Sustainability at Xylem

Our sustainability strategy ties directly to Xylem’s business strategy, enabling sustainability to be effectively and seamlessly integrated into all we do. In March 2015, we finalized a set of ambitious five-year sustainability goals that are aligned with the four key areas of our sustainability strategy: our offerings, our operations, external engagement, and organization and culture. The goals continue to be incorporated into our business operating planning process, and progress is evaluated through various measures including our goal deployment process. In the spirit of continuous improvement, we are reviewing the best ways to track our progress against some of the harder-to-measure metrics. The chart below illustrates our progress as of the end of 2015.

Sustainability Strategy Element

Goals

Tracking Mechanism

Metrics as of 12/31/15

Our Offerings

  • Improve product energy efficiency of specific Xylem product lines

Percentage gain in energy efficiency of products made, sold and/or introduced, and energy saved by new product introductions for specified Xylem Growth Centers

  • Transport Growth Center:  Average product efficiency of submersible wastewater pumps have increased by 0.3% - from 61.3% in 2014 to 61.6% in 2015.
  • Applied Water Systems Growth Center: Nine new pump product lines replaced legacy product lines, increasing the product efficiencies between 1.6% and 12%.

  • Increase vitality index to 25% by 2020 to drive product innovation and efficiency

Percentage of sales from new products launched in the past five years

18.3% of sales are from products launched in the past five years.

Our Operations

  • Reduce Xylem water use by 25% by 2019*

Cubic meters (M3) of total water withdrawals at Xylem-operated sites per dollar of revenue

0.4% reduction in water usage intensity

  • Reduce greenhouse gas (GHG) emissions intensity by 20% by 2019*

Carbon dioxide equivalent (CO2e) from Scope 1 & 2 emissions per dollar of revenue

3.1% reduction in GHG intensity, net of renewable energy

  • Reduce waste sent to landfill by 20% by 2019*

Percentage of total waste sent to landfill per dollar of revenue

46.0% reduction

  • Reduce injury frequency rate to less than 0.5 and injury severity rate to less than 6.0 by 2019*

Injury frequency and severity rates

  • Injury Frequency: 1.2
  • Injury Severity: 18.7

  • Achieve 100% environmental compliance at all manufacturing and service sites

Number of regulatory compliance notices of violations (NOVs)

3 environmental notices of violation

* from 2014 baseline

External Engagement

  • Increase impact of Xylem Watermark, our corporate citizenship program through investments to nonprofit partners

Number of projects in new growth markets; increase in employee contributions

  • New projects: 14% increase
  • Employee contributions: 33% decrease

  • Increase employee involvement in Xylem Watermark by 15 % year over year

Leadership, management and employee participation in Xylem Watermark engagement activities

Total employee volunteer hours: 330% increase*

  • Position Xylem as a leading advocate for sustainable water policy worldwide

Number of visible leadership roles in industry organizations and speaking engagements at industry thought leader events

New in 2015:

*All hours are tracked with MyWatermark, our employee engagement interactive website.

Organization and Culture

  • Improve employee engagement on sustainability

Number of sustainability communications to employees

Finalizing metrics to measure progress

Employee perception ratings

Finalizing metrics to measure progress

Percentage of sites with Green Teams implementing Xylem Eco-Efficiency Easy Tool

95% of Xylem sites have established Green Teams. Our major sites are currently using the Eco-Efficiency Tool, and Xylem plans to implement its use at sites with 50 or more employees in 2016.

Sustainability Strategy Element:
Our Offerings

Goal:
Improve product energy efficiency of specific Xylem product lines

Tracking Mechanism:
Percentage gain in energy efficiency of products made, sold and/or introduced, and energy saved by new product introductions for specified Xylem Growth Centers

Metrics as of 12/31/15:

  • Transport Growth Center:  Average product efficiency of submersible wastewater pumps have increased by 0.3% - from 61.3% in 2014 to 61.6% in 2015.
  • Applied Water Systems Growth Center: Nine new pump product lines replaced legacy product lines, increasing the product efficiencies between 1.6% and 12%.

 

Sustainability Strategy Element:
Our Offerings

Goal:
Increase vitality index to 25% by 2020 to drive product innovation and efficiency

Tracking Mechanism:
Percentage of sales from new products launched in the past five years

Metrics as of 12/31/15:
18.3% of sales are from products launched in the past five years.

 

 

Sustainability Strategy Element:
Our Operations

Goal:
Reduce Xylem water use by 25% by 2019*

Tracking Mechanism:
Cubic meters (M3) of total water withdrawals at Xylem-operated sites per dollar of revenue

Metrics as of 12/31/15:
0.4% reduction in water usage intensity

 

Sustainability Strategy Element:
Our Operations

Goal:
Reduce greenhouse gas (GHG) emissions intensity by 20% by 2019*

Tracking Mechanism:
Carbon dioxide equivalent (CO2e) from Scope 1 & 2 emissions per dollar of revenue

Metrics as of 12/31/15:
3.1% reduction in GHG intensity, net of renewable energy

 

Sustainability Strategy Element:
Our Operations

Goal:
Reduce waste sent to landfill by 20% by 2019*

Tracking Mechanism:
Percentage of total waste sent to landfill per dollar of revenue

Metrics as of 12/31/15:
46.0% reduction

 

Sustainability Strategy Element:
Our Operations

Goal:
Reduce injury frequency rate to less than 0.5 and injury severity rate to less than 6.0 by 2019*

Tracking Mechanism:
Injury frequency and severity rates

Metrics as of 12/31/15:

  • Injury Frequency: 1.2
  • Injury Severity: 18.7

 

Sustainability Strategy Element:
Our Operations

Goal:

  • Achieve 100% environmental compliance at all manufacturing and service sites

* from 2014 baseline

Tracking Mechanism:
Number of regulatory compliance notices of violations (NOVs)

Metrics as of 12/31/15:
3 environmental notices of violation

 

 

Sustainability Strategy Element:
External Engagement

Goal:
Increase impact of Xylem Watermark, our corporate citizenship program through investments to nonprofit partners

Tracking Mechanism:
Number of projects in new growth markets; increase in employee contributions

Metrics as of 12/31/15:

  • New projects: 14% increase
  • Employee contributions: 33% decrease

 

Sustainability Strategy Element:
External Engagement

Goal:
Increase employee involvement in Xylem Watermark by 15 % year over year

Tracking Mechanism:
Leadership, management and employee participation in Xylem Watermark engagement activities

Metrics as of 12/31/15:
Total employee volunteer hours: 330% increase*

 

Sustainability Strategy Element:
External Engagement

Goal:
Position Xylem as a leading advocate for sustainable water policy worldwide

Tracking Mechanism:
Number of visible leadership roles in industry organizations and speaking engagements at industry thought leader events

Metrics as of 12/31/15:

New in 2015:

 

 

Sustainability Strategy Element:
Organization and Culture

Goal:
Improve employee engagement on sustainability

Tracking Mechanism:
Number of sustainability communications to employees

Metrics as of 12/31/15:
Finalizing metrics to measure progress

 

Sustainability Strategy Element:
Organization and Culture

Goal:
Improve employee engagement on sustainability

Tracking Mechanism:
Employee perception ratings

Metrics as of 12/31/15:
Finalizing metrics to measure progress

 

Sustainability Strategy Element:
Organization and Culture

Goal:
Improve employee engagement on sustainability

Tracking Mechanism:
Percentage of sites with Green Teams implementing Xylem Eco-Efficiency Easy Tool

Metrics as of 12/31/15:
95% of Xylem sites have established Green Teams. Our major sites are currently using the Eco-Efficiency Tool, and Xylem plans to implement its use at sites with 50 or more employees in 2016.

*All hours are tracked with MyWatermark, our employee engagement interactive website.

 

Our Sustainability Organization

At Xylem, all employees are helping to advance our sustainability practices and impact.

Our board of directors has primary responsibility for overall risk oversight for the company, which includes areas that impact Xylem’s sustainability efforts.  The board has delegated responsibility for direct oversight of the company’s sustainability program to the board’s Nominating and Governance Committee.  The Nominating and Governance Committee regularly receives updates on sustainability from management and provides updates to the full board.

Our senior leadership team members, under the direction of our President and CEO Patrick Decker, lead growth centers, commercial teams and functional areas with the intent of building an enduring and successful company. Increasingly, they are better integrating sustainability into their strategies to accelerate innovation, sell our products and services, and grow our business. Ultimately, our growth strategies are designed to position Xylem as a leader in the global water technology space.

The Xylem Sustainability Steering Committee comprises representatives from multiple geographies, businesses and functions within Xylem who meet monthly to guide and drive our sustainability efforts and monitor progress against our sustainability goals.

Our Environment, Health, Safety & Sustainability (EHS&S) team includes more than 250 full- and part-time employees working at the site level to enact sustainability practices and provide employee training — primarily in the areas of environmental protection and workplace safety.

Our leaders, frontline managers and employees are accountable for safe, ethical, environmentally responsible and forward-looking actions that support our sustainability goals. To support them in this mission, Xylem provides training in the areas of safety, Code of Conduct, continuous improvement — which includes Lean and Six Sigma curriculum — and career and leadership development.

2015 Sustainability Recognition

External recognition provides useful progress markers on our sustainability journey. In 2015, Xylem’s commitment to sustainability and our progress to date was recognized in a number of areas.

In April, Xylem was featured in the Business Roundtable 2015 Sustainability Report as one of 150 companies committed to addressing environmental and energy challenges while driving increased economic growth and job creation.

Xylem was selected to participate in the U.S. Presidential Trade Mission to the People’s Republic of China. From April 12-17, representatives from Xylem and 24 other companies participated in this Smart Cities — Smart Growth Business Development Mission, which included visits with government leaders and potential customers in Beijing, Shanghai and Guangzhou to explore opportunities for introducing or expanding the use of sustainable products and services in China.

In May, Xylem’s Saajhi Stepping Pump was selected as an Edison Awards silver winner. The awards recognize excellence in new product and service development, marketing, human-centered design and innovation. The Saajhi pump uses human weight and motion to move water and was designed to help smallholder farmers in rural areas irrigate their land more efficiently. This innovative yet simple technology earned honors in the Agricultural Enhancements category.

Team Xylem was named one of five finalists in the 18-month-long Wendy Schmidt Ocean Health XPRIZE competition. This global competition challenged competing companies to create affordable pH sensor technology to accurately measure ocean acidification. Based on extensive and rigorous lab and field trials, Team Xylem’s pH sensor was included in the final five solutions that were tested and judged during a week-long ocean challenge in Hawaii.

In July, five Xylem employees were recognized by the Hydraulic Institute, a leading association of pump manufacturers, for helping to develop industry pumping standards, including standards to meet increasingly stringent U.S. Department of Energy pump efficiency regulations.

In September, Xylem earned a place on the Dow Jones Sustainability Index, North America for the fourth consecutive year. The Index tracks the performance of large Canadian and United States companies that “lead the field” in terms of sustainability. Xylem was also included again in the FTSE4Good Index Series, which recognizes companies that have met stringent environmental, social and governance practices.

Xylem Watermark, our corporate citizenship and social investment program, earned the 2015 Corporate Citizenship Award from the U.S. Chamber of Commerce Foundation for the Best Health and Wellness Program. The award, which honors businesses for their significant impacts in communities around the world, recognized our work to provide sustainable access to water, sanitation and hygiene solutions to many of the world’s most vulnerable communities.

In November, Xylem was listed in the NASDAQ OMX CRD Global Sustainability Index. The Index includes companies that are taking a leadership role in sustainability performance by measuring, managing and communicating items such as carbon footprint, energy usage and water consumption.

Xylem earned a 2015 “disclosure score” of 92 from CDP (formerly the Carbon Disclosure Project), an organization that works with the world’s largest corporations to ensure that an effective carbon emissions/reduction strategy is integral to their businesses — and that progress in this area is publicly disclosed. This result represented an improvement of four points over our 2014 disclosure score, and was eight points higher than the CDP climate change program average. We also earned above average disclosure scores in the areas of Governance & Strategy, Risk and Opportunity Management and Emissions Management.