The consideration of ESG factors can be integrated into our sustainable investing approach across all actively managed asset classes. The integration approach is determined by the specific investment process of the investment teams within the underlying asset class.

Our Sustainable Investing Oversight Committee has worked with each investment team to categorize alignment with our internal sustainable investing continuum. This continuum outlines our various approaches to sustainable investing to help assure clients can make informed investment decisions. The classifications are as follows: ESG Integration Foundational, ESG Integration Enhanced Features, Thematic, and Impact.

As a global asset manager, we’ve focused on converting and launching new funds for clients whom sustainability is a key consideration and to comply with greater expectations of sustainability standards from regulators.

Stewardship and engagement activities have always been essential to our role as investors. We believe by encouraging corporations to improve long-term stewardship of human, natural, and financial resources, we can play an active role in helping deliver better outcomes for our clients.

Stewardship and engagement policy statement (PDF)

Proxy voting policies and procedures (PDF)

Principal issued our first sustainability bond in August 2021 as part of our commitment to integrating and advancing ESG practices and initiatives.

The bond, issued in the amount of $600 million, financed eligible social and environmental assets such as affordable housing, green buildings, energy efficiency, and renewable energy. Annually we release our Sustainable Financing Report (PDF). Its disclosures include the amount of proceeds allocated to each eligible category, environmental and social performance indicators, and the balance of unallocated proceeds.

To govern the process for this sustainability bond and future issues of green, social, and sustainability bonds, Principal created the Principal Sustainable Financing Framework (the Framework). According to the Framework, eligible assets may include existing or future investments that meet defined criteria to help advance the United Nations Sustainable Development Goals (U.N. SDGs). A business is only eligible if 90% or more of its revenue is derived from activities and criteria that align with U.N. SDGs. Principal obtained an independent Second-Party Opinion on its Sustainable Financing Framework. For more detail, see the Second-Party Opinion from Sustainalytics.