06 Apr 2018

Principal Global REITs Responsible Investment and Engagement Policy Statement

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Principal Global Investors has been a signatory to the United Nations Principles for Responsible Investment (UN PRI) since 2010, highlighting the firm’s dedication to Environmental, Social and Governance (ESG) issues. UN PRI works to achieve a sustainable global financial system by encouraging the adoption of six principles and collaboration on their implementation; by fostering good governance, integrity, and accountability; and by addressing obstacles to a sustainable financial system that lie within market practices, structures, and regulation.

Principal Global REITs believes that incorporating ESG factors into our investment process results in a more holistic approach to investment decision-making. ESG factors are one of many investment factors that our team of investment professionals consider when assessing a company.

By engaging with companies that we invest in, we encourage greater awareness of ESG issues, and potentially maximise shareholder value and long-term returns.

We use UN PRI’s six Principles as a framework:

  • We incorporate ESG issues into investment analysis and decision-making processes. ESG factors are one of the investment factors that our investment professionals consider as part of our investment process and which influence our investment decision-making. ESG factors are incorporated into our company research reports, whereby companies with superior ESG ratings are viewed more favourably.

  • We are active owners and incorporate ESG issues into our ownership policies and practices. We exercise active ownership by not investing in companies with poor ESG practices that we deem to have a material impact on shareholder value. Activism is not a central tenet of our investment process, but we will engage with companies to discuss ESG issues with the objective of improvement where appropriate. When exercising voting rights, we will vote in a manner that maximises shareholder value, while taking into account ESG factors.

  • We seek appropriate disclosure on ESG issues by the entities in which we invest. We encourage greater transparency in ESG reporting and support the integration of ESG reporting into standard financial reporting. We support shareholder initiatives and resolutions that promote ESG disclosure.

  • We promote acceptance and implementation of the Principles within the investment industry. We support regulatory or policy developments that enable implementation of the Principles.

  • We work together to enhance our effectiveness in implementing the Principles. We support the use of investor reporting as a source of learning and are open to addressing any emerging ESG issues. We support appropriate collaborative initiatives that enhance the effective implementation of the Principles.

  • We report on our activities and progress towards implementing the Principles. We will communicate with clients about ESG issues when requested, and we will complete ESG questionnaire requests from clients to promote the disclosure of our ESG practices.

Disclosure

Unless otherwise noted, the information in this document has been derived from sources believed to be accurate as of March 2018. Information derived from sources other than Principal Global Investors or its affiliates is believed to be reliable; however, we do not independently verify or guarantee its accuracy or validity. Past performance is not necessarily indicative or a guarantee of future performance and should not be relied upon as a significant basis for an investment decision. Investing involves risk, and investors must be prepared to bear capital losses which might result from investments. The potential for profit is accompanied by the possibility of loss.

The information in this document contains general information only on investment matters. It does not take account of any investor’s investment objectives, particular needs or financial situation and should not be construed as specific investment advice, an opinion or recommendation or be relied on in any way as a guarantee, promise, forecast or guarantee of future events regarding a particular investment or the markets in general. All expressions of opinion and predictions in this document are subject to change without notice. Any reference to a specific investment or security does not constitute a recommendation to buy, sell, or hold such investment or security, nor an indication that Principal Global Investors or its affiliates has recommended a specific security for any client account.

Subject to any contrary provisions of applicable law, Principal Financial Group, Inc., Its affiliates, and its officers, directors, employees, agents, disclaim any express or implied warranty of reliability or accuracy (including by reason of negligence) arising out of any for error or omission in this document or in the information or data provided in this document.

Any representations, example, or data not specifically attributed to a third party herein, has been calculated by, and can be attributed to Principal Global Investors. Principal Global Investors disclaims any and all express or implied warranties of reliability or accuracy arising out of any for error or omission attributable to any third-party representation, example, or data provided herein.

All figures shown in this document are in U.S. dollars unless otherwise noted.

This document is issued in:

  • The United States by Principal Global Investors, LLC, which is regulated by the U.S. Securities and Exchange Commission.
  • Europe by Principal Global Investors (Europe) Limited, Level 1, 1 Wood Street, London EC2V 7JB, registered in England, No. 03819986, which has approved its contents, and which is authorised and regulated by the Financial Conduct Authority.
  • Singapore by Principal Global Investors (Singapore) Limited (ACRA Reg. No. 199603735H), which is regulated by the Monetary Authority of Singapore and is directed exclusively at institutional investors as defined by the Securities and Futures Act (Chapter 289).
  • Hong Kong by Principal Global Investors (Hong Kong) Limited, which is regulated by the Securities and Futures Commission and is directed exclusively at professional investors as defined by the Securities and Futures Ordinance.
  • Switzerland by Principal Global Investors (Switzerland) GmbH which is authorised by the Swiss Financial Market Supervisory Authority (“FINMA”).
  • Australia by Principal Global Investors (Australia) Limited (ABN 45 102 488 068, AFS License No. 225385), which is regulated by the Australian Securities and Investment Commission and is only directed at wholesale investors (as defined in sections 761G and 761GA of the Corporations Act)
  • This document is issued by Principal Global Investors LLC, a branch registered in the Dubai International Financial Centre and authorized by the Dubai Financial Services Authority as a representative office and is delivered on an individual basis to the recipient and should not be passed on or otherwise distributed by the recipient to any other person or organization. This document is intended for sophisticated institutional and professional investors only.

In Europe, this document is directed exclusively at Professional Clients and Eligible Counterparties and should not be relied upon by Retail Clients (all as defined by MiFID II). Principal Global Investors is a global asset management company and strategies may be accessed from entities other than that which is issuing this document. Clients that do not directly contact with Principal Global Investors (Europe) Limited (“PGIE”) will not benefit from the protections offered by the rules and regulations of the Financial Conduct Authority, including those enacted under MiFID II. Further, where clients do contract with PGIE, PGIE may delegate management authority to affiliates that are not authorised and regulated within Europe and in any such case, the client may not benefit from all protections offered by the rules and regulations of the Financial Conduct Authority, including those enacted under MiFID II.

This document is intended for sophisticated institutional and professional investors only and is delivered on an individual basis to the recipient and should not be passed on, used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation, or otherwise distributed by the recipient to any other person or organization.

There is no guarantee that socially responsible investing (SRI) products or strategies will produce returns similar to traditional investments. Socially responsible investing is qualitative and subjective by nature, and there is not guarantee that the criteria utilized, or judgment exercised will reflect the beliefs or values of any one particular investor. Information regarding responsible practices is obtained through voluntary or third-party reporting, which may or may not be accurate or complete, and is dependent on such information to evaluate a company’s commitment to, or implementation of, responsible practices. Socially responsible norms differ by region. There is no assurance that the socially responsible investing strategy and techniques employed will be successful.

©2018 Principal Financial Services, Inc. Principal, Principal and symbol design and Principal Financial Group are registered trademarks and service marks of Principal Financial Services, Inc., a Principal Financial Group company. Principal Global Investors leads global asset management at Principal®. Principal Real Estate Investors is the dedicated real estate investment management group within Principal Global Investors.

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