2016 Sustainability Report

2016 Sustainability Report

Sustainability Approach

Materiality

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.

2016 Xylem Materiality Matrix

Impact to business

Xylem analysis across (1) Strategic Priorities and (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 and (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

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.

We will continue to collect 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. Over time, we will adjust our materiality matrix to reflect any substantive changes.