Xylem Releases 2025 Sustainability Report

Xylem publishes detailed sustainability performance data for 2025

Xylem Inc., the American water technology company listed on the New York Stock Exchange, has published its 2025 Sustainability Report. The document provides data on the company’s environmental performance and sets out climate targets aligned with the Paris Agreement. For UK businesses tracking corporate sustainability standards, the report offers insight into how large infrastructure companies are responding to investor pressure for transparent ESG reporting.

The timing is notable. Xylem has voluntarily adopted elements of the Corporate Sustainability Reporting Directive (CSRD) framework ahead of legal requirements. This approach reflects growing expectations around environmental disclosure, particularly for companies operating in European markets or serving public sector clients.

The report covers emissions reduction pathways, renewable energy deployment, and operational changes across Xylem’s global facilities. It also includes recognition from several international sustainability assessment bodies. Consequently, the document serves as both a performance statement and a signal of strategic direction for a company that supplies water infrastructure to utilities, industrial sites, and commercial buildings.

For businesses evaluating sustainability credentials in their supply chains, reports like this provide comparable data points. They also indicate how established companies are structuring their response to climate risk and regulatory change.

Science-based targets approved by the SBTi

Xylem has secured approval from the Science Based Targets initiative (SBTi) for its emissions reduction plan. The targets are designed to align with limiting global temperature rise to 1.5 degrees Celsius above pre-industrial levels. This represents the more ambitious end of the Paris Agreement range.

By 2030, Xylem commits to reducing absolute Scope 1 and 2 emissions by 42 per cent from a 2023 baseline. Scope 1 covers direct emissions from owned or controlled sources such as company vehicles and on-site fuel combustion. Scope 2 covers indirect emissions from purchased electricity, heat, and steam.

In addition, the company aims to cut Scope 3 economic intensity by 52 per cent over the same period. Scope 3 emissions occur in the value chain, including upstream supplier emissions and downstream product use. Economic intensity means emissions per unit of revenue, allowing for business growth while reducing carbon impact.

Xylem’s long-term goal is net-zero greenhouse gas emissions across all scopes by 2050. This includes Scope 3, which typically accounts for the largest portion of a company’s carbon footprint and is the hardest to control. The commitment covers the entire value chain, from raw material extraction through to end-of-life product disposal.

The report was published in May 2026, providing 2025 performance data. Therefore, businesses can assess progress against these stated baselines when comparing suppliers or evaluating sector benchmarks.

Third-party recognition and disclosure standards

Xylem received an A rating from the Carbon Disclosure Project (CDP) for climate change performance in the 2025 assessment cycle. The CDP operates one of the most widely used corporate environmental disclosure systems, collecting data from thousands of companies worldwide. An A rating places a company in the leadership category, indicating comprehensive measurement, verification, and management of climate risks.

The company also appeared on TIME’s list of the 10 Most Influential Sustainability Companies in 2026. Additionally, it ranked 41st in Corporate Knights’ Global 100 Most Sustainable Corporations for 2026. These rankings use different methodologies but generally assess environmental performance, social impact, and governance quality.

For UK businesses, such recognition can be relevant when responding to tender requirements that include sustainability criteria. Many public sector contracts now require suppliers to demonstrate carbon management systems and credible reduction targets. Furthermore, some private sector clients use third-party ratings as screening tools in procurement processes.

Xylem has also begun voluntary alignment with the CSRD ahead of mandatory compliance dates. The directive will require thousands of companies operating in the EU to report sustainability data to standardized specifications. Early adoption signals preparation for stricter disclosure regimes and may reduce compliance costs when legal requirements take effect.

Operational changes to reduce emissions

The sustainability report outlines specific operational changes Xylem plans to implement by 2030. These provide examples of how large companies are translating climate commitments into facility-level decisions.

Fleet decarbonization forms a central component. Xylem operates vehicles for service, maintenance, and installation work at customer sites. The company intends to transition to electric and hybrid vehicles where operationally feasible. However, the report acknowledges some fleet requirements may need alternative fuel sources rather than full electrification.

Renewable energy deployment is expanding across facilities. Xylem is installing solar generation at multiple sites and increasing procurement of renewable electricity beyond standard Renewable Energy Certificates. The report specifically mentions legacy Evoqua facilities following Xylem’s acquisition of Evoqua Water Technologies. Integrating sustainability standards across merged operations often presents challenges, particularly when facilities have different energy sources or reporting systems.

Supply chain optimization aims to reduce downstream Scope 3 intensity. This involves working with customers to minimize emissions associated with product use and disposal. For a water technology company, this might include more energy-efficient pumps, reduced chemical use in treatment processes, or equipment designed for longer service life.

Xylem also highlights its focus on non-revenue water reduction. This measures water saved through improved infrastructure and management solutions that prevent leaks and inefficiencies in distribution networks. For water utilities, non-revenue water represents both financial loss and wasted energy used in treatment and pumping.

What this means for UK businesses and public sector buyers

• Large suppliers are increasingly publishing detailed emissions data covering their full value chain, not just direct operations.
• Science-based targets approved by the SBTi are becoming a standard benchmark in corporate climate commitments, particularly for companies serving public sector clients.
• Voluntary CSRD alignment indicates preparation for stricter EU sustainability reporting requirements that will affect UK companies trading in European markets.
• Fleet electrification and renewable energy procurement are now standard elements of corporate decarbonization plans, affecting logistics and facilities management decisions.
• Scope 3 emissions reduction requires supply chain engagement, meaning suppliers may request carbon data or product specifications from their own suppliers, including UK SMEs.
• Third-party ratings such as CDP scores are being used as procurement screening tools, particularly in water sector contracts and public frameworks.

Investor interest in sustainability performance

Xylem held an investor conference call on 28 April 2026 to discuss findings from the sustainability report. The decision to brief financial analysts on environmental performance indicates investor interest in climate risk and transition planning. This reflects broader market trends where ESG factors influence company valuations and access to capital.

For UK businesses, this signals that sustainability reporting is no longer purely reputational. Financial institutions, insurance providers, and equity investors are incorporating climate risk into lending decisions and portfolio management. Companies without credible emissions data or reduction plans may face higher capital costs or exclusion from certain investment funds.

Moreover, regulatory changes are accelerating this shift. The UK’s Sustainability Disclosure Requirements will mandate climate-related financial disclosures for many companies. Similarly, the EU Taxonomy regulation and CSRD create detailed reporting obligations for businesses operating in European markets. Therefore, companies that delay building measurement and reporting systems may find themselves at a competitive disadvantage.

Xylem’s approach also demonstrates how sustainability strategy is being integrated with business operations rather than treated as a separate corporate responsibility function. The report links emissions reduction to facility management, vehicle procurement, energy contracts, and supply chain relationships. This integration reflects the reality that meaningful carbon reductions require operational changes, not just offset purchases or aspirational statements.

Considerations for UK SMEs in water and infrastructure supply chains

UK businesses that supply components, services, or materials to large infrastructure companies should expect increased scrutiny of their carbon footprint. As companies like Xylem pursue Scope 3 reductions, they will engage suppliers to obtain emissions data and identify reduction opportunities. This creates both compliance pressure and potential competitive advantages.

Businesses that can provide product carbon footprints, demonstrate energy efficiency, or show credible reduction plans may differentiate themselves in tender processes. Conversely, those unable to supply emissions data may be excluded from frameworks or face pressure to implement measurement systems. For example, a component manufacturer supplying pump assemblies might be asked to calculate the embodied carbon in its products or demonstrate renewable energy use at production facilities.

The water sector specifically is under regulatory pressure to reduce emissions. Water companies in England and Wales face requirements to report and reduce operational carbon under Environment Agency guidance. Consequently, their suppliers will experience downstream pressure to contribute to these targets. This affects equipment manufacturers, chemical suppliers, construction firms, and service providers.

Furthermore, public sector procurement frameworks increasingly include sustainability criteria with measurable thresholds. The Procurement Policy Note on carbon reduction plans (PPN 06/21) requires suppliers bidding for major government contracts to publish emissions data and reduction commitments. While this currently applies to contracts above £5 million per year, the threshold may lower, and similar requirements are spreading to local authorities and public bodies.

Businesses should also consider the operational changes Xylem describes. Fleet electrification, renewable energy procurement, and supply chain engagement are becoming standard practice among large companies. SMEs adopting similar approaches early may find it easier to meet customer requirements and benefit from lower running costs over time. However, these changes require capital investment and operational adjustment, so early planning helps manage costs and maintain competitiveness.

Where to find further information

The full Xylem 2025 Sustainability Report and Climate Action Plan are available on the company’s investor relations website. These documents provide detailed methodology, baseline data, and performance metrics for businesses seeking comparable benchmarks.

The Science Based Targets initiative website offers guidance on setting emissions reduction targets aligned with climate science. UK businesses considering SBTi approval can access sector-specific resources and calculation tools at sciencebasedtargets.org.

The UK government’s guidance on measuring and reporting greenhouse gas emissions is available at gov.uk. This includes conversion factors for calculating emissions from energy use, transport, and other business activities.

Information on the EU Corporate Sustainability Reporting Directive and its implications for UK businesses trading in European markets can be found through the Financial Reporting Council and relevant professional bodies. Additionally, the Environment Agency provides sector-specific guidance for water industry emissions reporting and reduction planning.

For businesses seeking support with carbon measurement, science-based target setting, or compliance with procurement requirements such as PPN 06/21, professional advice can help navigate the increasingly complex landscape of corporate sustainability reporting.