Savannah, Georgia, one of the communities in which Xylem is investing in financial institutions that serve underserved communities of color
The water technology company Xylem recently announced an initial commitment to invest $5 million in financial institutions that focus on underserved communities of color and rural communities in several states in the South, Midwest and in Hawaiʻi. The investment specifically targets regions and banks that are aligned to Xylem’s organization and customers, such as areas where the company has a large commercial presence, or a large employee base, says the company.
“Historically, communities of color and rural communities in the U.S. have had less access to capital and investment than other communities,” Xylem’s Chief Financial Officer Sandra Rowland told TriplePundit. “These groups often use small, regional financial institutions to access loans, day-to-day banking and other financial activities.”
Xylem typically has a sum of cash on hand that is held in large financial institutions, Rowland explained. By partnering with CNote, the women-led social enterprise platform, she said Xylem can invest a portion of that cash in small, regional banks and credit unions operating in underserved communities.
“CNote streamlines the investment and maximizes impact,” Rowland told 3p. “And each investment allows the institutions to provide loans and other services to support their community.”
The investments are flowing through CNote’s Impact Cash platform, which provides an easy-to-use and measurable tool for streamlining Xylem’s investment with one interface
while maximizing the impact created for underserved communities of across the U.S.
Austin Alexander, Xylem’s vice president of sustainability and social impact, explained to 3p that the company became interested in working with CNote because of the platform’s ability to effectively evaluate each institution in which it is investing.
“It was important to us that every dollar invested was being used in a meaningful way, and CNote’s Impact Cash platform allowed us to do exactly that with confidence and ease,” Alexander said.
Xylem’s initial investments include Bank of Cherokee County (Hulbert, OK), Carver State Bank (Savannah, GA, pictured above), City Federal Credit Union (Amarillo, TX), Hope Federal Credit Union (Jackson, MS), Education Credit Union (Amarillo, TX), Legacy Bank and Trust (Springfield, MO), Self Help Credit Union (FL, NC, SC, VA), Kaua’i Federal Credit Union (Kauaʻi, HI), Optus Bank (Columbia, SC) and Virginia Community Capital Bank (Richmond, VA).
“We are proud to partner with a corporation that has a longstanding, industry-leading position in sustainability and community development,” said Catherine Berman, CEO of CNote, in a public statement. “Now Xylem is extending its leadership by joining the vanguard of companies unleashing their balance sheets to promote racial equity and help communities across the U.S. thrive.”
Rowland said that Xylem discovered CNote, which has deployed more than $100 million to underserved communities across the country, after several months of researching options for using the company’s cash-on-hand investments to support underserved communities.
“Their mission resonated with us, and we were enthusiastic about working with a women-led impact investment platform,” added Rowland. “We were also impressed by their use of technology to increase economic mobility and financial inclusion in underserved communities.”
The investment further advances Xylem’s innovative “green” finance strategy as the company continues to place economic, social and environmental impact at the center of its business operations and functions. In 2019, Xylem announced an $800 million revolving credit facility with a sustainability-linked pricing mechanism, followed by a $1 billion green bond offering in 2020. Most recently in 2021, Xylem added a sustainability-linked cash account tied to its 2025 sustainability goals.
“Our social impact is just as important as environmental impact within our sustainability strategy,” Alexander said. “This investment complements the environmental impact outcomes we have established with other green finance solutions.”
Image credit: Tyler Edic via Unsplash