Case study: How Xylem promotes sustainability among its suppliers
Xylem is a leading global water technology company committed to solving critical water and infrastructure challenges with innovation, helping communities in more than 150 countries become water-secure. With over 10,000 suppliers supporting its global procurement and production efforts, Xylem understands that partnering with its suppliers to create transparency and accountability in its supply chain is critical to conducting its business responsibly.
This case study is based on the 2021 Sustainability Report by Xylem, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing
Abstract
Creating and maintaining a sustainable supply chain, collaborating with its supply chain partners on its sustainability journey, is a top priority for Xylem. Tweet This! In order to promote sustainability among its suppliers Xylem took action to:
- implement a Supplier Code of Conduct
- assess suppliers’ sustainability performance
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With this case study you will see:
- Which are the most important impacts (material issues) Xylem has identified;
- How Xylem proceeded with stakeholder engagement, and
- What actions were taken by Xylem to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2021 Sustainability Report Xylem identified a range of material issues, such as social impact solutions, water use reduction and stewardship, environmental impact solutions, watermark and direct community impact. Among these, promoting sustainability among its suppliers stands out as a key material issue for Xylem.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Xylem engages with:
| Stakeholder Group |
| Employees |
| Customers |
| Shareholders |
| Investors |
| Suppliers |
| Partners |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Xylem engaged with its stakeholders through surveys.
What actions were taken by Xylem to promote sustainability among its suppliers?
In its 2021 Sustainability Report Xylem reports that it took the following actions for promoting sustainability among its suppliers:
- Implementing a Supplier Code of Conduct
- Xylem’s standard of excellence in ethics applies to all its suppliers, who are required to strictly adhere to Xylem’s Supplier Code of Conduct. Consistent with Xylem’s procurement processes, all suppliers are required to act in accordance with its business standards, product quality, process capabilities and commitment to sustainability. Additionally, Xylem launched its CDP (formerly the Carbon Disclosure Project) Supply Chain programme in 2021, inviting more than 120 suppliers to calculate and disclose GHG emissions and water usage. Xylem closed the disclosure cycle achieving an 80% response rate, with almost 25% of its supply base by spend disclosing their GHG emissions and/or water usage.
- Assessing suppliers’ sustainability performance
- Since 2020, Xylem has partnered with EcoVadis to assess the performance of its supply base on Labour and Human Rights, Environment, Ethics and Sustainable Procurement. With this programme, Xylem seeks to increase its transparency and help suppliers track and improve their performance year over year. In 2021, Xylem started reviewing scorecards with its suppliers and requested Corrective Action Plans from suppliers with scores below expectations. By the end of 2021, 69% of the suppliers who were re-evaluated had improved their score and 15% remained stable. Additionally, Xylem invested in a new tool to map sustainability risk, by industry and country, for 80% of its supply base by spend.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
This case study is based on published information by Xylem, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.xylem.com/siteassets/sustainability/2021/xylem-sustainability-report-2021.pdf
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