Xylem Inc.

As a leading global water solutions company, we empower customers and communities to build a more water-secure world by addressing some of the most urgent sustainability challenges - responsible stewardship of our shared water resources and resiliency of communities to climate change. We build strong partnerships committed to sustainability across our entire value chain. Engaging suppliers, colleagues, customers, and other partners in practices that support a healthy business ecosystem is key to driving positive change across the industry.

Three strategic pillars – Decarbonize the Water Sector, Accelerate Corporate Water Stewardship, and Advance Water, Sanitation and Hygiene (WASH) Access - guide our actions for creating the highest impact towards our commitment to water security. They address the greatest challenges our stakeholders face and highlight where Xylem and our solutions play a unique role in creating lasting, positive impact. Our sustainability strategy and an update on our progress towards achieving our goals are outlined in our annual Sustainability Report.

Sustainability Governance

Robust governance structures are critical to supporting the effectiveness and credibility of our sustainability programs, commitments, goals, and reporting. From our Board to our teams operationalizing sustainability across our businesses, we seek to maintain a governance structure that provides strong oversight with responsiveness to operational needs.​ Strong governance over the Company’s approach to sustainability starts with our Board with the assistance of its committees. Our CEO, Chief People and Sustainability Officer, and members of the senior leadership team lead execution of our sustainability strategy and drive progress toward our strategically aligned goals.

Sustainability-Linked Financing

Over the past decade, we have continued to align positive environmental and social impacts with strong economic outcomes, reinforcing our commitment to placing sustainability at the core of everything we do. In recent years, we further advanced our sustainable financing initiatives and the key performance indicators that support them. Examples of key initiatives include:

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Launched a five-year revolving credit facility in 2023 featuring pricing adjustments based on Xylem's achievement of specific sustainability targets, alongside its credit rating.

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Established a demand deposit account with yields on deposits linked to the achievement of our 2025 Sustainability Goals.

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Completed a $1B green bond offering, with proceeds allocated to projects to improve water accessibility, affordability, and resiliency.

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Transitioned supply chain finance agreements to sustainable frameworks, providing incentives for participating suppliers to initiate and improve their EcoVadis (or equivalent) scores.

We remain committed to advancing our sustainability-focused financing strategy and aligning our capital deployment with our mission to drive meaningful environmental and social outcomes.

Sustainability-Linked Compensation

A portion of the individual component of the 2024 Annual Incentive Compensation for our Chief Executive Officer and senior leadership team was tied to progress on several Sustainability Goals, including: improving Xylem’s women in leadership representation through merit-based hiring, promotions and pools of candidates from a range of backgrounds and demographics for all professional positions to attract and retain the most qualified talent; improving our injury frequency rate; achieving 100% process water recycling at our major facilities; and enabling customers to reduce their water demand. Also, further underscoring Xylem’s continued commitment to sustainability, the Company's 2021 special, one-time performance share units granted to all NEOs, as well as a broader group of senior executives, use goals to be achieved over a 5-year performance period that are based on five of our 2025 Sustainability Goals.

Sustainability Impact

Our sustainability initiatives are designed to create long-term value for all stakeholders and contribute to a more water-secure world. Ultimately, we strive to enable sustainability across our entire value chain, so that that every aspect of our operations aligns with our commitment to a sustainable future.

We have a comprehensive slate of 2025 Sustainability Goals and, in 2024, we announced several new ambitious 2030 Goals. In 2021, Xylem committed to setting science-based targets aligned to a 1.5ºC reduction scenario, in line with the Paris Agreement, by 2030 and net-zero greenhouse gas emissions (Scope 1, 2 and 3) by 2050. Following the acquisition of Evoqua, we resubmitted our 2030 science-based targets to the Science Based Target initiative (SBTi), based on an updated 2023 baseline for the combined company. In December 2024, our 2030 science-based targets were validated and approved by SBTi.

Each year, we assess and monitor the risks and opportunities related to the impact of climate change on our business. In 2024, we performed an updated climate scenario analysis under the Task Force on Climate-related Financial Disclosures framework. Additional details can be found in our Climate Action Plan on our website.

In setting our sustainability strategy and goals, we are aligned with the United Nations Sustainable Development Goals ("SDGs"), not only to substantiate our contribution to achieving global objectives, but also to be transparent in our communication to stakeholders by providing details on our objective to build a sustainable future. While Xylem embraces all 17 of the SDGs, we have a special focus on SDG6: Clean Water and Sanitation.

To further enhance our understanding and management of risks and opportunities related to sustainability, we are also committed to continuous progress aligned with the core principles of the United Nations Global Compact, CEO Water Mandate, Race to Zero, Women’s Empowerment Principles, and the Human Rights Campaign Foundation’s Global Business Coalition, among others.

Xylem’s ongoing commitment to sustainability and the results we have achieved have led to our inclusion on several of the world’s most prestigious sustainability equity indexes. In 2024, Xylem continued to benefit from external assessment of our sustainability program through a number of indices to inform on areas for our continued focus.

As a signatory to a number of sustainability-related compacts, pledges and mandates, Xylem is committed to continuous progress as this helps us better understand and manage our own opportunities and risks in the environmental and social domains with a focus on long-term value creation. Additional details can be found in our annual Sustainability Report and on our website atwww.xylem.com.

Corporate Social Responsibility

Xylem Watermark, our corporate social responsibility program, has a mission to provide education and access to safe water to enable healthy lives, help build resilient communities and inspire and attract the next generation of leaders. Watermark continues to expand its humanitarian disaster response, youth empowerment and skills-based volunteering. We are proud of the program’s expanded strategy to engage a larger ecosystem of stakeholders, as well as the fact that in 2024, ~79% of Xylem colleagues volunteered over 220,000 hours. This employee-led volunteerism and broad engagement enhances the Company’s commitment to employee retention, recruiting, and collaboration in the communities in which we live and work.

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