Climate change is expected to have a significant impact on water supply and quality globally. Altered precipitation patterns, increases in runoff, and rise in sea levels will challenge the availability of clean water for communities and industries across the world. Moreover, transporting, treating and using both clean water and wastewater generate significant greenhouse gas emissions. In this context, Xylem Inc., a leading global water technology company, is in a unique position to improve the productivity of the water sector and “build resilience to water-related challenges associated with climate change.”
Xylem, headquartered in Rye Brook, New York, was formed in 2011 after being spun-off from ITT Corporation, and has established itself as a leading developer of water technology. The company has a physical presence in over 150 locations across the world, and in 2015 had revenues of US$ 3.7 billion and approximately 12,500 employees. Its technology solutions are designed to span the entire water cycle: water productivity solutions to help customers acquire and use water more economically, water quality solutions to help customers manage and renew wastewater in an affordable and environmentally responsible fashion, and water resilience solutions to help customers manage and reduce water-related risks, including floods and draughts. The company markets and sells its products in the United States, Europe, the Asia Pacific, and internationally.
Having identified the inherent linkages between climate change, water, and sustainability, Xylem has successfully made sustainability a deliberate priority. Nowhere is this more apparent than in its mission statement – “Let’s save water.” In demonstrating its commitment to advancing sustainable solutions in the water sector, Xylem has set ambitious operational goals for itself.
The company’s sustainability strategy is intertwined with its business strategy, and its sustainability goals are incorporated into its business planning process. The company has taken a four-pronged approach to climate change risk mitigation: products, operations, employees, and stakeholder engagement.
- Products: The company is focused on driving energy efficiency across its product lines. In 2015, the company replaced nine legacy pumps in its Applied Water Systems division with newer, more efficient models. Separately, the company continues to introduce new products that will enhance energy efficiency for its customers – In 2015, Xylem’s pumps and mixers that were installed in an Italian wastewater treatment plant reduced energy consumption by 65 per cent. In the United States, the company provided the technology to recycle 85 per cent of all water used in the 68,500-seat Levi Stadium in Santa Clara, California
- Operations: The company has committed to, in its own operations, reducing water use by 25 per cent, greenhouse gas emission intensity by 20 per cent, and waste to landfill rates by 20%
- Employees: The company has instituted a corporate citizenship program called Xylem Watermark, through which it aims to increase employee involvement in sustainability initiatives by 15% year over year. In 2015, through the program, the company’s employees provided contributions towards ensuring adequate water supply for more than 90,000 Syrian refugees
- External stakeholder engagement: The company actively engages with external stakeholders to drive its sustainability agenda, and is a founder member of the Value of Water Coalition, which brings together leading industry players to increase awareness about water scarcity and conservation
Can other companies emulate Xylem’s successful sustainability practices? Ultimately, there are a few key factors that have made Xylem’s climate change policies successful.
- Alignment with core products: Xylem operates in an industry with a high degree of technology obsolescence risk; the company has come out ahead of this with a publicly stated focus on innovation oriented towards mitigating climate change. Other companies may also choose to seek out creative ways to incorporate sustainability into their core value proposition
- Commitment to people and organization culture: The company has built a culture where sustainability is not an afterthought but a business priority. Its leaders, frontline managers and employees are held accountable for safe, ethical, environmentally responsible and forward-looking actions that support the company’s sustainability goals. This is in my view the most easily replicable, but arguably the hardest to get right, of Xylem’s sustainability practices
- Conscious oversight, monitoring, and reporting: Not only has the company set out its sustainability goals, it does so annually and publicly. It has created a Sustainability Steering Committee which includes representatives from multiple geographies, businesses, and functions within Xylem to specifically drive sustainability efforts and monitor the company’s progress. Other companies can choose to adopt this approach as a means to create external and internal accountability for their sustainability goals
Overall, I believe that Xylem has differentiated itself in approaching sustainability as an integral part of its business strategy. Going forward, the company should continue to maintain its leadership as a sustainability champion by seek outing partnerships with organizations across its supply chain to align and amplify its sustainability priorities.
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