Principal Financial Group 2023 Sustainability Report: Our Global Sustainable Investment Products
Advancing inclusive products & services
Originally published in Principal Financial Group 2023 Sustainability Report
Our global sustainable investment products
We are seeing institutional investors around the world become more interested in sustainable investment products —and we’re responding.
Our approach
As a global asset manager, we have focused on converting and launching new funds that comply with greater expectations of sustainability standards from regulators and clients alike.
Our actions and performance in 2023
In 2023, we launched two new products and converted two existing products to Article 8 status under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
As of December 31, 2023, Article 8/9 assets under management totaled $7.18 billion.1 In 2024, we’re planning to launch or convert additional funds as Article 8 or 9 under the SFDR classification framework.
Additionally, we launched four new products, three we consider to have enhanced ESG integration features and one thematic strategy.
We’ve launched products in 2023 that help us meet our client’s preferences.
In partnership with China Construction Bank (CCB), we’ve launched the CCB Principal China New Energy Innovation Fund. This fund offers offshore investors access to A-share listed companies related to the new energy industries, including renewable power, electrical equipment, energy storage, and electric vehicles. The fund will utilize locally based thematic equity investing insights in mainland China, which focuses on both top-down factors, such as industry policy and supply-and-demand trends, and bottom-up fundamentals. A proprietary ESG approach with a locally developed stock scorecard is integrated throughout the investment process to ensure stocks meet sustainability standards.
The Principal Sustainable Asia Equity Income Fund in Hong Kong invests more than 70% of the fund’s net asset value in top performing ESG rated companies within Asia Pacific (ex-Japan). In addition to investing in best in class ESG performers, the fund also has an exclusionary policy (tobacco, casinos and gaming, and controversial weapons and will also exclude companies deemed to have governance concerns).
The Thai ESG Fund aims to promote long-term savings and to increase local investments into Thai businesses with ESG characteristics. In November 2023, the Thai Ministry of Finance approved a tax saving scheme that provides a 30% tax incentive for individuals utilizing ESG labeled products. This type of innovative product encourages sustainable investing and will promote sustainable development in Thailand, which is needed for the country to achieve Sustainable Development Goals in 2030.
As of 2023, we offer four thematic products and one impact strategy.
What’s next
We continue to work with our clients to determine the right types of sustainable investment strategies that meet their needs. We are presently seeing interest in sustainable food, biodiversity, climate transition, responsible equity, and real estate decarbonization.
Principal Asset ManagementSM was named a Best Place to Work in Money Management for the 12th consecutive year
Pensions and Investments
(December 2023)
To learn more, read the Principal Financial Group 2023 Sustainability Report.
Principal Asset ManagementSM is a trade name of Principal Global Investors LLC.
Integration of sustainability considerations and/or environmental, social and governance (ESG) factors is qualitative and subjective by nature. There is no guarantee that the criteria used, or judgment exercised, will reflect the beliefs or values of any particular investor. There is no assurance that any strategy or integration of sustainability considerations and/or ESG factors will be successful or profitable.
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392.
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