2015 Corporate Social Responsibility Report
What’s next.
Table of Contents
Message from Chairman,
A
President and CEO Daniel J. Houston
3
Community Investment
4
Giving4
Community sponsorship 6
Matching gifts 7
Employee volunteerism 9
Environmental Sustainability
Highlights from 2015
Our results
10
10
11
Employee Well-Being
Building a connected community
12
13
Governance
14
About Principal
14
2015 Corporate Social Responsibility Report | page 01
2
A Message from
Chairman, President
and CEO
Daniel J. Houston
At Principal, we come to work each day with one purpose: to help people make
progress toward their financial goals, preparing for tomorrow without sacrificing
the things that matter today.
Our desire to help people extends beyond our customers. We’re also focused on improving the lives of our
employees, the communities we live and work in and the environment we all depend on.
Because of our focus on progress, we’re always looking to the future, asking ourselves, “What’s next?” As a socially
responsible company, that means we’re continually asking:
• How can we continue to strengthen our communities?
• How can we become an even better place to work for current and future employees?
• What more can we do to protect the environment?
In this report, we highlight some of the ways we’ve shaped improvements in those key areas in 2015, including:
Community investment
• Giving generously around the globe, with a focus on increasing financial security
• Sponsoring events that make a meaningful difference for our communities
• Matching employee donations to United Way (including a record-breaking campaign in 2015) and educationrelated institutions
• Encouraging employees to get involved in volunteer work, and giving them time off to do it
Environmental sustainability
• Our commitment to conserving resources, recycling and other sustainability initiatives has made us a
climate leader
Employee well-being
• Our redesigned work environment, wellness programs and diversity initiatives have earned us a reputation as a
great place to work
I’m proud to share this report with you. Not only because it summarizes highlights from a fruitful 2015 – but
because it offers a look ahead at what we plan to do to help people live their best lives.
Our employees deserve the credit for leading, managing and participating in these initiatives. It’s my privilege
to work alongside these generous and talented people each day. And, as you’ll see in our governance section,
they have support from the highest levels of our company. This shared commitment to helping others unites and
inspires all of us.
Daniel J. Houston , Chairman, President and CEO
2015 Corporate Social Responsibility Report | page 01
3
Community Investment
We spend our days working to invest our customers’ money wisely. And so it’s natural
that we want to make smart investments in our communities, too. We do this in a
variety of ways.
Giving
In 2015 alone, we gave more than $13.6 million to over 700 organizations through grants and matching gifts. These
organizations serve a variety of needs, including:
• Civic and community projects
• Education
• Support for the environment
• Arts and culture
• Health and human services
• Disaster relief
Giving without borders
Last year, as part of our international grants program, we donated to local charities in 13 countries – partnering
with our Principal International and Principal Global Investors offices.
These grants focused on building financial security and addressing critical local community needs.
Financial Security –
providing financial education and
awareness for youths, adults and
families.
Critical Local Community Needs –
strengthening communities through
supporting critical local community
needs such as funding education and
helping people become more
self-sufficient.
United States
Principal Global Investors also
partners with EMpower –
an international organization that
works to empower people within
emerging markets. Programs support
youth education, financial security and
job development.
Great Britain
Mexico
Japan
China
Hong Kong
Brazil
Dubai
India
Chile
2015 Corporate Social Responsibility Report | page 01
4
South
Africa
Australia
Singapore
Given our business, financial security is an area of particular interest. Two examples of
our commitment include:
Preparing young people to succeed
in a global economy
Enriching the education of future
financial planners
For nearly a century Junior Achievement (JA) has been
California State University in Sacramento is a top
educating young people about business, economics
school for financial planners, and it’s close to our
and free enterprise. We share their passion for helping
Principal Funds office in Folsom, Calif., so partnering
young people develop financial security, and we love
with them to promote financial security was a
their focus on succeeding in a global economy.
natural fit.
Our charitable investment in JA dates back half a
Our relationship with the school began in 2010, when
century in Des Moines, where we’re headquartered.
we sponsored four $2,500 scholarships for students
We’ve had employees serve on the board of directors
participating in the Professional Financial Planning
and volunteer their expertise. And our Foundation has
track. Since then, our relationship has deepened.
made significant investments in remodeling portions of
the Central Iowa Biztown space. The Biztown program
combines in-class learning with a day-long visit to a
fully interactive, simulated town. This helps students
connect the dots between what they learn in school and
For example, employees from our Folsom office
worked with university officials to develop a Certified
Financial Planner (CFP) endorsement program and
curriculum.
their successful participation in a worldwide economy.
Our employees also helped by volunteering to
We also provide financial and volunteer support to JA
speak at courses that cover investments, portfolio
branches in Grand Island, Neb., and Wilmington, Del.,
management, retirement plans, and insurance and
where we have a significant employee presence.
risk management. They also share what it’s like to be a
More recently, our partnership with JA expanded
financial planner.
globally through Claritas, a member company in
In 2015, we sponsored and bought a Bloomberg
Brazil. Claritas executives will be donating their time
terminal for the students in the program and their
and use their market experience and knowledge to
investment club. The terminal allows members to
teach students the importance of financial security.
manage real money for the college foundation. Our
These programs, made possible through our financial
involvement in the college program has turned out
support, teach practical financial lessons and
to be an excellent recruiting tool for Principal. It’s a
encourage students to think like entrepreneurs, giving
partnership that’s good for students, Principal and
them confidence to dream and succeed.
many who work with financial planners.
Grants - 2015
Arts and Culture
6.4%
Education
7.8%
Disaster Relief
2.2%
Civic, Community and Environment**
43.3%
Health and Social Services*
40.2%
* Health and Social Services includes our match giving contributions to United Way through our corporate workplace giving campaign.
** Civic, Community and Environment includes major community sponsorships supporting economic development and building strong
communities such as the Principal Charity Classic and the Iowa State Fair. These two events generate an estimated economic impact of
$88 million, according to studies by Iowa State University and Genesis Insights.
2015 Corporate Social Responsibility Report | page 01
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Community sponsorships
Principal Charity Classic
You could say we do it all “fore the kids.” That’s because every year since
2007, The Principal Charity Classic has been bringing hope to children in
Central Iowa.
Tournament Charity
Partners
Part of the PGA TOUR’s Champions Tour, in
2015, Principal Charity Classic generated:
A record $1.4 million
2007
2008
2009
2010
2011
2012
2013
2014
2015
And over the nine years of our sponsorship,
contributions have totaled more than
$7.7 million
As shown in the graphic above, the Principal Charity Classic has generated
more than $7.7 million since it began in 2007.
Donations from the tournament were distributed to five Tournament
Charity Partners charities, as well as more than 100 Birdies for Charity
organizations. The five Tournament Charity Partners charities are:
• Blank Children’s Hospital
• BRAVO Greater Des Moines
• The Community Foundation of Greater Des Moines (tournament host
organization)
• United Way of Central Iowa
• Variety — the Children’s Charity of Iowa
The kids aren’t the only ones who benefit. The PGA TOUR and an
Iowa State University study estimated the tournament generates an
economic impact of $23 million annually for Central Iowa, including
increased business for hotels, restaurants, shopping establishments and
entertainment venues.
2015 Corporate Social Responsibility Report | page 01
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PANTONE solid uncoated 032U
K 100%
Matching gifts
There’s a truly generous spirit alive among our employees. We
encourage that by contributing to the organizations they choose to
support. We do this in two ways:
1.
|
A dollar-for-dollar match
2.
| A
n educational matching
for our annual United Way
gift program – supporting
campaign
both K-12 schools and
institutions of higher
“
learning
K
nowing that Principal
is willing to match the
contributions of its
employees speaks to its
commitment to service
United Way
and the betterment of
The 2015 United Way campaign was our biggest ever:
society. It’s important
• Our U.S. employees, advisors and retirees pledged $3.85+ million.
to me because of the
• Combined with our dollar-for-dollar match, the total impact was
impact it makes in our
$7.7+ million, directed to more than 230 United Way chapters, the
communities, not only
largest contribution in company history. And 2015 was our third
in Des Moines, but
straight record-breaking year.
the median percentage for workplace giving campaigns.
75% of employees
pledged
This pledge rate is more than double
the median percentage of employees
who participate in workplace giving
campaigns, according to the 2015
CECP (Committee Encouraging
Corporate Philanthropy) report. The
dollar-for-dollar match is a major
factor in why employees donate.
We are one of only 25 companies to receive United Way of America’s
Spirit of America award for corporate community involvement.
2015 Corporate Social Responsibility Report | page 01
7
”
throughout the U.S.
• As shown in the graphic below, our pledge rate is more than double
Ryan Fick, a senior high
yield analyst in our Principal
Global Investors division
Educational matching gifts
We also match employee gifts to education. In 2015 we supported a total of 260 organizations through
this program.
Colleges and universities:
We match qualified gifts from eligible
employees, retirees and advisors to eligible
colleges and universities.
Kindergarten – 12th grade:
We match qualified personal gifts made to
eligible K-12 public or private education
foundations (including Dollars for Scholars) by
eligible employees, retirees and advisors.
$3,000
Up
to $3,000
per calendar
year
We match qualified gifts
per calendar year
We match qualified personal gifts
Up to $500
per calendar year
Matching gifts Down Under
Our office in Sydney, Australia, offered a matching
gift program for employees, benefiting Youth Off
the Streets. Employees worked together to select an
organization to sponsor and appreciated what Youth
Off the Streets was doing for teenagers and young
adults going through tough times.
Through a challenge grant from the Principal
Foundation, totaling around $A5,500, the office
matched employee contributions. They also raised
funds at office events like food days. They put those
funds to work at Youth Off the Streets, and were able to
witness the benefit first-hand as many also volunteered
on site.
Teams have cooked dinner at one of the organization’s
small residential houses. And one team went on a night
outreach drive with a social worker who checks up on
homeless kids, taking them back to their facilities if
they have no place to go. Experiences like these have
inspired even more giving.
2015 Corporate Social Responsibility Report | page 01
8
Employee volunteerism
2015 highlights include:
Our employee volunteer group, Principal Volunteer Network (PVN), is
the oldest corporate volunteer program in Iowa. Only a handful of our
15,000 employees—those who have been here 44 years or more (yes,
there are a few!)—have known a work environment without a formal
volunteer program. It’s quite simply a part of our culture. In 2015
PVN helped organize 21 Day of Action projects, with more than 700
total participants. (See two examples at right.)
Building and revitalizing
To encourage volunteerism, we offer each employee eight hours of
homes – 2015 was the
Volunteer Time Off (VTO) annually to use as they choose, plus four
fourth year of a five-year
more hours for a United Way project.
commitment. Each of the past
four years, 400 volunteers
donated more than 1,000
In 2015
hours to build Habitat homes
That equals
one person
3,500
employees
volunteering
full-time more
than 10 years!
used more than
22,650 hours
of VTO.
and participate in neighbor
revitalization events like
“Rock The Block.”
What’s next
“
We’re proud of how our
Literacy kits – More than 200
employees contribute their time,
of our employees assembled
talents and money to help people
live their best lives. In fact, their
giving in 2015 resulted in our
third consecutive year of record-
literacy kits as part of a
United Way Day of Action
project. The kits provide early
learning centers and in-home
childcare providers with
breaking employee match giving.
materials that help prepare
Going forward, we’ll focus our efforts on expanding
children to read.
employee programs and our giving around the
”
globe to help others achieve financial security and
strengthen their communities.
G
eorgia Van Gundy, assistant vice president, community and
government relations
2015 Corporate Social Responsibility Report | page 01
9
Environmental sustainability
Part of our asset management
strategy is to invest in commercial
real estate properties. In 2015,
An important part of helping people live their best
lives is ensuring they have a healthy world to live
in. That’s why we place significant emphasis on
protecting the environment… it’s good for us and for
future generations.
In recent years we’ve taken significant steps to reduce carbon
Principal Real Estate Investors,
our dedicated commercial real
estate group, continued to grow
and demonstrate success within
its Pillars of Responsible Property
Investing (PRPI) initiative.
emissions, waste and energy usage — in the process becoming a
Key accomplishments were:
climate leader. We also get employees involved in these efforts.
Reducing energy usage
Further reducing energy usage by
Highlights from 2015
3.9 percent, resulting in over 11,000
We were named a CDP Climate Leader…again. We are one of only
gas emissions
27 S&P 500 companies named to both 2015 Climate Leader Indices
Increasing green building
by environmental non-profit CDP. The indices spotlight companies for their
actions to reduce carbon emissions and mitigate the business risks of
metric tons of avoided greenhouse
certifications
Increasing LEED and ENERGY STAR®
climate change. You can find details about this recognition on principal.com.
certified buildings in our office
We continued to make good progress toward our climate change
portfolio to 76 percent
goals. In 2012, we set a long-term goal to reduce our energy use and
Performance band score of “A”
carbon footprint by 10 percent by the end of 2016. (We used 2011 as
Receiving a performance band score
our baseline.) To date, we’ve already bested our goals by more than
of “A” by earning 47 out of 51 points
double — reducing Scope 1 and Scope 2 carbon emissions by more
in the United Nations Principles of
than 21 percent and energy consumption (electricity and natural gas)
Responsible Investment (2015)1
by 22 percent.
Green Star designation
We renovated our campus with the environment in mind.
Earning the Green Star designation
Sustainability has been top-of-mind for us throughout the multi-year,
from the Global Real Estate
$400 million renovation of our headquarters, which began in 2013. To
Sustainability Benchmark Survey2
date, we’ve recycled more than 90 percent of the materials removed —
metals, carpet, drywall, furniture, etc., which exceeds the LEED® guidelines
target of 70 percent for construction waste. Also, the renovated buildings
will have more efficient HVAC systems, 100 percent LED lighting and
eco-friendly paint, furniture, wood and carpet wherever possible.
We recycled. A lot. Our recycling program includes new waste
ENERGY STAR Partner of the Year
Recognizing the integration of
ENERGY STAR as a key component
of the PRPI initiative to help improve
energy efficiency of U.S. buildings3
containers throughout our headquarters, along with efforts to reduce
the waste we produce and send to the landfill. We’re currently keeping
roughly 70 percent of our ongoing waste out of landfills.
Our employee “Green Team” inspired others to take action. A team
formed in 2015 sponsored several events, including:
• Two office supply giveaways – Employees took home old office
supplies for free, meaning an estimated 5,000 pounds of supplies
were reused or upcycled.
• A personal paper shredding day – Employees were able to securely
shred/recycle personal papers brought from home.
2015 Corporate Social Responsibility Report | page 10
01
eleased July 2015. For further details
R
please refer to the PRI Assessment
Methodology, Principal Global
Investors full Assessment Report and
Transparency Report, all of which are
available upon request.
2
2015 Global Real Estate Sustainability
Benchmark (GRESB) survey, GRESB
Foundation, data as of Dec. 31, 2014.
3
March 28, 2016, U.S. Environmental
Protection Agency.
1
24%
18%
Our results
12%
To help measure our company’s overall progress toward environmental goals, we established 2011 as our baseline.
Take a look at our progress in the charts below.
6%
0%
2012
2013
2014
2015
2013
2014
2015
Energy Reduction Goal Tracking
Carbon Emissions Reduction Goal Tracking
24%
24%
Goal
18%
18%
12%
12%
6%
6%
0%
2012
2013
2014
2015
Goal
0%
2012
24%
To see more detailed results on our progress, please see the Environmental section of our website.
18%
Energy Consumption
12%
2012
2013
2014
2015
81,001
78,664
77,129
69,278
552,261
531,225
659,356
568,243
2011
2012
2013
2014
2015
Scope 1 (mtCO2e)
5,413.05
6,101.43
5,751.48
6,374.36
6,216.46
Scope 2 (mtCO2e)
63,509.33
56,769.22
55,131.81
53,994.81
48,424.80
2011
(baseline)
6%
Electricity (MWh)
0%
2012
90,618
2013
Natural Gas (therms)
2014
556,131
2015
Carbon Emissions
(baseline)
What’s next
“
We’re proud of the great progress we’ve made in our sustainability
efforts by significantly reducing carbon emissions and energy
consumption, increasing recycling efforts and encouraging and
supporting our employees to work together to address environmental
and sustainability efforts. We look forward to continuing our
sustainability leadership by setting a new long-term goal for further
”
emission reductions and pursuing LEED certifications for our
renovated downtown campus buildings.
Teri Button, vice president of corporate real estate and aviation
2015 Corporate Social Responsibility Report | page 11
01
Employee well-being
The way we work. The type of work we do. The
location of the people we work with around the
globe. These factors and our desire to provide an
environment that better supports employees’ wellbeing encouraged us to take a fresh look at our
workspace design.
That’s why, when we began our multi-year, $400 million dollar
renovation of our headquarters in Des Moines, Iowa, we wanted to
create an adaptable work environment to fit the rapidly changing way
we work. And an environment that would better support employees’
The renovated workspaces build
upon our company’s reputation
for encouraging well-being and
flexibility, which is provided
through a variety of benefits
such as:
• Flexible work arrangements
• Paid parental leave
• Onsite wellness centers or
reimbursements
• Onsite financial education and
advising
• Personal Time Off
• Volunteer Time Off
• Personal leave
well-being.
While our renovations are still in progress, we completed the first
building in 2015, and feedback from employees using the renovated
areas has been incredibly positive – overall satisfaction with their
workspace jumped 36 percent after moving into renovated space.
Polly Heinen, assistant director
of benefits at Principal says,
Key changes included:
• Boosting access to natural light by moving offices and conference
“
All of these things help
our employees balance
the demands of work and
life in a way that best fits
their needs. Well-being
rooms to the core of our buildings so all employees could benefit
definitely isn’t ‘one-size-
from a brighter, more energetic workspace.
fits-all.’ People experience
• Adding areas like kitchenettes, art galleries, drop-in rooms
different needs at different
and flexible workspace that give people a choice in finding an
points of their lives and
environment that helps them do their best work. Another bonus?
careers. That’s why we
These areas encourage connecting and collaborating with others.
• Providing sit-to-stand workstations for all employees, and piloting
onsite treadmill walk stations to increase movement throughout
the day.
2015 Corporate Social Responsibility Report | page 12
01
provide a wide variety of
programs to meet people
where they are – so we
can help ensure they’ll
thrive both personally and
professionally.
”
Building a connected community
We also promote well-being by celebrating differences and inspiring a sense of community. Many employees,
including several of our senior leaders, participate in our very active Employee Resource Groups and Women’s
Networks. Participation is often touted as a key leadership and development opportunity, and our top leaders
annually award participants for sharing their unique gifts.
Employee Resource Groups and Women’s Networks
African American/Black
Asian
Gay/Lesbian/Bisexual/
Transgender/Ally
Hispanic/Latino
New Employees
OneAbility
Veterans
Women’s Network for
Leaders
Women in Sales
Women in Technology
Our Diversity Council, created in 2012, consist of 15 business leaders from across Principal. The council reports to
our Board of Directors and works to develop relationships among business unit leadership and Human Resources
Recruiting and Diversity.
Some of the recent recognition we’ve received for an outstanding workplace
Best Places to Work in
Money Management
Pensions & Investments’
4th year in the top spot
Ethisphere’s World’s
Most Ethical
Companies
5th year receiving this
award
Forbes list of America’s
Best Employers
# 63 out of 500
WorldatWork WorkLife 2016 Seal of
Distinction
Demonstrating
leadership in workplace
strategies that help
employees with personal
work-life balance
Working Mother 100
Best Companies
13th year receiving this
award
NAFE’s Top Companies
for Executive Women
13th year receiving this
award
America’s top companies for lesbian, gay, bisexual
and transgender (LGBT) equality
100 percent score in the 2016 Human Rights
Campaign’s Corporate Equality Index
These are just a few examples. You can find more recognition on principal.com, including a detailed list of our
sustainability awards and workplace awards.
What’s next
“
We’ve been committed to employee health and wellness for many
years. Our first building completed in 1940 had a gymnasium! And our
commitment to helping employees be their best will continue to evolve
along with other changes at our company.
Our future plans include going beyond the traditional health and wellness
programs to combine our offerings into a total well-being approach. We’ll
continue to improve our programs that promote physical, financial and
Polly Heinen, assistant
director of benefits
”
social/emotional well-being. And we’ll continue to encourage cultural and
physical work environment changes that support well-being, too.
2015 Corporate Social Responsibility Report | page 13
01
Governance
Our commitment to corporate social responsibility
reaches the top of our organization.
About Principal
We help people and companies
Our Board of Directors, specifically the Nominating and Governance
around the world build,
committee, oversees both our company’s corporate social
protect and advance their
responsibility and environmental sustainability efforts.
financial well-being through
In addition, our Foundation Board provides oversight for the Principal
Financial Group Foundation. And our Good Works Committees
determine how to distribute corporate and Foundation funds.
Principal Financial Group Foundation directors
retirement, insurance and
asset management solutions
that fit their lives. Our 15,000
employees, working in 18
countries around the globe,
are passionate about helping
1.
2.
3.
4.
5.
6.
7.
8.
Terry Lillis (chair), executive vice president and CFO
Pat Barry (secretary), counsel
Dan Houston, chairman, president and CEO
Karen Shaff, executive vice president, general counsel and
secretary
Nora Everett, president – retirement and income solutions
Beth Brady, senior vice president and CMO
Dennis Menken, senior vice president and CIO – Principal Life
Insurance Company
Georgia Van Gundy, assistant vice president – community and
government relations
Good Works Foundation Committee and Good Works
Contributions Committee members
1. G
eorgia Van Gundy (chair), assistant vice president –
community and government relations
2. Pat Barry (secretary), counsel
3. Mike Daugherty, vice president – client administration and
operations
4. Kerry Gumm, director – human resources recruiting and
diversity
5. Shelly Meighan, assistant vice president – business
development
6. Colin Pennycooke, counsel
7. Scott Ruba, director – retirement and income solutions
8. Mark Tezak, managing director – Principal Global Investors
strategy
2015 Corporate Social Responsibility Report | page 14
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clients of all income and
portfolio sizes achieve their
goals — offering innovative
ideas, investment expertise
and real-life solutions to make
financial progress possible.
2015 Corporate Social Responsibility Report | page 15
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