2022 Communication on Progress

Principal Financial Group

  • Governance

    Policies and Responsibilities

    1. Does the Board / highest governance body or most senior executive of the company:

    Optional comment
    Principal Chairman, President, and CEO – Dan Houston – annually communicates the relevance of sustainable development, the company’s social and environmental performance, and sustainability commitments to our stakeholders primarily via our annual Sustainability Report (https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP), Annual Report (https://s21.q4cdn.com/251671177/files/doc_downloads/2021/PrincipalFinancial2021AR.pdf), 10-K (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001126328/dad6382f-e88d-43a3-9399-d80dfa6e4509.pdf) and Proxy Statement.

    2. Does the company have a publicly stated commitment regarding the following sustainability topics?

    No, this is not a current priority

    No, but we plan to have a commitment within 2 years

    Yes, and the commitment is focused on our own operations

    Yes, and the commitment includes our own operations and the value chain

    Yes, and the commitment includes our own operations and the value chain along with communities and society

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Human rights statement: https://www.principal.com/about-us/our-company/policies/human-rights-statement Global Code of Conduct: https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf (page 23) Environmental policy: https://www.principal.com/about-us/our-company/policies/environmental-policy Anti-Bribery and Corruption policy: https://www.principal.com/about-us/our-company/policies/anti-bribery-and-corruption-policy Supplier Code of Conduct: https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP

    3. Does the company have in place a code of conduct regarding each of the following sustainability topics?

    No, this is not a current priority

    No, but we plan to have a code of conduct within two years

    Yes, focused on employee conduct

    Yes, focused on employees and suppliers

    Yes, focused on employees, suppliers, and other business relationships

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Principal Global Code of Conduct (PDF): https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf (pages 11, 23, 26, and 36) Supplier Code of Conduct: https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP

    4. Has the company appointed an individual or group responsible for each of the following sustainability topics?

    No one is specifically responsible for this topic

    Yes, with limited influence on outcomes (e.g., limited access to internal information, limited decision-making authority)

    Yes, with moderate influence on outcomes (e.g., has access to relevant information, reports to senior manager)

    Yes, with direct influence of some outcomes (e.g., has access to relevant information, includes one or more senior manager with decision making rights

    Yes, with direct influence at the highest levels of the organization (e.g., has access to relevant information, includes most senior members of organization)

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Human Rights – Our Chief Compliance Officer is responsible for overseeing our enterprise-wide compliance strategy and program, which includes topics related to human rights. Labour Rights/Decent Work – Our EVP and HR Officer is responsible for ensuring fair labor rights and promoting an environment of decent work, which involves employment that is productive and delivers a fair income. Environment – Our Vice President of Enterprise Worksite Services is responsible for overseeing our enterprise-level environmental programs and progress for Principal owned and controlled locations, which includes monitoring and managing greenhouse gas emissions, energy usage, water consumption, and waste. Anti-Corruption - Our Chief Compliance Officer is responsible for overseeing our enterprise-wide compliance strategy and program, which includes topics related to anti-bribery and corruption policy, education, and certification process; anti-money laundering; and Privacy.

    5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?

    No formal structure

    Yes, and with limited influence on outcomes (e.g., limited access to internal information necessary to understand risks, poor representation from relevant departments or functions)

    Yes, with moderate influence on outcomes (e.g., it includes representatives of some functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, reports to senior manager)

    Yes, with direct influence on some outcomes (e.g., it includes representatives of functions, departments, or business units most relevant for addressing the risks concerned, has access to relevant information, it involves one or more members of senior management)

    Yes, and with direct influence at the highest level of the organization (e.g., full access to relevant information, it involves members at highest level of organization)

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    The Principal Financial Group® ESG Task Force is made up of members appointed by Chairman, President, and CEO Dan Houston. The members are leaders across the organization and report quarterly to the Principal Board of Directors. The ESG Task Force meets monthly to discuss our approach to sustainability reporting frameworks, public policy engagement, social and environmental key performance indicators, goal setting, performance against our ESG commitments, and the company’s long-term purpose strategy. Furthermore, the role of the ESG Task Force is to ensure that material issues are integrated into and help guide our business decisions, drive our comprehensive ESG strategy, and continually engage with stakeholders. In the context of our industry and areas of expertise, we have identified 21 sustainability issues that are material to Principal, which include the following: • Climate impact • Anti-corruption Additionally, we have individuals at the executive level – as well as cross-functional operational committees, such as enterprise risk, compliance, and employee relations – that are responsible for human rights and labour/decent work.

    Prevention

    6. Does the company have a process or processes to assess risk?

    No, this is not a current priority

    No, but we are planning to develop one in the next two years

    Yes, related to our own operations

    Yes, related to our own operations and entire value chain and other business relationships

    Human rights risks

    Labour rights risks

    Environmental risks

    Corruption risks

    Optional comment
    Risk management is an essential component of our culture and business model. Management within our business units and functional areas is primarily responsible for identifying, assessing, monitoring, and managing risk exposures. Our company-wide Enterprise Risk Management program includes a chief risk officer, whose team operates independently from the business units, and an Enterprise Risk Management Committee, composed of members from the executive management team, that provides enterprise-wide oversight for material risks. We also have a robust internal audit function. We regularly assess ESG commitments across Principal using a risk-based approach that includes but is not limited to the following: human capital and rights, product, and governance oversight activities (organizational structure, committees, etc.), data privacy, cybersecurity, and scope 1, 2, and 3 greenhouse gas (GHG) emissions and progress. For more detail, please refer to our 2021 Sustainability Report: https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP (pages 46-54).

    7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?

    No, this is not a current priority

    No, but we are planning to develop one in the next two years

    Yes, related to our own operations

    Yes, related to our own operations and entire value chain and other business relationships

    Human rights risks

    Labour rights risks

    Environmental risks

    Corruption risks

    Optional comment
    Risk management is an essential component of our culture and business model. Management within our business units and functional areas is primarily responsible for identifying, assessing, monitoring, and managing risk exposures. Our company-wide Enterprise Risk Management program includes a chief risk officer, whose team operates independently from the business units, and an Enterprise Risk Management Committee, composed of members from the executive management team, that provides enterprise-wide oversight for material risks. We also have a robust internal audit function. We regularly assess ESG commitments across Principal using a risk-based approach that includes but is not limited to the following: human capital and rights, product and governance oversight activities (organizational structure, committees, etc.), data privacy, cybersecurity, and scope 1, 2, and 3 greenhouse gas (GHG) emissions and progress. For more detail, please refer to our 2021 Sustainability Report: https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP (pages 46-54).

    Concerns and grievance mechanisms

    8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?

    Optional comment
    As a global company, we’re committed to nurturing an inclusive and diverse workforce based on the highest ethical standards and a dedication to fairness, integrity, and trust. We strive to uphold the principles set forth in these standards and expect our employees, business partners, suppliers, vendors, and those who sell our products to adhere to these same standards. Violations of our commitment to human rights are to be reported to our Ethics Hotline or submitted via written format in our online reporting mechanisms. Our company does not tolerate, and takes aggressive action against, unethical conduct or fraud whether perpetrated by employees, customers, vendors, those who sell our products or others. Employees, suppliers, and customers have an ethics hotline and online reporting form available for them to use to report any suspicious activity. For more detail, please refer to our 2021 Sustainability Report: https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP (pages 46-54). Ethics hotline: https://www.principal.com/about-us/our-company/policies/report-fraud-or-unethical-conduct

    8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.

    No

    Yes

    Is the process communicated to all employees/workers in local languages?

    Is the process available to non-employees (e.g., contractors, vendors, suppliers)?

    Is the process confidential (e.g., whistleblowing process)?

    Are there processes in place to avoid retaliation?

    Can concerns be raised about suppliers or other business relationships (e.g., clients, partners, etc.)

    Other (Please provide additional information)

    Optional comment
    Our company does not tolerate, and takes aggressive action against, unethical conduct or fraud whether perpetrated by employees, customers, vendors, those who sell our products, or others. Employees and suppliers are informed of process steps related to raising concerns about company conduct via the Global Code of Conduct and Supplier Code of Conduct. Employees, suppliers, and customers have an ethics hotline and online reporting form available for them to use to report any suspicious activity. Our hotline is available on our website as well as in our Global Code of Conduct available in English, Portuguese, Spanish, Thai, and traditional Chinese (https://investors.principal.com/investor-relations/our-business/corporate-governance/default.aspx . Reported concerns are treated confidentially. Principal won’t retaliate against any employee for reporting in good faith suspected unethical conduct or violations of law as stated in our Whistleblower policy. Retaliation against an employee for reporting an issue in good faith is itself a violation of our Code. Global Code of Conduct: https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf (page 38) Supplier Code of Conduct: https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP Ethics hotline: https://www.principal.com/about-us/our-company/policies/report-fraud-or-unethical-conduct

    9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?

    No process to enable remedy to stakeholders

    Remedy available to some stakeholders (i.e., some geographies, employees only)

    Remedy is available to all affected stakeholders

    Remedy is available to all stakeholders, and suppliers are expected to have similar policies

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    Our company does not tolerate, and takes aggressive action against, unethical conduct or fraud whether perpetrated by employees, customers, vendors, those who sell our products, or others. Employees and suppliers are informed of process steps related to raising concerns about company conduct via the Global Code of Conduct and Supplier Code of Conduct. Employees, suppliers, and customers have an ethics hotline and online reporting form available for them to use to report any suspicious activity. Our hotline is available on our website as well as in our Global Code of Conduct available in English, Portuguese, Spanish, Thai, and traditional Chinese (https://investors.principal.com/investor-relations/our-business/corporate-governance/default.aspx . Reported concerns are treated confidentially. Principal won’t retaliate against any employee for reporting in good faith suspected unethical conduct or violations of law as stated in our Whistleblower policy. Retaliation against an employee for reporting an issue in good faith is itself a violation of our Code. Our company has policies and procedures in place to appropriately investigate concerns in a timely manner. Based on the results of the investigation, our company will take appropriate action to address violations of law, unethical conduct, or violations of our company’s policies and Global Code of Conduct. Global Code of Conduct: https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf (page 38) Supplier Code of Conduct: https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP

    Lessons

    10. How does the company capture lessons regarding each of the following sustainability topics?

    No lessons are regularly captured

    Conducts root cause analyses/investigation of major incidents

    Conducts root cause analyses/investigation and changes organizational policies, processes, and practices accordingly

    Systematically conducts root cause analyses/investigation and leverages learnings to influence both internal and external affairs

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    We leverage our enterprise incident management process to capture lessons. Incident management is the process of managing anything that affects, or has the potential to affect, the company's ability to perform its business operations or impacts the security of our customers, employees, or business critical information. While most incidents are day-to-day issues that are handled by our employees, there are times when an incident becomes more serious and should be escalated for enterprise oversight and coordination of response efforts. Our operational response team, core response team, and enterprise management group work together to appropriately capture lessons and implement changes in our systems, if needed.

    Executive Pay

    11. Is executive pay linked to performance on one or more of the following sustainability topics?

    No, and we have no intention to change

    No, but we plan to within two years

    Yes

    Human Rights

    Labour Rights / Decent Work

    Environment

    Anti-Corruption

    Optional comment
    While we have senior leaders across the organization that have compensation tied to ESG performance, we are further considering and working towards linking executive pay to ESG performance, which may include topics related to human rights, labour rights/decent work, environment, and anti-corruption.

    Board Composition

    12. Percentage of individuals within the company’s Board / highest governance body by:

    Number/Percentage

    Not applicable (Please provide additional information)

    Total number of board members (#)

    13

    Male (%)

    62

    Female (%)

    38

    Non-binary (%)

    0

    Under 30 years old (%)

    0

    30-50 years old (%)

    0

    Above 50 years old (%)

    100

    From minority or vulnerable groups (%)

    31

    Executive (%)

    8

    Independent (%)

    92
    Optional comment
    Please see our proxy statement (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001126328/7412516e-e307-4ff8-904a-28e7ba398a60.pdf, page 6) and 2021 Sustainability Report (https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP, page 48) for more details on our board members.

    13. Do you produce sustainability reporting according to:

    U.N. SDGs
    Optional comment
    Our 2021 Sustainability Report and the information within has been prepared in accordance with the Global Reporting Initiative (GRI) and the Sustainable Accounting Standards Board (SASB) standards and in alignment with United Nations SDGs and the Task Force on Climate-related Financial Disclosures (TCFD). For more detail, refer to our 2021 Sustainability Report (page 84): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    Data Assurance

    14. Is the information disclosed in this questionnaire assured by a third-party?

    A third party completes a limited assurance of our U.S. scope 1, 2, and 3 greenhouse gas (GHG) emissions data on an annual basis. An internal audit is performed for all information disclosed in our Sustainability Report. For more detail, please refer to our 2021 CDP Climate Change Questionnaire, which covers our U.S. GHG emissions from FY2020 (pages 58-62): https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP. We are in the process of verifying our FY2021 GHG emissions for our upcoming 2022 CDP Climate Change Questionnaire, which will be released in early Q3 2022.
    Optional comment
    For more detail, please refer to our 2021 CDP Climate Change Questionnaire, which covers our U.S. GHG emissions from FY2020 (pages 58-62): https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP. We are in the process of verifying our FY2021 GHG emissions for our upcoming 2022 CDP Climate Change Questionnaire, which will be released in early Q3 2022.
  • Human Rights

    Materiality / Saliency

    1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?

    Optional comment
    Two years ago, we went through a stringent evaluation process of our reporting landscape to review material ESG factors alongside developments in industry regulations, trending and emerging industry research, and shareholder resolutions on ESG topics. We checked these against industry peers, consulted area experts, and cross-referenced our reporting frameworks (Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and Climate Disclosure Project (CDP)). In 2021, we conducted a similar analysis to update and ensure our ESG strategy is informed by sustainability factors that are important to our stakeholders and contribute to positive social and environmental impact. In the context of our industry and areas of expertise, we identified seven key topics that are material to Principal, including but not limited to: • Employee engagement o Diversity, equity, and inclusion o Engagement and satisfaction o Leadership and development o Talent attraction and retention • Governance, ethics, and risk o Data security and privacy These ESG issues are directly tied to human rights issues, including forced labour, non-discrimination in respect of employment and occupation, working conditions, digital security / privacy, and rights of women and/or girls. For more detail, please review our Materiality Matrix on our website (https://www.principal.com/sustainability/esg-strategy) and in our 2021 Sustainability Report: (pages 15-18): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP.

    Commitment

    2. Does the company have a policy commitment in relation to the following human rights issues?

    No, and we have no plans to develop a policy

    No, but we plan to in the next two years

    Yes, included within a broader policy

    Yes, articulated as a stand-alone policy

    Rights of women and/or girls

    2022

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    2020

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    For more detail regarding digital security / privacy, please see our Digital Privacy Policy (https://www.principal.com/full-privacy-policy), our Global Privacy Policy (https://secure02.principal.com/publicvsupply/GetFile?fm=WW1064&ty=VOP), other privacy policies (https://www.principal.com/privacy-policies), and our Global Code of Conduct (page 15: https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf). For more detail regarding rights of women and/or girls, please see our Human Rights statement (https://www.principal.com/about-us/our-company/policies/human-rights-statement) and our Employment policies (https://www.principal.com/about-us/our-company/policies/employment-policies).

    2.1. For each human rights policy, is it:

    Aligned with international human rights standards?

    Publicly available?

    Approved at most senior level of the company?

    Applied to the company’s own operations?

    Applied to the company’s supply chain and/or other business relationships?

    Developed involving human rights expertise from inside and outside the company?

    Other (Please provide additional information)

    Freedom of expression

    Digital security / privacy

    Rights of women and/or girls

    Access to culture

    Rights of indigenous peoples

    Free, prior and informed consent

    Rights of refugees and migrants

    Access to water and sanitation

    Optional comment
    Principal respects and supports human rights principles as defined by the principles of the Universal Declaration of Human Rights (UDHR), the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work (“ILO Declaration”), the United Nations Global Compact and the United Nations Guiding Principles on Business and Human Rights. We will not tolerate human rights violations of any kind, including human trafficking or slavery, forced labour and child labor and we are committed to implementing effective systems and controls to prevent violations from taking place anywhere in our business or supply chains. Our Human Rights statement is available on our website (https://www.principal.com/about-us/our-company/policies/human-rights-statement). We expect suppliers to comply with all applicable wage and benefit laws and take all precautions reasonably necessary to protect customer and employee information and to maintain physical, technical, and procedural safeguards in compliance with all applicable data security and cybersecurity laws, including the European Union General Data Protection Regulation (GDPR) and others. Our Supplier Code of Conduct is available on our website (https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP). Policies and procedures related to working conditions (wages, working hours), digital security / privacy, and rights of women and/or girls are overseen by our Executive Management Group (EMG) and are also governed by the Principal board of directors. The Nominating and Governance Committee oversees risk and mitigation related to the Company’s environmental, sustainability and corporate social responsibilities as well as the Company’s political contribution activities, which includes areas relating to diversity, equity, and inclusion and cybersecurity. The Human Resources Committee oversees key talent indicators, which also includes diversity, equity, and inclusion, recruiting and development programs, and compensation structures.

    Prevention

    3. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following human rights issues?

    No engagement on this topic

    To better understand the risks/ impacts in question

    To discuss potential ways to prevent or mitigate the risks/ impacts in question

    To agree on a way to prevent/ mitigate the risks/ impacts in question

    To assess progress in preventing /mitigating the risks/impacts in question

    To collaborate in the prevention/ mitigation of the risks/ impacts in question

    Rights of women and/or girls

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    Principal Foundation collaborated with grantee organizations to provide low-cost access to legal assistance to low-income people. Some of their issues related to wages and working conditions. Principal collaborated with the Cyber Readiness Institute to prevent risks/impacts related to digital security / privacy, paying particular attention to helping small and medium businesses leverage the learnings large institutions are surfacing. The Principal Foundation also offered support to https://www.freefrom.org/our-work/ to support the movement against gender-based violence in centering financial security for all survivors.

    4. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this human rights issue?

    Provided internal training/ capacity building for the direct workforce

    Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)

    Conducting an audit process and/or corrective action plan

    Collective Action with peers or other stakeholders to address the issue

    Collaboration with governmental or regulatory bodies

    Other (Please provide additional information)

    No action within reporting period

    Rights of women and/or girls

    In 2021 we launched a new mentorship program designed to pair a group of women in Latin America to mentor other women in the region.

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    With regard to digital security / privacy, Information Security and Risk collaborates with other areas across the enterprise to provide 10 information security and privacy-related online courses to new hires within their first month of employment and to existing employees on a quarterly basis. In 2021, 96.4% of newly hired employees completed cybersecurity trainings. Additional role-based training (e.g., access management, cloud security, secure software, etc.) is also required annually for security professionals. We regularly conduct supplier risk reviews to help ensure access to and the proper handling of confidential, personal, and/or proprietary data. Our Enterprise Written Information Security Program aligns with the National Institute of Standards and Technology (NIST) Cyber Security Framework functions: identify, protect, detect, respond, and recover. Finally, we’re also involved in various external cybersecurity, data protection, and privacy efforts. For more detail, please refer to our 2021 Sustainability Report (pages 46-52): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP. Fostering a diverse workforce and inclusive culture is foundational to who we are and the change we seek throughout our business operations. We strive to embody these principles every day through our commitment to diversity, equity, and inclusion, especially for women and people of color. Our Diversity Index comprises 17 metrics and measures our ability to attract, engage, promote, and retain diverse talent. Our performance over the last year tells us that we’re making genuine progress on hiring, retaining, and promoting women and people of color across the organization. We have 10 global employee resource groups (ERGs), two of which are “Women in Leadership” and “Women in Technology.” Also, in 2021 we launched a new mentorship program designed to pair a group of women in Latin America to mentor other women in the region. We also launched a global independent pay equity study focused on race and gender. Results show our management of pay equity ranks best in class among financial services companies reporting pay equity data. For more detail, please refer to our 2021 Sustainability Report (pages 22-37): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP.

    5. Who receives training for the following human rights issues?

    No training provided

    Select employees

    All employees

    Contractors

    Direct suppliers of the organization

    Indirect suppliers of the organization

    Other – such as partners, clients, etc.

    Rights of women and/or girls

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    Information Security and Risk collaborates with other areas across the enterprise to provide 10 information security and privacy-related online courses to new hires within their first month of employment and to existing employees on a quarterly basis. In 2021, 96.4% of newly hired employees completed cybersecurity training. Additional role-based training (e.g., access management, cloud security, secure software, etc.) is also required annually for security professionals. In 2021, we delivered our “Culture of Inclusion” training, which had a 99% completion rate for all new hires in the U.S. Similarly, our “Managing Diversity for Leaders” training had a 96% completion rate for all new leaders in the U.S., and we deployed INCLUDE training—the neuroscience of smarter teams—to our leaders worldwide. This effort totaled 5,000 hours of training for our leaders, who became further equipped to lead more inclusively and unlock the benefits of a diverse team.

    6. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following human rights issues?

    No monitoring of progress

    Review issues on ad-hoc basis

    Set annual targets/ goals, track progress over time (internal programs only)

    Set annual targets/ goals, track progress over time (internal and external programs)

    Other (Please provide additional information)

    Rights of women and/or girls

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    2021 was the second year of our Voice of Employee program—a multifaceted and agile approach that allows us to better understand employees’ needs, quickly sense and respond, and ensure we’re best positioned to adapt our business strategies based on the ongoing feedback we receive from our employees. The Voice of Employee program combines the power of short, frequent pulse surveys, which are conducted three times per year, with our enterprise readiness team—a network of 350 employees around the globe that help connect insights and action at a local level based on the relevant context. This approach allows us to be engaged with “always-on” listening and further embeds active listening techniques and methods into our employee feedback process. We’re always on a mission to improve the overall employee experience. In 2021, themes we heard from employees included: • insights of the ongoing COVID-19 pandemic • continued work-life balance and flexibility • workload management • compensation Through town halls, communications, and targeted tactics, leaders and teams continue to respond to employee feedback at the enterprise and local levels to address opportunities and react quickly to employee sentiment. Recruiting employees with unique experiences, backgrounds, and talents strengthens our company. Along with a significant financial investment in recruiting diverse talent in the U.S. during 2021, we also invested 140 hours at recruiting and student events and an estimated 350+ hours interviewing candidates for internships. These efforts led to hiring over 200 interns, representing 28 different states and 75 colleges. We continue to see increasing interest and participation of diverse candidates in our internship cohorts. We also have a relationship with the Management Leadership for Tomorrow (MLT) program, which provides access to over 1,000 diverse undergraduate and MBA candidates targeting technology, accounting, finance, and investments. This year, of the 800 résumés received, this competitive program yielded 10 active candidates that are the top talent from their junior- and senior-level classes. This internship partnership is aimed at building our pipeline into early career full-time opportunities at Principal. For students within the MLT organization, we hosted a summer webinar series centered on professional development with topics such as “Inclusion in technology,” “Becoming an effective analyst,” and “Crafting a values-driven career.” We had 235 individuals hired into these learning and development programs in 2021, with 38% of participants being women and 30% being people of color. Every year, Principal awards higher education-focused grants to key university partners. A total of $500,000 was awarded again in 2021. The focus of these grants is to help universities increase their DEI efforts on campus. Examples of scholarships we’ve funded include: • University of Iowa: Women in Finance • Tippie College of Business Gateway program (targeted to underrepresented populations in business) • Iowa State University: Women in Science and Engineering • University of Wisconsin Milwaukee—scholarships awarded by the African American Faculty Staff Council • University of Northern Iowa School of Business diversity initiatives • Drake University diversity scholarships Principal also believes in protecting the confidentiality of the personal data entrusted to us by our customers, employees, business partners, and other individuals. We limit access to personal data to those with a business need, and only disclose such information as required or permitted by law. Our enterprise approach combines information security, privacy, and data governance to foster a culture of data protection. Information at Principal is kept secure and confidential through various security features and procedures. Throughout 2021, we made the following enhancements to our cybersecurity and privacy practices to support our strategy of constantly looking for opportunities to improve these features and procedures: • increased our awareness and training efforts focused on the dangers of phishing, • invested in cloud security training for employees across the organization, • established formal procedures to satisfy our security control standards, • focused our attention on resiliency considering worldwide emerging ransomware risks, • added insider threat and attack surface management capabilities, • enhanced our call center authentication processes to further improve security measures already in place, • continued to grow our cybersecurity team, which is now at 200+ employees globally, and our enterprise privacy team, which doubled in 2021, and • incorporated additional NIST-based privacy controls into our information security control standards.

    Response

    7. During the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to adverse impact associated with the following human rights issue(s)?

    Yes

    No

    Choose to not disclose

    Not applicable (Please provide additional information)

    Rights of women and/or girls

    Freedom of expression

    Rights of refugees and migrants

    Digital security / privacy

    Rights of indigenous peoples

    Access to culture

    Free, prior and informed consent

    Access to water and sanitation

    Optional comment
    Principal takes action to monitor and manage issues related to digital security / privacy and rights of women and/or girls. We monitor employee sentiment, including workload, engagement, satisfaction, diversity, inclusion, belonging, advancement, retention, and promotion, among other indicators, in our Engagement Index, Inclusion Index, and Diversity Index. We also believe in protecting the confidentiality of the personal data entrusted to us by our customers, employees, business partners, and other individuals. We limit access to personal data to those with a business need, and only disclose such information as required or permitted by law. Our enterprise approach combines information security, privacy, and data governance to foster a culture of data protection. Safeguarding the confidentiality, integrity, and availability of information is one of our highest priorities. Therefore, we protect information in many ways—from ensuring our buildings are secure, to proactively preparing for disasters and business interruptions, to using secure computing practices.

    8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.

    2021 was the second year of our Voice of Employee program—a multifaceted and agile approach that allows us to better understand employees’ needs, quickly sense and respond, and ensure we’re best positioned to adapt our business strategies based on the ongoing feedback we receive from our employees. The Voice of Employee program combines the power of short, frequent pulse surveys, which are conducted three times per year, with our enterprise readiness team—a network of 350 employees around the globe that help connect insights and action at a local level based on the relevant context. This approach allows us to be engaged with “always-on” listening and further embeds active listening techniques and methods into our employee feedback process. We’re always on a mission to improve the overall employee experience. In 2021, themes we heard from employees included: • insights of the ongoing COVID-19 pandemic • continued work-life balance and flexibility • workload management • compensation Through town halls, communications, and targeted tactics, leaders and teams continue to respond to employee feedback at the enterprise and local levels to address opportunities and react quickly to employee sentiment. Principal also believes in protecting the confidentiality of the personal data entrusted to us by our customers, employees, business partners, and other individuals. We limit access to personal data to those with a business need, and only disclose such information as required or permitted by law. Our enterprise approach combines information security, privacy, and data governance to foster a culture of data protection. Information at Principal is kept secure and confidential through various security features and procedures. Throughout 2021, we made the following enhancements to our cybersecurity and privacy practices to support our strategy of constantly looking for opportunities to improve these features and procedures: • increased our awareness and training efforts focused on the dangers of phishing, • invested in cloud security training for employees across the organization, • established formal procedures to satisfy our security control standards, • focused our attention on resiliency considering worldwide emerging ransomware risks, • added insider threat and attack surface management capabilities, • enhanced our call center authentication processes to further improve security measures already in place, • continued to grow our cybersecurity team, which is now at 200+ employees globally, and our enterprise privacy team, which doubled in 2021, and • incorporated additional NIST-based privacy controls into our information security control standards.
  • Labour

    Commitment

    1. Does the company have a policy commitment in relation to the following labour rights principles?

    No, and we have no plans to develop a policy

    No, but we plan to in the next two years

    Yes, included within a broader policy

    Yes, articulated as a stand-alone policy

    Not applicable (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    2022

    Forced labour

    2022

    Child labour

    2022

    Non-discrimination in respect of employment and occupation

    2020

    Occupational safety and health

    2021

    Working conditions (wages, working hours)

    2021
    Optional comment
    For more detail regarding working conditions, please see our Global Code of Conduct (page 23: https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf), our Human Rights statement (https://www.principal.com/about-us/our-company/policies/human-rights-statement), our Employment policies (https://www.principal.com/about-us/our-company/policies/employment-policies), and our 2021 Sustainability Report (pages 33, 36-37, and 54): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP.

    1.1. For each labour rights policy, is it:

    Aligned with international labour standards?

    Publicly available?

    Approved at most senior level of the company?

    Applied to the company’s own operations?

    Applied to the company’s supply chain and/or other business relationships?

    Developed involving labour rights expertise from inside and outside the company?

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    Principal complies with all labour laws in all countries in which we operate. While we’re committed to upholding international labour standards as they relate to non-discrimination, as labour laws vary from country to country we must comply with national labor laws, which may cover differing protected classes. To remain inclusive of the differences in international labour laws, our non-discrimination policy is written to be applied in these various circumstances. For more detail regarding working conditions, please see our Global Code of Conduct (https://s21.q4cdn.com/251671177/files/doc_downloads/code-of-conduct-english.pdf), our Human Rights statement (https://www.principal.com/about-us/our-company/policies/human-rights-statement), our Employment policies (https://www.principal.com/about-us/our-company/policies/employment-policies), and our Supplier Code of Conduct: https://secure02.principal.com/publicvsupply/GetFile?fm=WW49&ty=VOP&EXT=.VOP)

    Prevention

    2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?

    No engagement on this topic

    To better understand the risks/ impacts in question

    To discuss potential ways to prevent or mitigate the risks/ impacts in question

    To agree on a way to prevent/ mitigate the risks/ impacts in question

    To assess progress in preventing/ mitigating the risks /impacts in question

    To collaborate in the prevention/ mitigation of the risks/ impacts in question

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    We have widely socialized, written policies against forced labour and child labour. We have enterprise-wide policies and take steps to ensure that we use only voluntary labour and that all our workers are of legal working age in their jurisdiction.

    Child labour

    We have widely socialized, written policies against forced labour and child labour. We have enterprise-wide policies and take steps to ensure that we use only voluntary labour and that all our workers are of legal working age in their jurisdiction.

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    In general, we have continuous, internal communications aimed at proactive compliance, mitigating risk, and promoting positive employee relations for each of these topics. Forced labour & child labour: We have widely socialized, written policies against forced labour and child labour. We have enterprise-wide policies and take steps to ensure that we use only voluntary labour and that all our workers are of legal working age in their jurisdiction. Non-discrimination: We have widely socialized, written policies in place to mitigate discrimination, conduct investigations of discriminatory activity if warranted, provide annual training to all employees, and communicate with employees at all levels of the company on this topic. Occupational safety and health: Our Property Solutions and Safety & Security teams, which report to the Enterprise Worksite Services team, oversees our safety management program. Principal tracks the number of injuries/incidents annually, and we ensure proper investigation and remediation if any accidents/incidents occur. In 2021 we also continued to monitor the external environment and adjusted our COVID-19 protocols when changes were warranted, which included responding to local masking and vaccination mandates in some of our locations. Working conditions: Principal ensures that all wages are above the legal minimum wage in all markets in which we operate. We comply with all necessary regulations on working hours, regularly engage with leaders and employees about wages and working hours, monitor local and state laws, and audit our pay practices each year. For more detail, please see our COVID-19 care and response in our 2021 Sustainability Report (page 6): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP.

    3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?

    Provided internal training/ capacity building for the direct workforce

    Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)

    Conducting an audit process and/or corrective action plan

    Collective Action with peers or other stakeholders, in particular workers' organizations, to address the issue

    Collaboration with governmental or regulatory bodies

    Other (Please provide additional information)

    No action within reporting period

    Freedom of association and the effective recognition of the right to collective bargaining

    Principal employees are permitted to discuss their compensation, wages, and working conditions during working hours with their coworkers.

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    Principal employees are permitted to discuss their compensation, wages, and working conditions during working hours with their coworkers. The topics of forced labour, child labour, and occupational safety and health are covered in our computer-based training (CBT) on the Global Code of Conduct (the “Code”). The Global Code of Conduct is disseminated annually to all employees and requires mandatory reading and compliance with the Code. These topics are included in specific training materials every three years, and all new hires are required to complete mandatory training on these topics during their first year at the company. Training on non-discrimination and anti-harassment is offered and required for completion for all Principal employees each year.

    4. Who receives training for the following labour rights issues?

    No training provided

    Select employees

    All employees

    Contractors

    Direct suppliers of the organization

    Indirect suppliers of the organization

    Other – such as partners, clients, etc.

    Freedom of association and the effective recognition of the right to collective bargaining

    Forced labour

    Child labour

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    Working conditions (wages, working hours)

    Optional comment
    Anti-harassment, anti-discrimination, and non-retaliation are a part of our Global Code of Conduct and are included in required training for all new employees during the onboarding process. Existing Principal employees receive training on non-discrimination and anti-harassment each year. Select employees receive additional role-specific training on forced labour, child labour, occupational health and safety, and working conditions throughout the year. To the extent that any stakeholder raises a concern about one or more of these topics, there are formal procedures for an investigation if needed. If Principal has credible reason to believe a stakeholder is not complying with these policies, we may take remedial action. For more detail, please refer to our Modern Slavery and Human Trafficking Statement (https://www.principalglobal.com/us/about-us/modern-slavery-and-human-trafficking-statement?_ga=2.198655471.1798207277.1655131049-424034.1644418140) and our 2021 Sustainability Report (https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP).

    5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?

    No monitoring of progress

    Review issues on ad-hoc basis

    Set annual targets/ goals, track progress over time (internal programs only)

    Set annual targets/ goals, track progress over time (internal and external programs)

    Other (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions.

    Forced labour

    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions.

    Child labour

    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions.

    Non-discrimination in respect of employment and occupation

    Occupational safety and health

    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions.

    Working conditions (wages, working hours)

    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions.
    Optional comment
    We continue to require that stakeholders comply with the “Code” and the expectations set forth in the “Code” regarding freedom of association, forced labour, child labour, non-discrimination, occupational safety and health, and working conditions. We create avenues for anonymous reporting, have implemented anti-retaliation policies, and mandatory training regarding the selected topics. We also require these same expectations of our suppliers and business partners, require compliance with all applicable laws and regulations, and communicate these expectations via our Supplier Code of Conduct.

    Performance

    6. What is the percentage of employees covered under collective bargaining agreements?

    Percent of employees (%)

    Unknown

    Employees covered under collective bargaining (%)

    1.3
    Optional comment
    The percentage of employees across our global workforce that are covered under collective bargaining agreements is approximately 1.3%.

    7. What is the percentage of employees in a trade union or other workers' organization?

    Percent of employees (%)

    Unknown

    Not applicable (Please provide additional information)

    Employees in a trade union or on a worker committee (%)

    1
    Optional comment
    Principal has labour unions in Chile.

    8. In the course of the reporting period, what was the percentage of women in:

    Percent of women (%)

    Unknown

    Senior leadership level position

    42

    Non-executive board

    42
    Optional comment
    As of December 31, 2021, 42% of executive level positions were held by women and 35% of senior management positions were held by women. Our board of directors had 13 members, of which 12 were independent/non-executive board members. Of the 12 independent/non-executive board members, five were women (42%). For more detail, please refer to our 2021 Sustainability Report (pages 29, 48): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP).

    9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?

    Salary ratio (%)

    Unknown

    Choose to not disclose

    Women / Men (%)

    Pay equity is central to our existing comprehensive compensation practices and policies. We conduct an annual, global pay audit to identify unexplained differences in pay between employees doing like work in commensurate positions. To ensure that the findings are objective, we conduct our annual pay audit with a credible third party. On a global level, our pay audit includes a gender pay gap assessment. While we do not currently disclose the specific results of our pay audit, we continue to be proud of our gender and racial pay equity performance, which supports our pay aligns with our stated non-discriminatory compensation philosophies.
    Optional comment
    For more detail, please refer to our 2021 Sustainability Report (page 33): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP).

    10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?

    Frequency of injury

    Unknown

    Choose to not disclose

    Frequency of injury

    The frequency of injury in 2021 was 0.000038% (the value cannot be entered into the data box), so we had to select "Choose to not disclose even though we are electing to disclose this information.
    Optional comment
    We calculate the injury rate using the number of work-related injuries divided by an estimated hours worked for all employees in the year. We currently only collect this data for our domestic U.S. locations. Data is reflective of FY2021.

    11. In the course of the reporting period, what was the company’s incident rate?

    Incident rate

    Unknown

    Choose to not disclose

    Incident rate

    Optional comment
    We are currently re-developing our incident management program so do not have the the data for FY2021 at this time.

    Response and Reporting

    12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?

    Yes

    No

    Choose to not disclose

    Not applicable (Please provide additional information)

    Freedom of association and the effective recognition of the right to collective bargaining

    We do not currently disclose this information

    Forced labour

    We do not currently disclose this information

    Child labour

    We do not currently disclose this information

    Non-discrimination in respect of employment and occupation

    We do not currently disclose this information

    Occupational safety and health

    We do not currently disclose this information

    Working conditions (wages, working hours)

    We do not currently disclose this information

    13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.

    N/A - we do not currently disclose this information.
  • Environment

    Commitment

    1. Does the company have a formal policy on the following environmental topics?

    No, and we have no plans to develop a policy

    No, but we plan to in the next two years

    Yes, included within a broader policy

    Yes, articulated as a stand-alone policy

    Not applicable (Please provide additional information)

    Climate Action

    2020

    Water

    2020

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    2020

    Energy & Resource Use

    2020
    Optional comment
    For more detail, please refer to our Environmental policy: https://www.principal.com/about-us/our-company/policies/environmental-policy

    1.1. For each environmental policy, is it:

    Aligned with international environmental standards?

    Publicly available?

    Approved at most senior level of the company?

    Applied to the company’s own operations?

    Applied to the company’s supply chain and/or other business relationships?

    Developed involving environmental expertise from inside and outside the company?

    Other (Please provide additional information)

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    For more detail, please refer to our Environmental policy: https://www.principal.com/about-us/our-company/policies/environmental-policy and our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP.

    Prevention

    2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?

    No engagement on this topic

    To better understand the risks/ impacts in question

    To discuss potential ways to prevent or mitigate the risks/ impacts in question

    To agree on a way to prevent/ mitigate the risks/ impacts in question

    To assess progress in preventing/ mitigating the risks/ impacts in question

    To collaborate in the prevention/ mitigation of the risks/ impacts in question

    Other (Please provide additional information)

    Climate Action

    Water

    The impacts of climate change are changing the availability of water across the globe. Therefore, it’s important to be responsible with the resources we utilize in the buildings we occupy, which means taking measures to reduce our water consumption, such as upgrading our buildings to incorporate low-flow toilets, automatic sinks, and landscape plants that require minimal water.

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Large amounts of greenhouse gas emissions come from landfills. Diverting waste from landfills via reducing material use, recycling, and composting helps to decrease our carbon footprint. We measure our waste at our U.S. offices and report on total waste and waste diverted from landfill through recycling and composting in our annual Sustainability Report.

    Energy & Resource Use

    Optional comment
    We collaborate with our procurement partners to manage transitional risk that will increase energy prices. For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP and our 2021 CDP Climate Change Questionnaire: https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP. Our 2022 CDP Climate Change Questionnaire will be released in Q3 2022).

    3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?

    Provided internal training/ capacity building for the direct workforce

    Building capacity among relevant business relationships (e.g., partners, suppliers, clients, etc.)

    Conducting an audit process and/or corrective action plan

    Collective Action with peers or other stakeholders to address the issue

    Collaboration with governmental or regulatory bodies

    Other (Please provide additional information)

    No action within reporting period

    Climate Action

    Water

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Energy & Resource Use

    Optional comment
    Our Facilities Management team receives education and recommendations on energy conservation, GHG reduction, and waste management improvements, received through bi-weekly meetings to discuss sustainability topics with our energy management consultant. Furthermore, Principal Real Estate Investors (PrinREI) has dedicated resources and policies in place to identify and assess climate-related risks and opportunities to its business. The Responsible Property Investing Policies that have been put into place aim to address many issues related to Environmental, Social, and Governance (ESG). Principal Real Estate Investors prioritizes the following factors with regards to climate change risks and opportunities: adhering to applicable rules and regulations is our highest priority, followed by contractual agreements with our customers, service level agreements with our suppliers and finally, other business unit dependencies. The Property Condition Assessment (“PCA”) consultant includes evaluation of the property’s high-risk hazards in their onsite review and provides recommendations for mitigation practices via capital improvements and/or operations practices. These recommendations are reviewed by the acquisitions team and engineer, and are incorporated into the underwriting and committee approval process as needed. Upon closing, the asset manager and property manager are notified of the property’s climate risks and prescribed climate risk mitigation strategies for each identified risk. For example, after major storm and flooding risks were identified at one of PrinREI’s facilities in Parsippany, NJ during the climate risk analysis, climate risk educational materials were distributed to the property managers at the site, which resulted in the implementation of weekly roof inspections, weekly parking lot storm drains inspections, and weekly generator tests. For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP and our 2021 CDP Climate Change Questionnaire: https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP. Our 2022 CDP Climate Change Questionnaire will be released in Q3 2022).

    4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?

    No monitoring of progress

    Review issues on ad-hoc basis

    Set annual targets/ goals, track progress over time (internal programs only)

    Set annual targets/ goals, track progress over time (internal and external programs)

    Other (Please provide additional information)

    Climate Action

    Water

    Principal measures and manages our water consumption for our U.S. offices but we have not set absolute or intensity reduction targets for water.

    Oceans

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Principal measures and manages our office/facility waste for our U.S. offices – and divert the majority of waste from landfill – but we have not set absolute or intensity reduction targets for waste.

    Energy & Resource Use

    Principal measures and manages our energy consumption for our U.S. offices – and had a 5% net reduction in energy during the FY2021 reporting period – but we have not set absolute or intensity reduction targets for energy consumption.
    Optional comment
    Climate Action: Principal used a Science Based Target Initiative (SBTi) tool when setting reduction commitments for our scope 1 and 2 GHG emissions, and we use JLL’s energy management program for goal setting and progress tracking. For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP and our 2021 CDP Climate Change Questionnaire: https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP. Our 2022 CDP Climate Change Questionnaire will be released in Q3 2022).

    4.1. For each environmental topic in which the company sets timebound goals / targets, what kind of targets has the company set?

    Description of targets (e.g., what is the target, absolute vs. intensity, externally verified, on track, etc.)

    Climate Action

    Principal has a goal to reduce our U.S. scope 1 and scope 2 greenhouse (GHG) emissions 40% by 2035 and achieve Net Zero GHG emissions by 2050. These are absolute reduction targets and are aligned with the Science Based Target Initiative and WB2°C scenario. We are currently on track to meeting our goal and obtain limited assurance on our GHG emissions on an annual basis by a third party.

    Energy & Resource Use

    Water

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Oceans

    Optional comment
    For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    4.2. For each environmental topic in which the company sets timebound goals / targets, how is progress against target / goal tracked?

    Progress is reviewed against goals annually or more frequently

    Progress is reported internally to the most senior level

    Progress is reported externally

    Other (Please provide additional information)

    Climate Action

    Energy & Resource Use

    Water

    Forests / Biodiversity / Land Use

    Air Pollution

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    Oceans

    Optional comment
    For more detail, please refer to our 2021 Sustainability Report (pages 20-21, 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?

    Yes

    No

    Choose to not disclose

    Not applicable (Please provide additional information)

    Climate Action

    We do not currently disclose this information.

    Water

    We do not currently disclose this information.

    Oceans

    We do not currently disclose this information.

    Forests / Biodiversity / Land Use

    We do not currently disclose this information.

    Air Pollution

    We do not currently disclose this information.

    Waste (e.g., chemical spills, solid waste, hazardous, plastic, etc.)

    We do not currently disclose this information.

    Energy & Resource Use

    We do not currently disclose this information.
    Optional comment
    We do not currently disclose this information.

    Climate Action

    6. What were the company’s gross global greenhouse gas emissions for the reporting period?

    Scope 1 Emissions

    Emissions (tCO2e)

    Scope 2 Emissions

    Emissions (tCO2e)

    Scope 3 Emissions

    Calculating our scope 3 portfolio emissions is a complex and lengthy process, requiring us to review different frameworks, consult industry experts, and adopt new ways of working across our investment teams. We have made significant progress in calculating emissions for those asset classes with readily available emissions data (mainly public equities and real estate equities that complete our ESG questionnaire), and we’re eager to advance this work in 2022 across our other asset classes and investments globally as emissions reporting and data transparency is enhanced across the industry.

    Emissions (tCO2e)

    Optional comment
    We currently only measure and report our U.S. scope 1 and 2 GHG emissions. Total U.S. scope 1 GHG emissions was 4,021 mtCO2e, and total U.S. scope 2 GHG emissions was 12,417 mtCO2e. At the end of 2021, we initiated a global GHG data collection project to capture our scope 1 and 2 global emissions for all Principal controlled facilities by collecting historic utility bills from international offices. For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP and our 2021 CDP Climate Change Questionnaire (FY2020, FY2021 is in process): https://secure02.principal.com/publicvsupply/GetFile?fm=WW1062&ty=VOP&EXT=.VOP.

    7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?

    Percent of revenue (%)

    Principal is a financial services company that offers a broad range of solutions to help individuals, growing businesses, and institutions build, protect, and advance their financial well-being. As an asset manager, we offer low carbon investment products in our investment portfolio management services. However, we do not report the R&D expenses for this service.

    8. Has the organization acted to support climate change adaptation and resilience?

    Optional comment
    For more detail, please refer to our 2021 Sustainability Report (pages 38-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    Energy / Resource Use

    9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.

    % of total energy consumption

    61
    Optional comment
    For more detail, please refer to our 2021 Sustainability Report (pages 5, 43-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    Technology

    10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?

    Percent of total revenue (%)

    Optional comment
    Principal Global Investors comprises multiple specialist investment teams and manages assets on behalf of a broad range of sophisticated investors in more than 70 countries including public and private pension funds, foundations and endowments, central banks, insurance companies, sub-advisory arrangements, sovereign wealth funds, and individual investors. Given the global span of our investment services, staying at the forefront of ESG regulatory changes and listening to our diverse client base to translate their ESG preferences into investment solutions is key. As the ESG landscape is evolving, our flexible approach to these issues allows us to offer options that follow a repeatable investment process while supporting client values and helping support their financial goals. We integrate ESG factors into our responsible investing philosophy. On the environmental side, this includes factors such as climate change, natural resources, pollution and waste, and environmental opportunities. Sustainability via our ESG integration practices is an inherent part of our investment strategies and products, but with changing client demands, regulatory influence and the need for more transparency in sustainable investment management, we have focused on converting and launching new funds that comply with heightened expectations, by regulators and clients alike, as sustainable. For products domiciled (or marketed) in the European Union, the recently launched Sustainable Finance Disclosure Regulation (SFDR) is an enhanced classification system that helps to highlight to investors the various levels of ESG and/or sustainability integration among products. SFDR classifies financial products into three categories: • Article 6 products do not integrate any kind of sustainability into the investment process. • Article 8 products promote environmental or social characteristics. • Article 9 products have an objective that includes sustainable investment outcomes. In 2021, four existing products were converted to Article 8 status under SFDR and many more products are in the process of converting. Additionally, we’ve launched four new funds; two with enhanced ESG integration features, a thematic focused on environmental infrastructure best practices, and an impact fund that is aligned with the United Nations Sustainable Development Goals (U.N. SDGs). For more detail, please refer to our 2021 Sustainability Report (pages 55-71): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP

    Sector-specific Questions

    11. Which sector(s) does the company operate in? If diversified, choose top 3 by revenue.

    Overall Environment

    21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.

    For more detail, please refer to our 2021 Sustainability Report (pages 5, 43-45): https://secure02.principal.com/publicvsupply/GetFile?fm=EE12496&ty=VOP
  • Anti-corruption

    Commitment

    1. Does the company have an anti-corruption compliance programme?

    2021
    Optional comment
    Principal has policies and procedures in place to support its anti-corruption program. Refer to our Anti-Bribery and Corruption Policy, available on our website: https://www.principal.com/about-us/our-company/policies/anti-bribery-and-corruption-policy. A formalized annual enterprise risk assessment of Anti-bribery and corruption is performed. The Compliance Committee oversees the risk assessment, evaluating controls, consulting, and reporting to senior management and the board of directors regarding anti-bribery and corruption (AB&C) risks. Program risk is evaluated annually and was last completed in 2021. The Principal Anti-Bribery and Corruption Policy was last updated in 2021 and is reviewed biennially.

    2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?

    Optional comment
    We have stand-alone policies on Anti-bribery and corruption, Conflicts of Interest, Gifts and Entertainment, and Political Activity. Employees and representatives should seek clarification on any questions or concerns regarding activities under consideration or the interpretation of any law. If employees are offered a bribe from a person or entity doing business with or seeking to do business with Principal, they are instructed to report it immediately to their business area’s compliance director/legal contact. If an employee or representative is offered something of value and is uncertain if they are allowed to accept it, the employee or representative is instructed to refer to the gift & entertainment policy and standards applicable for their specific location, or to check with their leader or their business area’s compliance director/legal contact. Concerns can be reported by using the Ethics Hotline or online reporting form, which is available on the company intranet and website. An anonymous reporting option is available through these reporting methods. Our whistleblower policy protects employees and representatives who report concerns in good faith. Refer to our Anti-Bribery and Corruption Policy, available on our website: https://www.principal.com/about-us/our-company/policies/anti-bribery-and-corruption-policy

    Prevention

    3. Who receives training on anti-corruption and integrity?

    Optional comment
    Bribery and corruption are not only against our company values. They’re illegal and can expose both our employees and our company to fines, penalties, and reputational damage. To ensure our employees stay vigilant, they receive annual training on the Global Code of Conduct (the “Code”) which is the foundation for ethical behavior (including integrity) and business conduct. Ethics and integrity are central to who we are. Our core values (among them, “Do what’s right”) serve as the foundation for ethical decision-making across the company. Every director and employee of Principal, regardless of function, position, or location is accountable for following the Code. When completing the annual Code training, all employees certify that they have read the Code and agree to abide by it. Annual anti-bribery and corruption training is required of targeted employee audiences and can be in the form of a computer-based training course or in person training. In 2021, all Principal International employees were required to complete in person training on anti-bribery and corruption. As part of the annual Code training, the topic of Anti-bribery and corruption is a targeted topic every third year for all employees. This topic was last covered in 2020 Code training and will next be in the 2023 training. Additionally, the policy is updated on a biennial basis. As the policy is updated information is conveyed in the CECI Alert (newsletter) and the updated policy is referenced within employee training. Plans are underway for an article on the company’s intranet site ahead of the training. Principal believes that all business decisions should be made objectively and in the best interests of our company, including impacts to our stakeholders. If our employees or business partners need to report concerns about unethical or fraudulent activity pertaining to Principal, they can submit a report through the Ethics Hotline by phone (U.S. only) or submit an online reporting form. Both offer anonymous options. Reported concerns go directly to a third party not affiliated with Principal.

    3.1. How often is such training provided?

    One time only

    Every year

    Every two or more years

    We do not collect this data

    All employees

    Select employees

    Contractors

    Direct suppliers of the organization

    Other – such as partners, clients, etc.

    Indirect suppliers of the organization

    Optional comment
    To ensure our employees stay vigilant, they receive annual training on the Global Code of Conduct (the “Code”) which is the foundation for ethical behavior (including integrity) and business conduct. Annual anti-bribery and corruption training is required of targeted employee audiences and can be in the form of a computer-based training course or in person training. In 2021, all Principal International employees were required to complete in person training on anti-bribery and corruption. Depending on their role with the company, certain contractors in Principal International locations do receive annual anti-bribery and corruption training as part of the targeted audience. As part of the annual Code training, the topic of Anti-bribery and corruption is included every third year for all employees. This topic was last covered in 2020 Code training and will next be in the 2023 training. Additionally, the policy is updated on a biennial basis. As the policy is updated information is conveyed in the CEC Alert (newsletter) and the updated policy is referenced within employee training. Plans are underway for an article on the company’s intranet site ahead of the training.

    4. Does the company monitor its anti-corruption compliance programme?

    Frequency of Review - The overall compliance program is evaluated on an annual basis. Evaluation of the Company’s Anti-Bribery and Corruption Program includes the following: • Maintaining full support and commitment to the program and related compliance initiatives from the Board and senior management. • Conducing periodic bribery risk assessments to ensure control effectiveness. • Ensuring that changes to processes and controls are implemented if weaknesses are identified in risk assessments. • Maintaining a formal policy prohibiting bribery globally and policies and procedures on gifts, entertainment, travel, and personal political contributions. • Providing employee training, including high-level anti-bribery awareness for all employees and specific training for employees in higher-risk roles. • Maintaining an ethics hotline for reporting concerns of suspected fraudulent or unethical activities. • Performing due diligence associated with business partners and acquisition targets. • Regular reviews by Internal Audit. • Obtaining annual certifications from key employees in all jurisdictions certifying to their compliance with the Anti-Bribery & Corruption Policy. • Monitoring regulatory framework, new anti-bribery and corruption laws, and enforcement activity.

    Response and Reporting

    5. Please report the company's total number and nature of incidents of corruption during the reporting year.

    Number of incident(s)

    Unknown

    Choose to not disclose

    Confirmed during the current year, but related to previous years

    0
    N/A - no reported incidents in 2021

    Confirmed during the current year, and related to this year

    0
    N/A - no reported incidents in 2021
    Optional comment
    In 2021, no founded/credible charges were reported through the Ethics Hotline or filed by any regulator against the enterprise of Principal for bribery or corruption.

    6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?

    Optional comment
    In 2021, no founded/credible charges were reported through the Ethics Hotline or filed by any regulator against the enterprise of Principal for bribery or corruption.

    7. Does your company engage in Collective Action against corruption?

    Optional comment
    We are not currently engaged or actively participate in Collective Action against corruption within our Corporate Ethics unit.

    8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.

    We continue to monitor and review systems and controls for improvements to help prevent bribery or corruption events from occurring. We continually enhance employee computer-based and live training to ensure employee awareness and understanding of related key topics.