Principal Financial Group® has released its first Principal Sustainable Financing Report to highlight the proceeds allocated to eligible green and social assets from the issuance of the company’s $600 million sustainability bond in August 2021. The report details allocation and key performance indicators of the proceeds, which went toward initiatives such as green buildings, renewable energy, energy efficiency, and affordable housing.
The bond is one example of the company’s commitment to advancing Environmental, Social, and Governance (ESG) practices in its organization and operations – with a client-first focus central to how ESG factors are integrated across investment portfolios.
“Principal has embraced sustainability as a core strategy to help strengthen our business, advance our purpose, and build a more inclusive and resilient global community,” said Deanna Strable, executive vice president and chief financial officer for Principal®. “The issuance of a sustainability bond and our first annual Sustainable Financing Report is another example of our commitment to positive change in the areas where we believe we can have the greatest impact.”
To govern the process for this sustainability bond and future issues of green, social, and sustainability bonds, Principal created the Principal Sustainable Financing Framework (the “Framework”). According to the Framework, eligible assets may include existing or future investments that meet defined criteria to help advance the United Nations Sustainable Development Goals (U.N. SDGs). A business is only eligible if 90% or more of its revenue is derived from activities and criteria that align with U.N. SDGs. Principal obtained an independent Second-Party Opinion on its Sustainable Financing Framework. For more detail, see the Second-Party Opinion from Sustainalytics.
The sustainability bond was a five-year $600 million funding agreement-backed note (FABN) issued through Principal Life Global Funding II. BNP Paribas Securities Corp. served as the sole sustainability structuring agent and joint book runner with BofA Securities, Inc. and HSBC Securities (USA) Inc. for the sustainability bond, which drew the interest of over 60 investors.
In accordance with the company’s commitment to transparency, Principal reengaged Sustainalytics, a qualified, independent external reviewer, to verify and provide third-party, limited assurance with respect to the management of the Principal Sustainable Financing proceeds and compatibility of the selected Eligible Assets with the Principal Sustainable Financing Framework.