Environmental Finance's Sustainable Debt Awards 2024

Sustainability-linked loan of the year - corporate (Americas): Xylem

In 2023, US-based water technology provider Xylem refinanced an existing $1 billion credit facility into a new sustainability-linked mechanism. The original structure, which was linked to its Sustainalytics ESG rating, has now been replaced with specific sustainability targets.

These sustainability targets are:

  • A reduction of absolute Scope 1 and 2 greenhouse emissions;
  • Enabling customers' carbon footprint reduction by 'utilising Xylem products'; and
  • A percentage increase in global supply chain suppliers reporting to Ecovadis or another third-party rating provider.

It said this change was made to better strengthen the level of ambition in its structure and cover a range of metrics that cover its operations, products and supply chain.

Claudia Toussaint, senior vice president, chief people and sustainability officer at Xylem, said sustainability is embedded throughout the business and "this commitment extends to how we approach our financing needs".

"The revolving credit facility builds on a legacy of green financing, anchored in our belief that sustainable business is also smart business for the company, our customers, and our capital markets participants such as lenders and investors".

ING, which was one of the loan's lenders and the sustainability structurer of the deal said: "Xylem is a highly regarded issuer of green and sustainability-labelled debt instruments. They were one of the first corporates to have a sustainability-linked loan in the US back in 2019.

Ana Carolina Oliveira, head of sustainable finance Americas at ING, continued, "fast-forward to today and Xylem remains at the leading edge of sustainability. This award win is a testament to that".

She said: "they continue to raise the bar, resetting their ambition levels and delivering positive impact at the corporate, supplier and customer levels".

The Sustainable Debt Award judges praised the transaction for its comprehensive coverage of its supply chain's impact.

In 2023, volunteers from Xylem, its partners, and customers supported 1,000 nonprofits in 56 countries through the Xylem Watermark programme.