2017 Sustainability Report

Sustainability Approach

Materiality & REPORTING

In creating this report, our goal is to address sustainability issues that have the most significant and material impact on our company’s business performance and are important to our stakeholders — in particular, our customers, employees, shareholders, local communities and the broader society in which we operate.

While there are many important issues outlined by the Global Reporting Initiative (GRI), we believe that providing greater insight and transparency about the issues that are most relevant to Xylem’s business and the impact we have on the world — through relevant stories, leadership messages and videos — will enhance our stakeholders’ understanding of our business, our commitments and our progress.

In order to identify those significant issues, we collected and assessed data and other input from a variety of internal and external sources. Our internal stakeholders included key senior business and functional leaders, the Xylem Sustainability Steering Committee and our Environment, Health, Safety & Sustainability (EHS&S) team. We also relied on input from a cross section of external stakeholders, including the investment community, NGOs, customers and partners, and community leaders. We then evaluated GRI’s G4 indicators through three different lenses — the collective stakeholder feedback, Xylem’s strategic priorities and our enterprise risk management factors — to determine both their relative impact on our business and importance to stakeholders.

This robust analysis produced 17 material issues that we have organized into five categories: Strategic Business Model, External Engagement, Environmental Stewardship, Our People and Governance.

Consistent with our commitment to continue collecting input from internal and external stakeholders about these issues, their potential impact on Xylem’s business now and in the future, and their relative importance to our business and stakeholders, we initiated a comprehensive review of our sustainability strategy in the first quarter of 2018. This comprehensive review includes outreach to multiple stakeholders to inform an updated materiality matrix and the formation of new, long-term sustainability goals that will be announced in 2018.

2017 Xylem Materiality Matrix
Impact to business
Xylem analysis across
(1) Strategic Priorities
(2) Enterprise Risk Management (ERM) Priorities
Importance to stakeholders
Xylem analysis across five key stakeholder groups
(1) Customers and End Users
(2) Employees
(3) Shareholders
(4) Suppliers
(5) Local Communities
Strategic Business Model
  1. Economic Value Creation
  2. Innovation
  3. Sustainable Products & Services
  4. Community Impact
External Engagement
  1. Water Thought Leadership
  2. Global & Local Citizenship
Environmental Stewardship
  1. Product Materials
  2. Energy Efficiency of Our Facilities
  3. Climate Change Mitigation
  4. Water Stewardship
  5. Biodiversity
  6. Packaging & Waste
Our People
  1. EHS&S at Xylem
  2. Talent Development
  3. Global Workforce
Governance
  1. Integrity & Transparency
  2. Responsible Supply Chain