In coordination with ING Bank and Sustainalytics, Xylem developed and secured a revolving loan facility (syndicated across 12 banks) that creates a financial incentive for the company to integrate sustainability and social value across its operations. The facility is expected to finance Xylem’s capital expenditures and investments as needed. The interest rate is index linked to Xylem’s overall environmental, social, and governance (ESG) progress as measured by Sustainalytics. Unlike a green bond, which is static, performance will be measured annually through 2024 and the loan rate will increase or decrease in accordance with changes in that performance.

Project Results

• In 2019 Xylem secured a first in its kind loan facility for 1 billion that is directly tied to its annual sustainability performance metrics This established them as a leader in the space of sustainability tied financing for the industrial sector.
• The sustainability loan structure gained visibility within the company and enhanced the collective ambition to achieve corporate 2025 sustainability goals.
• Presuming that the sustainability goals can be met each year, this structure saves money for Xylem because they benefit from a preferential loan rate.