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Principal Financial Group® continues its commitment to sustainable finance with the release of its third Principal Sustainable Financing Report. This report highlights the allocation of proceeds from the company’s $600 million sustainability bond, issued in August 2021.
The bond underscores ongoing efforts to support environmentally and socially responsible investments while promoting transparency of sustainability efforts at Principal.
The proceeds from the sustainability bond were allocated to key initiatives that align with a commitment from Principal to advance sustainable operations and investments. Allocations include:
- 74% of the bond proceeds were allocated toward green buildings.
- 9% supported renewable energy projects.
- 17% contributed to affordable housing initiatives.
A breakdown of the allocation further reveals 76% of the proceeds were directed to existing assets, while 24% were used for new assets.
“This bond is an example of how we prioritize sustainable practices that benefit our clients and communities,” said Binay Chandgothia, managing director, portfolio management at Principal®. “With this report, we are proud to demonstrate our commitment to addressing global challenges and supporting initiatives that align with the U.N. Sustainable Development Goals (SDGs).”
Governance and Transparency
To ensure the integrity of the process for this sustainability bond and future bond issuances, Principal developed the Principal Sustainable Financing Framework (the Framework). Under the Framework, eligible assets must align with criteria that advance the U.N. SDGs. Additionally, only businesses with 90% or more of their revenue derived from SDG-aligned activities are eligible. Each year an independent Second-Party Opinion from Sustainalytics verifies that the Framework meets the highest standards for sustainability.
The five-year, $600 million sustainability bond was structured through Principal Life Global Funding II. BNP Paribas Securities Corp. served as the sole sustainability structuring agent, with BofA Securities, Inc. and HSBC Securities (USA) Inc. acting as joint book runners. The bond drew strong interest from over 60 investors, demonstrating the growing demand for sustainable investment opportunities.
In line with its commitment to transparency, Principal reengaged Sustainalytics—a qualified, independent external reviewer—to verify and provide limited assurance that the management of the bond’s proceeds aligns with the company’s Sustainable Financing Framework and that the selected assets meet defined sustainability criteria.
More information about how Principal is striving to advance sustainability initiatives is available at principal.com/sustainability
Sustainalytics is not an affiliate of any member company of the Principal Financial Group®
Sustainable bond offerings are typically limited to qualified institutional buyers (QIB’s) through applicable underwriter. May not be a suitable investment for QIB’s seeking exposure to green assets.
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 and plan administrative services provided through Principal Life Insurance Company, a member of the Principal Financial Group®, Des Moines, IA 50392.
© 2024 Principal Financial Services, Inc.
Principal®, Principal Financial Group®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and services marks of Principal Financial Services, Inc., in various countries around the world.
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