Our client-first focus is central to integrating environmental, social, and governance (ESG) factors across our investment boutiques and asset classes. Our main goal with ESG is empowering our clients with choice and confidence. We use a flexible approach to ESG to recognize that there is no single one-size-fits-all approach to something as individual as views on environmental, social, and governance issues. A sovereign wealth fund in Asia will take a different approach to ESG than a pension fund in The Netherlands would take. Because of this, we want to collaborate with our clients on ESG in a personal, customized way to achieve the dual outcome of safeguarding assets and protecting the future. Knowing this, and knowing everyone can do their part, we want to work closely with our clients to help determine what type of engagement best supports their values and goals.
Our flexible approach recognizes that the ESG landscape is evolving. We eschew a rigid definition of and approach to ESG. A broader conception of ESG allows us to offer our clients those options that follow a repeatable investment process while conveying their values and achieving their financial goals. It also keeps open opportunities for new pathways in the future.
Our firm-wide ESG working group helps coordinate ESG efforts across Principal. This group also engages with our investment boutiques to help them determine how to leverage current ESG best practices.
As a signatory to the Principles for Responsible Investing (PRI) since 2010, we understand that ESG factors play a material role in determining risk and return, and should be considered as part of our duty to clients and our fundamental investment process. We value the voice that being a PRI signatory provides in defining and shaping the ESG discussion, the development of best practices, and ultimately the potential to enhance the outcomes for our clients, and for those who depend on them.
With an ongoing focus on ESG research and education, our investment boutiques gather valuable insights that are crucial to the evaluation of sustainable competitive advantages. In addition, we use recognized third-party proxy-research providers. This research, taken together with our analysts’ fundamental company analysis and the additional perspective of our portfolio managers, provides for informed decision making in navigating proxy issues.
With a strong focus on being good stewards of our resources and those of our clients, our investment teams work to integrate ESG factors across all asset classes. Our multi-boutique approach allows each investment boutique to determine how to integrate ESG factors into their investment processes, based on the needs of their clients. This provides a broad spectrum of integration options.
Helping clients incorporate ESG issues into their portfolios is only part of the story. We also try to live to a high standard of environmental, social, and governance principles. Principal Global Investors and our parent firm, Principal, have established a Corporate Environmental Policy covering the firm’s environmental focus in several areas:
- carbon footprint
- water efficiency
- waste and recycling
- environmental preferable purchasing
- employee awareness
For more detailed information on ESG at Principal Global Investors, please download ESG: A path to fulfilling fiduciary duty
For information on our ESG recognition, please download Responsible Investing and ESG
We value the voice that being a PRI signatory provides in defining and shaping the ESG discussion, the development of best practices, and ultimately the potential to enhance the outcomes for our clients, and for those who depend on them. Our Responsible Investment Policy lays out our approach to ESG Integration.