelines, diversity, or safety. I’m also happy to share that we have recently implemented human rights training for all of our employees.

In 2022, we also welcomed two new members to our Board of Directors, reflecting engagement with our stockholders and other stakeholders. Each of them brings extensive experience and leadership to both our business segments, further supporting our ESG initiatives. From our Board of Directors’ guidance down to the focus and determination of our employees, our accomplishments have been a team effort as a result of continued focus at all levels of the organization. As we reflect on our sustainability journey, I’m proud of how far we have come. Moving forward in 2023, I’m excited about continuing our achievements and making further progress.

Sustainability Report Highlights

Guiding ESG Frameworks and Standards

Kirby is relying on the following frameworks and standards to guide our ESG journey.

“The Kirby Way”

Safety

Our guiding principle is No Harm to people, the environment, or equipment. Safety is at the core of everything we do and always drives our decision-making.

People

Our people make the difference. We invest in the tools and resources to empower our employees, and we promote a workplace that values mutual respect, knowledge, and teamwork.

Integrity

Do the right thing by having the highest ethical standards while always being transparent and accountable for our actions.

Excellence

Creating value for our customers and shareholders by providing the highest quality service and products.

Community

Sharing our success with each other and the communities we live and work in by protecting the environment and encouraging volunteerism.

Kirby Contributes to a Better Quality of Life Every Day

Kirby’s products and services are vital to the development of common end-products such as those shown above and used by people daily. Our involvement stretches from our marine transportation business, which safely and efficiently moves millions of cargo tons of petrochemicals, refined products, and agricultural liquids annually, to the environmentally friendly oilfield equipment manufactured by Kirby Distribution and Services. We are proud to play a critical role in the supply chain of countless products that create a better quality of life for people around the world.

Stakeholder Engagement and Participation

Blue-Sky Maritime Coalition (BSMC)
– Kirby is a founding member and serves in leadership positions (Board of Director & Treasurer)
– BSMC members recognize the need to address global climate change and are committed to accelerating the transition of waterborne transportation in the United States and Canada toward net zero GHG emissions through development of infrastructure, encouraging innovation, and promoting policies

Getting to Zero Coalition
– The coalition acknowledges that an urgent and equitable decarbonization of the maritime supply chain by 2050 is possible and necessary, with urgent action to be taken immediately and over the coming decade

Business Network for Offshore Wind (BNOW)
– Kirby is a leadership member and also serves in the network’s Gulf of Mexico working group
– BNOW is a nonprofit, educational organization with a mission to develop the offshore wind renewable energy industry and its supply chain

Climate-related Risks and Opportunities

Kirby’s Marine Transportation Group moves millions of cargo tons of petrochemical, refined, and agricultural products annually. Demand for these products has increased over the years and according to the International Energy Association is expected to continue moving forward. Therefore, Kirby is met with a dual challenge with respect to emissions from transporting said products and climate-related risks and opportunities. Below is a summary of the framework used in Kirby’s report on the Task Force of Climate-Related Disclosures.

Governance

Board oversight
– ESG & Nominating Committee: ESG issues
– Audit Committee: Climate-related risk and opportunities
Management oversight
– Climate-related risk and opportunities
– ESG/Sustainability issues

Risk Management

Our enterprise risk management process, Kirby is performing a scenario analysis of risks and opportunities associated with changing weather patterns that could have significant impact on our operations
– Hurricane scenario
– High water scenario
– Energy technology transition

Strategies with Examples

Transition Risks
– Policy and Legal: Oil and gas regulations changes
– Technology: Transition to low-emissions equipment, energy technology
– Market: Eco-friendly fracking equipment
– Reputation: Cargo spills

Physical Risks
– Acute: Hurricanes
– Climate: Flooding

Target and Metrics

– Kirby Corporation is committed to reducing the negative effects of climate-related risks and developing strategies to capture opportunities

– To address its marine fleet’s CO₂e emissions, the Company has established a 40% emissions reduction target per barrel of capacity through 2040

– See the Environmental page for more information