Principal Financial Group®: Improving Operational Environmental Performance

Originally published in Principal Financial Group 2024 Sustainability Report

Improving operational environmental performance

We remain committed to integrating responsible energy, water, and waste management practices into our business operations through efficient and sustainable solutions and improvements.

Our approach

Energy-efficient technologies and access to renewable energy sources help us meet our broader goals and further reduce our impact on the environment.

We’re mindful of our water consumption and recycling efforts. We’ve formulated action plans to improve our performance.

We’ve also established a system and policy modeled after ISO14001 and designed to:

• Reduce energy use and GHG emissions
• Improve water efficiency
• Reduce waste to landfill
• Increase employee awareness

We don’t consume significant amounts of energy and water or produce significant amounts of waste. But we’ll continue to routinely measure these areas of our operations to better understand our impact on the environment.

Our actions and performance in 2024

Energy consumption and renewable energy¹

From 2023 to 2024, we reduced energy consumption by 19.2% globally and by 19.6% in the U.S.

On a global level, 41.3% of energy came from renewable sources in 2024.

In the U.S., approximately 47.6% of total energy consumption came from renewable sources—a total of 25,986.7MWh (or megawatt-hour).

We continue to try and find optimizations to operate our offices more efficiently. In 2024, we optimized lighting and heating schedules and completed a LED lighting retrofit for a parking lot that contributed to reductions.

Additionally, warmer weather in 2024 reduced the amount of heating days, particularly at our headquarters in Des Moines, Iowa.

Of total U.S. energy usage, 57.2% came from electricity, and approximately 83.1% of electricity consumption came from renewable sources. We continue to benefit from our Des Moines utility provider providing a significant amount of energy from renewable sources and therefore our renewable energy use each year is influenced by their annual production.

Water consumption²

We incorporate responsible water management practices to meet or exceed Leadership in Energy and Environmental Design (LEED®) guidelines for water efficiency. We put water reduction measures in place wherever possible. Compared to 2023, we saw a 16.4% decrease in water consumption in 2024. Overall, in the last five years we’ve decreased our water consumption by 46.3%. This reduction can be attributed to an increase in rainfall amount in 2024 in Iowa where our headquarters are located, resulting in a decreased need for irrigation on campus. We also sold two properties we’ve historically occupied and no longer have operational control, which has reduced our usage as well.

• 47.6% of total energy consumption in the U.S. in 2024 from renewable sources
• 83.1% of electricity consumption in the U.S. in 2024 from renewable sources
• 16.4% decrease in water consumption between 2023 and 2024

Waste and recycling³

In 2024, we diverted 69.9% of hazardous and nonhazardous waste produced in U.S. facilities where we measure recycling, donating, and composting efforts, with 100.0% of our hazardous waste being recycled. We continue to make incremental changes in our offices to reduce waste, such as an increase in signage to help employee awareness and education around appropriate waste practices, employee- led environmental initiatives, and a composting program for food service.

This year we also completed a large donation of steel workstation panels, some of which were able to be recycled and contributed to our overall total.

At the end of 2023, we launched a K-Cup recycling program. For the first full year of the program in 2024, Principal successfully diverted 0.8 metric tons of used coffee pods through recycling, and diverted 2.3 tons of used coffee grounds via composting.

Principal® has committed to meet or exceed LEED® guidelines for waste and recycling. Our goal is to maintain a 50% or greater waste diversion rate annually.

In 2024, Principal has increased our average in office occupancy by about 50%. However, even with this increase, we are proud of our efforts to continue to reduce water usage and continue to divert waste in our offices.

Green buildings

We use LEED® certification to ensure efficient and healthy work environments.

Of the Principal owned and occupied portfolio in Des Moines, 89.6% is LEED® certified, as measured by square footage.

We sold one of our LEED certified properties in 2024 and therefore expect our LEED portfolio percentage to decrease next year.

Read more in our Environmental commitment

What’s next

In 2025, we will focus on improvements in operational efficiency to reduce fuel usage, particularly at our buildings with the highest production of gas emissions.

We will continue to make operational adjustments such as optimizing lighting using LED replacements and scheduling/installing sensors to thermostats and lighting controls which will further reduce usage.

We also launched an innovative pilot project at the end of 2024 called Endotherm. In 2025, we will be studying the efficacy of this product and exploring the potential for expansion. The goal is that the Endotherm additive will help our boiler operate over 10% more efficiently, decreasing demand on our natural gas powered water heater that produces warm air at one of our headquarter buildings.

Additionally, we’ll work to increase data accuracy through improved collection, smart metering projects, and added quality control methodologies to inform evaluation of our reduction strategies and key areas to address for future reductions.

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.

¹2024 greenhouse gas emissions and energy consumption values will be verified in Q2 2025, and final figures will be disclosed in the 2025 CDP Climate Questionnaire.

²Waste and water data represent select U.S. offices only.

³Waste and water data represent select U.S. offices only.