Greetings from Our President & CEO

We are proud to present you with our 2019–2020 Sustainability Report. Today’s stakeholders expect corporations to provide leadership on environmental, social and governance (ESG) principles and make a positive impact. At American Water, we pursue our ESG goals because we believe it is the right thing to do.

For us, delivering a reliable supply of safe, clean and affordable water service to our customers and treating their wastewater is fundamental to our business. We are also committed to limiting our impact on the environment and supporting the sustainability of a key renewable resource to strengthen the communities we serve.

We know that supporting an ESG agenda is critical to the long-term success of our company. That is why our leadership in ESG is so meaningful. When we reduce safety incidents, sustain and modernize our infrastructure, provide an excellent customer experience and strive to make American Water a place where everyone’s differences are celebrated, we are living our ESG philosophy.

ESG is yet another powerful approach for us to assess our performance. When we focus on long term sustainability, our communities thrive, our customer base grows and customer experience and customer satisfaction continues to improve. When we invest in our infrastructure and increase water efficiency through leak detection and efficient water use, we pump less water, reduce our energy costs and greenhouse gas emissions (GHG) and provide a greater return for our investors.

We recognize that our approach to ESG continues to evolve and there are always improvements to be made. In February 2021, we refined our GHG emissions goal and set new targets for climate variability/water supply resilience and water use and efficiency, including:

  • By 2025, reduce absolute scope 1 and scope 2 GHG emissions by more than 40% from a 2007 baseline;
  • By 2030, increase water system resiliency to respond to more extreme events by increasing our Utility Resilience Index (URI) weighted average by 10% from a 2020 baseline; and
  • By 2035, continue to meet customer needs while saving 15% in water delivered per customer compared to a 2015 baseline.

We also updated our Code of Ethics in December 2020 and established a Supplier Code of Conduct, requiring our suppliers to operate in accordance with our business ethics and approach to environmental stewardship.

It is because of this ongoing commitment to integrating ESG principles throughout our business that American Water continues to be recognized for our leadership.In 2020, we received the highest S&P Global Ratings ESG Evaluation score given to a U.S. company and the second highest globally. For the third year in a row, Barron’s named us to its list of the 100 Most Sustainable Companies as the highest ranked utility, coming in at 22nd for 2020 and we achieved a ranking of 16th on the Corporate Knights’ Global 100 Most Sustainable Corporations in the World index. In 2021, we moved up in our rankings from Barron’s and Corporate Knights to 15th and 9th, respectively, recognized as the highest ranked U.S. water utility in the world. As we reflect on our progress in 2019 and 2020, we are appreciative for the recognition provided by these rankings and remain focused on improvement. Thank you for your interest in our company.

Walter Lynch

President and Chief Executive Officer