Principal Financial Group®: Our Global Sustainable Investment Products
Originally published in Principal Financial Group 2024 Sustainability Report
Our global sustainable investment products
We’re 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’ve focused on converting and launching new funds for clients whom sustainability is a key consideration and to comply with greater expectations of sustainability standards from regulators.
Our actions and performance in 2024
In 2024, we launched six new sustainable investing products, three we consider to have enhanced ESG integration features and three thematic strategies.
Of the six new products launched, two are Article 8 products under the EU’s Sustainable Finance Disclosure Regulation (SFDR). We also converted four existing products to Article 8 status and one existing product to Article 9 status under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
We’ve launched products in 2024 that help us meet our clients’ preferences.
- Spectrum Asset Management launched two SFDR Article 8 UCITS Funds, Principal High Grade Capital Securities Fund and Principal Capital Securities Fund, expanding our ESG Integration Enhanced Features product offering. Both of these funds consider greenhouse gas emissions reduction and transitioning to renewable sources of power. They exclude companies with significant revenue derived from the production of thermal coal and direct producers of controversial chemicals such as herbicides and pesticides deemed as health hazards.
- In Malaysia, we launched the Principal Sustainable Conservative Bond Fund, which focuses on reducing carbon emissions by investing in a portfolio of low carbon intensity bonds, helping foster the transition to a net zero carbon economy in the long run. We’ve classified this fund as ESG Integration Enhanced Features.
- The Global Climate and Environment strategy is a thematic product that invests in companies with net zero ambitions and a focus on decoupling economic growth from environmental degradation.
- There are large and long-term structural investment opportunities that come from the transition, with innovations in green hydrogen, energy efficiency improvements, and deployment of renewable energy. Companies that will deliver these solutions are set to gain material opportunities to create value over the coming decades.
- The Global Sustainable Food and Biodiversity Fund is an SFDR Article 9 thematic fund that invests in equity securities of companies that deliver the solutions to feeding the world sustainably. It aligns with Sustainable Development Goals (SDGs) focused on responsible consumption and production (SDG 12), good health and well-being (SDG 3), contributing to improved nutrition, reduced hunger (SDG 2) and clean water and sanitation (SDG 6), largely through irrigation.
As of the end of 2024, we offer 28 ESG Integration Enhanced Features strategies and six Thematic strategies.
As of December 31, 2024, Article 8/9 assets under the EU’s Sustainable Finance Disclosure Regulation (SFDR) totaled $17.63 billion.1
What’s next
As global regulations continue to focus on climate disclosures, we’ll keep our pulse on products that aim to mitigate and adapt to our changing climate. Energy and infrastructure resilience are key contributors to a low carbon transition. They also positively contribute to national security, a politically neutral theme to consider in this increasingly polarized political landscape. Aligned to the growing requirements of our clients, we continue to ideate on additional development of products with sustainability characteristics, especially in Europe and Asia.
Principal Asset Management was named a Best Place to Work in Money Management for the 13th consecutive year by Pensions & Investments (December 2024).2
To learn more, read the Principal Financial Group 2024 Sustainability Report.
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.
1AUM representative of Principal Asset Management - Investment Management as of December 31, 2024. Principal Asset ManagementSM is the trade name of Principal Global Investors, LLC.
2The firm paid an application fee to be considered for the award.
