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Transport & Logistics

“Sustainability is about business viability, not altruism.”

24 Jun 2011, by Informa Insights

Rail transport is regarded as the most viable option to make mobility more sustainable on an economical, social and environmental level. We had the chance to speak with Ash Salardini, Economist at the Australasian Railway Association (ARA) about the chances and challenges that the concept of sustainability holds for the rail industry.

Question: Sustainability is a very conceptual term and it can be difficult to get to the heart of what sustainability actually encompasses. The ARA will be hosting a Rail and the Sustainability conference for the first time this year. What kind of debate would you like to inspire in the industry and across other sectors?

Ash Salardini: We would like to move away from the notion that sustainability is some sort of non-core business issue that is grounded in altruism.  Sustainability is about conducting business in a manner that will enable entities to thrive long into the future.  As such, sustainability is about ensuring business practices that promote a healthy physical and social environment, promote accountability to stakeholders and ensures robust financial stewardship.

The Global Financial Crisis has demonstrated the effects when sustainability is not a high business priority.  The business focus on short-term financial gains nearly brought about the collapse of the world economy.  Research shows time and again that companies who value sustainability are the companies that provide the greatest shareholder returns in the long-term, perform at a higher level in terms of innovation and entrepreneurialism, and outperform the market in recruiting and retaining workforce talent.

Question: The carbon price discussion, the population debate and a number of different recently released government policies are emphasising the need for Australia to act on issues of sustainability across all industry sectors. What role can rail play to ensure a better future? What developments do we need to see to get there?

Ash Salardini: Rail can be the solution to reducing transport carbon emissions, improve Australia’s energy security and help ease urban congestion. One passenger train can remove up to 500 cars off the road, while a freight train can remove up to 150 trucks.  When compared to road transport, passenger rail is 2-3 times more energy efficient and containerised freight rail is 3-4 times more energy efficient.  Rail is the only mode of transport that has widely adopted the use of stationery electricity sources, reducing Australia’s reliance on imported liquid fuels.

However looking at rail, and transport more generally, in isolation of urban and supply chain planning will yield poor sustainability outcomes.  Containerised freight rail is a prime example of this.  Despite the advantages of rail, containerised freight rail movements are underutilised.  This is an outcome of poor planning where rail terminals have been located far from industrial and warehousing centres necessitating long and expensive truck journeys through already congested urban areas.  We have approved residential developments in and around our critical freight infrastructure, constraining freight capacity growth in our capital cities.  Integrated land use and transport planning is the key policy development that will ensure a sustainable transport sector.

Question: How important do you rate the integration of different transport modes in order to make mobility across Australia more sustainable?

Ash Salardini: An integrated transport system that promotes mobility is vitally important to Australia’s productivity and the liveability of our local communities.  However, we need to take a step back and ask ourselves why we are traveling and why we crave higher and higher levels of mobility.

We need to get smarter about urban planning and reduce the need for excessive mobility.  Australians on average have one of the longest commutes to and from work in the advanced world. Some people commute more than 100 kilometres a day to get to their workplace.  Trying to provide more and more transport services to facilitate such long journeys is unsustainable in itself.  We need to have better integrated urban and transport planning where people can live closer to their place of work and where they have local access to amenities and public services

Question: What other industries can the rail industry learn from when it comes to improving their sustainability record?

Ash Salardini: I believe rail has a very good sustainability story to tell but we are not very good at understanding, quantifying and communicating our sustainability credentials.  We can learn a lot from the banking industry and companies such as Westpac when it comes to understanding sustainability.

Companies such as Westpac are very sophisticated in understanding and incorporating sustainability issues into their business practices.  I think the banking sector has a good understanding of issues that will be financially beneficial for them and have positive environmental and social outcomes.  For example, banks stand to financially gain from an emissions trading scheme (ETS) and have been strong advocates for an ETS, at the same time they can point to positive social and environmental outcomes from an ETS.  This is about business viability not altruism.

Question: New technologies and renewable energies are promising a more sustainable transport future. In what area do you see the greatest need for investment and research in innovation?

Ash Salardini: We need to build stronger institutional capabilities that encourage greater investment and research into innovation.  Throughout North America and Europe, governments actively partner with the transport industry to develop innovations into sustainable transport.  The European Commission has initiated the Marco Polo project that fosters R&D into sustainable transport by providing grants for sustainable transport proposals, joint industry-government research and development, and subsidies and incentives to end users of sustainable transport services.

The Australian rail industry has the potential to harness natural gas in its freight operations.  This will have significant benefits in terms of carbon and particulates emissions reductions, and ensure Australia’s energy security through the use of indigenous sources of energy.  However, gas engine technologies and its applications in rail are commercially unproven and require significant R&D.  The industry cannot afford to bear these costs and risks alone and requires Government assistance to progress this proposal.  Unfortunately there is no formal process to initiate or assess the viability of this proposal.

The ARA is hosting its inaugural Rail and the Sustainability conference on the 26th & 27th September 2011 in Canberra. For more information about the conference and for registration, please visit the event website:

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