Zurn Elkay Water Solutions: A Climate Leader with Thirst for Growth

Zurn Elkay Water Solutions (NYSE: ZWS) has emerged as a standout player in the sustainability-driven economy, earning recognition as one of USA TODAY’s America’s Climate Leaders 2025. Ranking No. 55 overall among 500 companies, No. 3 in the Capital Goods sector, and No. 1 among Wisconsin-based firms, the company’s ascent reflects a strategic alignment of environmental stewardship with financial resilience. This dual focus positions ZWS as a compelling investment opportunity in a world increasingly demanding green solutions.

The Climate Credentials: A Data-Driven Sustainability Play

ZWS’s ranking hinges on its 33% reduction in greenhouse gas (GHG) emissions intensity between 2021 and 2023, measured relative to revenue. This decline places it among the top performers in an era where Scope 1 and 2 emissions reductions are critical to corporate climate commitments. The achievement is bolstered by its CDP rating—a globally recognized assessment of environmental transparency—and its broader environmental record, which includes saving 8 billion gallons of water and preventing 4.7 billion single-use plastic bottles in just the first quarter of 2025.

The company’s CEO, Todd A. Adams, emphasizes a dual mandate: internal decarbonization and enabling customer sustainability goals. This approach is reflected in its product portfolio, where 86% of revenue stems from offerings with explicit sustainable attributes, such as water-efficient fixtures and refill stations that replace single-use plastics. Such focus aligns with a global shift toward water conservation, driven by regulatory mandates and corporate net-zero targets.

Financial Fortitude Amid Climate Transition

While environmental achievements are laudable, investors prioritize profitability. ZWS delivers here too. In Q1 2025, the company reported 5% core sales growth alongside margin expansion, a testament to its ability to monetize sustainability-driven demand. Management also highlighted proactive supply chain adjustments—such as relocating manufacturing closer to key markets—to mitigate tariff risks, ensuring cost stability in an era of trade volatility.

The company’s accolades—Newsweek’s America’s Most Responsible Companies 2021–2025 and TIME’s World’s Best Companies for Sustainable Growth 2025—underscore its sustained credibility. These awards act as a seal of approval for institutional investors increasingly incorporating ESG (Environmental, Social, Governance) criteria into their decision-making.

The Market Tailwind: A $1 Trillion Opportunity in Water Solutions

ZWS operates within a sector primed for growth. The global water management market is projected to exceed $1.2 trillion by 2030, fueled by urbanization, climate change, and regulatory pressures. In the U.S. alone, aging infrastructure and drought-prone regions like the West are accelerating demand for efficient water systems. ZWS’s focus on water conservation and plastic reduction directly addresses these challenges, positioning it to capture a significant slice of this expanding market.

Risks and Considerations

No investment is without risks. ZWS faces competition from larger industrial conglomerates and emerging startups in the water-tech space. Additionally, the pace of regulatory adoption and corporate net-zero timelines could influence demand variability. However, ZWS’s sector-leading 33% emissions reduction and product differentiation provide a durable moat.

Conclusion: A Well-Spring of Value

Zurn Elkay Water Solutions stands at the intersection of environmental necessity and economic opportunity. Its 33% emissions intensity reduction, 8 billion gallons of water saved annually, and 5% revenue growth in a challenging macroeconomic environment collectively paint a compelling picture. With 86% of its revenue tied to sustainable products and a track record of mitigating operational risks, ZWS is not merely adapting to climate change—it is capitalizing on it.

For investors, the company’s $X billion market cap (as of Q1 2025) and its leadership in a $1.2 trillion addressable market suggest significant upside potential. As governments and corporations worldwide intensify their climate pledges, ZWS’s role as a “Climate Leader” is likely to translate into sustained growth—a rare combination of purpose and profit in an era demanding both.

In a world parched for solutions, ZWS is the liquid asset investors need.