2017 Sustainability Report

Sustainability Approach

CEO MESSAGE

Patrick K. Decker
President and Chief Executive Officer
Xylem Inc.

In rural schools within the Siem Reap and Preah Vihear provinces of Cambodia, children drink untreated water directly from the well, causing waterborne illnesses that impact school attendance and lead to unaffordable medical expenses. They’re part of the more than 60 percent of the world’s population who live in areas of water stress, where water supply cannot or will not be able to meet future demand.

In the aftermath of last year’s devastating hurricanes, thousands of people in Puerto Rico and across the Caribbean struggle to find access to clean, safe water. In Houston, Texas, the city continues to rebound from the devastation caused by massive and deadly flooding. The human and financial toll of such storms is astounding – between 2005 and 2015 alone, damages from natural disasters around the world reached more than $1.3 trillion.

Water issues are intensifying all around the globe – demanding new and bold solutions.

And around the world, broken or outdated water infrastructure is costing communities billions of dollars and countless hours of time that could be redirected to other critical needs such as hunger, healthcare, education and so much more.

Water issues are intensifying all around the globe – demanding new and bold solutions.

At Xylem, we believe that if you can change water, you can change everything. And we know that while the world’s water challenges are growing exponentially, so too are the opportunities to address and overcome them. That’s why we’re focused every day on finding a smarter way forward to solve water by harnessing the power of cutting-edge technologies and innovation.

Sustainability isn’t just an initiative at Xylem; it’s our core business strategy, and it drives our employees to come to work each day with a common purpose and passion – to redefine and advance the world’s water systems and, in doing so, to improve the lives of people around the globe.

A Smarter Way Forward

Advances in technology and in the generation of data are creating extraordinary new possibilities to develop solutions to global water problems that just weren’t feasible a decade ago. Most recently, these advances led to the launch of our Flygt Concertor, the world’s first intelligent wastewater pumping system, and our Godwin NC 150S, the first in a series of smart dewatering pumps. We’re also building an innovative global platform to analyze, draw insights and fuel new approaches that will help drive transformation across the water sector – and help make water safer, more accessible and more affordable for communities worldwide.

Xylem’s technological capabilities took a leap forward with the 2016 acquisition of Sensus, a leader in smart metering, network communications and advanced data analytics. By plugging our vast array of smart products into Sensus’ communication network, we will create a cloud-based, smart water network that enables customers to more easily identify and solve water waste issues through better optimization of Xylem solutions.

In 2018, we formed our Advanced Infrastructure Analytics (AIA) platform, which delivers powerful and unprecedented insights to customers across the water cycle. This platform of capabilities enables customers to increase their return on investment through diagnostic infrastructure assessments that identify and prioritize risks and problem areas. Pure Technologies, acquired in early 2018, serves as the foundation of AIA, providing a unique and disruptive platform of diagnostic, analytics and optimization solutions for water and wastewater networks.

We further developed the AIA business through the acquisition of EmNet and Valor Water Analytics. EmNet’s network modeling and optimization solutions enable municipalities to better manage the urban water cycle to control flow and help prevent polluting of waterways or even buildings. Valor’s core technology is its Hidden Revenue Locator, an automated software designed to locate forms of revenue loss occurring on a utility’s system of meters. The addition of these businesses – each underpinned by our intelligent products – gives us the ability to better predict, analyze and solve water issues, helping to decrease enormous amounts of waste in the management of water around the world, estimated to cost at least $14 billion every year.

Walking the Walk

Beyond the technology solutions we provide to our customers, we are committed to reducing our own environmental footprint through a number of ambitious objectives. Recent progress includes:

  • Nearly doubling the amount of waste diverted from landfill, 41.8 percent at the end of 2017, over the past three years and well ahead of a 20 percent diversion rate goal by 2019, thanks to a robust recycling program.
  • Reducing GHG emissions intensity by nearly 19 percent since 2014, putting us close to our 20 percent goal by 2019. This reduction has been driven in large part by the number of Xylem sites utilizing green electricity.
  • Decreasing water intensity by nearly 17 percent against a 2014 baseline, largely through more water collection and reuse at facilities. The decrease moves us closer to a 25 percent reduction goal by 2019.

We also continued to progress our efforts to ensure a safe environment wherever we operate. We have achieved a nearly 22 percent reduction in injury frequency across the company since 2015. Furthermore, in 2017, more than 200 of our sites operated the entire year without a single recordable injury or a serious near-miss incident.

Advancing thought leadership in the water solutions arena and convening conversations around water transformation are also priorities. As an example, in 2017, we signed the CEO Water Mandate, a UN Global Compact initiative that mobilizes business leaders on water, sanitation and the UN Sustainable Development Goals. And we remain a signatory to the Ten Principles of the UN Global Compact.

Investing in Talent

As we evolve our vision to be the company that leads in smart water innovation, investments in our people are as important as investments in technology. This is why we continue to develop and provide tools, resources and training programs that are critical to helping our people grow and achieve their full potential through all phases of their careers at Xylem.

Our employees are also helping solve water through their work with Xylem Watermark, our signature corporate citizenship initiative. Watermark’s roots are in community development in emerging parts of the world – often through projects with our global, nonprofit partners. In recent years, we’ve expanded Watermark to include projects in more of the locations where we work and live, ensuring a greater number of Xylem employees have the opportunity to participate and give back. In 2017, we logged 35,000-plus hours of volunteer work in water-related activities, including cleaning and restoring local waterways, leading water education programs in local schools, planting vegetation to protect shorelines and building water towers in areas that lack access to clean water.

This work was crucial during the catastrophic string of hurricanes that impacted communities from Texas to Florida to Puerto Rico and across the Caribbean in 2017. Flooding in South Asia also displaced millions in India, Nepal and Bangladesh. Through the Watermark program, we put boots on the ground in many of these locations, helping to rebuild communities.

A Smarter Future

There is so much at stake when it comes to a water secure future. That’s why we’re entering a bold new phase of growth and innovation for Xylem. We are committed to reimagining and transforming the water industry. We’re doing this to help more people and more communities get access to the water they desperately need to live and flourish. And we’re doing it because we have the vision, the technology and capacity for innovation, and the passion to lead change. While the challenges presented by the world’s water crisis are great, so too are the opportunities for our company to make a meaningful and lasting impact. On behalf of my many colleagues at Xylem, we are honored and excited to take up this charge. Thank you for your continued support and interest in our work.

Patrick Decker
President and Chief Executive Officer