5 ways Xylem is integrating green finance
Xylem is adopting and pioneering innovative green finance practices, as part of our commitment to sustainability. These initiatives are designed to further embed economic, social and environmental impact at the center of our business operations and functions. Xylem’s green finance framework advances our long-term sustainability strategyand 2025 sustainability goals, and ties to Xylem’s broader business strategy.
“Xylem’s business is innovating in technologies that deliver more sustainable outcomes for our customers and other stakeholders,” says Xylem’s Chief Financial Officer Sandy Rowland. “Banking products that recognize and reward ESG achievement are a welcome step forward in managing financing and sustainability interdependently.”
Below is a look at some of our key green finance milestones:
CNote partnership
Diversity, equity and inclusion is a critical element of Xylem’s sustainability strategy. In 2022, Xylem announced our commitment to invest $5 million with CNote to benefit mission-driven financial institutions serving black and underserved communities in the U.S. Initial investments, which will be made through CNote’s Impact Cash™ platform, include Bank of Cherokee County (Hulbert, OK), Hope Federal Credit Union (Jackson, MI), Legacy Bank and Trust (Springfield, MO), Self Help Credit Union (FL, NC, SC, VA), among others.
CNote is a women-led social venture and impact platform that uses technology to unlock diversified and proven community investments that increase economic mobility and financial inclusion. The company’s Impact Cash platform provides an easy-to-use and measurable tool for streamlining Xylem’s investment with one interface while maximizing the impact created for underserved communities of color across the U.S. The initiative specifically targets regions and banks that are meaningfully aligned to Xylem’s organization and customers, such as areas with Xylem commercial presence, or a large employee base. Read more here.
Revolving loan fund for decarbonization technologies
Escalating climate threats around the globe underscore the need to mobilize innovation across the water sector. Xylem Innovation Labs, which focuses on identifying and bringing to market the most promising technologies to solve water and climate challenges, is partnering with water consultancy Isle Utilities to tackle one of the major sticking points in our industry’s transformation: the pace of technology adoption. Isle’s revolving loan fund – the “Trial Reservoir” – is an industry-first approach to funding and scaling breakthrough water technologies that focus on decarbonization, with Xylem as a founding sponsor.
Trial Reservoir brings together all the players needed to take new technologies to market – utilities, investors, start-ups, non-profits – clearly defining the path and processes and facilitating funding to expedite adoption. Learn more here.
Goldman Sachs ESG-linked demand deposit account
In 2021, Xylem further integrated sustainability into our financing strategies, launching an ESG-linked demand deposit account with Goldman Sachs, which ties the yield or amount of interest that Xylem earns on our deposits to achievement of our 2025 Sustainability Goals. This means that as we make progress against our sustainability strategies, we stand to earn higher returns on our deposits.
Like our previous green financing initiatives, this work with Goldman Sachs on the deposit account breaks new ground. Read more here.
Green bond
In 2020, we completed a $1 billion green bond offering, the proceeds of which are used to fund green projects that help improve water accessibility, water affordability and water systems resilience, in alignment with Xylem’s Green Finance Framework. Eligible projects include eco-efficient- and/or circular economy-adapted products, production technologies and processes, and solutions that advance sustainable water and wastewater management, including strengthening communities’ resiliency against the impacts of climate change.
Read more about the offering here and find out how Xylem allocated the proceeds of the green bond to projects that improve water-security and advance sustainability here.
Revolving credit facility
In 2019, we announced an $800 million revolving credit facility with a sustainability-linked pricing mechanism, the first of its kind in the US General Industrial Sector. The revolving credit facility ties our borrowing rates to our rating by Sustainalytics, a leading independent global provider of environmental, social and corporate governance (ESG) ratings. Find out more.
What’s next?
Going forward, we’ll continue to explore new and innovative ways to further integrate our sustainability and business strategy, utilizing sustainability-based financing to help drive meaningful environmental and social outcomes.
To learn more about our sustainability journey, see our 2021 Sustainability Report.
