Modern Slavery Act and Human Trafficking

This statement is made on behalf of Principal Global Investors, LLC pursuant to Section 54 of the Modern Slavery Act 2015 and constitutes our slavery and human trafficking statement for the financial year ended 31 December 2016.

Structural Organization

Principal Global Investors, LLC leads global asset management at Principal Financial Group, Inc.

Our Business

We operate as a multi-boutique business model which comprises a diverse group of specialized investment boutiques.

Our Supply Chain

As an asset management firm, our supply chain predominantly includes the sourcing of services principally from business and professional organizations. 

We therefore believe that there is limited risk of slavery and human trafficking taking place in our supply chains. Notwithstanding this, we are committed to ensuring that modern slavery or human trafficking is not taking place in our supply chain or in any part of our business.

Our Policies on Slavery and Human Trafficking

Our Anti-Slavery and Human Trafficking Policy and Supplier Code of Conduct reflect our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking is not taking place anywhere in our supply chains. 

Due Diligence Processes

As part of our initiative to identify and mitigate risk we have processes in place to:
  • Identify and assess potential risk areas in our supply chains based on high risk countries and sectors. A process exists to assess the risks of suppliers located in countries outside of a “white list”.  That “white list” of acceptable countries is maintained by professional staff from Legal, Tax, Treasury, Global Security and Corporate Risk.  That group also performs risk assessments for any pending engagements with suppliers located in countries outside the white list, and provides a recommendation as to whether the supplier engagement can proceed or not proceed, based on that assessment.
  • Monitor potential risk areas in our supply chains.  In 2017, we will deploy standard due diligence tools and processes to vet existing and new suppliers for negative news, litigation, regulatory enforcement actions and other adverse conduct.  That process will address the vetting of suppliers for any reported incidents of engaging in slavery and human trafficking.

In addition, we have systems in place to encourage our employees to report any concerns as well as policies in relation to whistle blowing. All employees are expected to promptly report suspected unethical, illegal or fraudulent activity by anyone working for or on behalf of Principal Financial Group, Inc.  Employees may report suspected unethical or fraudulent activity by calling the Ethics Hotline or submitting an online report, both of which allow anonymous reporting. These reports are made through a third party not affiliated with Principal Financial Group which collects information, creates a report and sends it promptly to Principal Financial Group for investigation. All reported issues are appropriately investigated and kept confidential, and access to related information is restricted and secured. Our Whistleblower Policy does not allow retaliation for reports made in good faith. 

Supplier Adherence

We have a zero tolerance approach to slavery and human trafficking and we are committed to implementing and enforcing systems and controls to ensure human trafficking is not taking place in our business or our supply chains. We expect our suppliers to share our commitment. Our Supplier Code of Conduct requires that suppliers should not engage in slavery or trafficking of persons and is communicated to third party vendors, suppliers, etc. that we do business with at the time of contract negotiation. We expect our Suppliers to meet the requirements of the Supplier Code of Conduct. Contract provisions have been added for new contracts with third parties who are in a high risk country and/or a high risk sector. 

Our Effectiveness

We use the following key performance indicators to measure how effective we have been to ensure that slavery and human trafficking is not taking place in any part of our business or supply chains:

  • Communication and personal contact with companies in our supply chain and their understanding of, and compliance with our expectations.
  • Monitoring any incidents or allegations across our supply chains which conflict with our Supplier Code of Conduct.

Training

We provide training to employees to ensure a high level of understanding of the risks of modern slavery and human trafficking in our supply chains and our business. A Human Rights topic was added to our Global Code of Business Ethics and Conduct that includes references to Slavery and Human Trafficking. In addition, this topic was highlighted in our annual Code of Business Ethics and Conduct Acknowledgement all employees are required to complete. Corporate negotiators were given more specific training in regard to contract provisions that should be added to higher risk contracts. 

This statement has been approved by the Board of Directors of Principal Global Investors, LLC and will be reviewed annually and updated as required.