Principal Financial Group 2023 Sustainability Report: Supplier Diversity
Our work with diverse business partners
Originally published in Principal Financial Group 2023 Sustainability Report
Supplier diversity
Working with diverse suppliers, vendors, and business partners helps improve our competitive edge in the global marketplace and contributes to our strategic objectives.
Our approach
In all bidding opportunities we strive to consider businesses owned, controlled, and operated by diverse individuals, including women, people of color, veterans, members of the LGBTQ+ community, and individuals with different abilities. Our supplier diversity program provides criteria and eligibility requirements for diverse suppliers in the U.S. interested in doing business with us.
To create greater economic impact and growth opportunities for diverse suppliers, we aim to spend $100M with diverse suppliers in the U.S. by 2025. We measure progress toward this goal by setting annual targets. In 2023, our goal was to spend $53.2 million of eligible U.S. spend with diverse suppliers. Ultimately, we spent $42.1 million with diverse suppliers.
We were unable to fully meet our 2023 target spend goal due to unforeseen budget constraints and broader economic headwinds that changed our projected spend in areas of the business.
We will continue to refine how we utilize projections in areas of diverse spend to forecast appropriate eligible spend base to establish reasonable supplier diversity goals and look for opportunities to diversify our supplier portfolio.
Our actions and performance in 2023
In 2023, we focused on engaging with our partners in all aspects of supplier diversity, including participating in membership organizations to promote and credential diverse suppliers, providing internal and external education and promotion of supplier diversity as an element of our business strategy, and working directly with our diverse suppliers to enhance their future success.
We remain an active member of the Financial Services Roundtable for Supplier Diversity, a group dedicated to building strong supplier diversity practices in the financial services industry.
We also piloted a supplier development program, pairing a cohort of seven of our diverse suppliers with a national business coach and business growth curriculum. The participants reported a deeper understanding of marketing and strategy, as well as how to grow and sustain their businesses as a result of the program.
Finally, we launched internal educational campaigns by hosting diverse suppliers on campus and presented at several conferences about the contribution of supplier diversity to a successful business strategy.
What’s next
In 2024, our goal is to source at least 5% of eligible spend in the U.S. from diverse suppliers, amounting to $42 million through tier one and tier two spending.
We hope to reach this goal through the following actions:
- Create ownership and accountability by working with category managers and individual business units in the U.S. to identify potential sourcing opportunities for new and diverse suppliers.
- Partner with our Employee Resource Groups to embolden and build champions for supplier diversity throughout our organization within the departments and teams they lead and participate in.
- Monitor the status of supplier diversity metrics and celebrate and report achievements and progress internally and externally.
- Build and maintain a robust and qualified diverse supplier list that is shared with any buyer throughout the organization to reference when seeking a supplier.
- Provide a channel for Principal employees to directly identify diverse suppliers for the supplier diversity team for further assessment and evaluation.
- Strengthen collaboration with our tier one non-diverse suppliers to promote their use of diverse suppliers. This collaboration improves the overall health of the diverse supplier ecosystem and makes our values clear to our non-diverse suppliers.
Read more about supplier diversity program and requirements
Progress in spend with diverse suppliers by 2025 ($)
- Goal: $100 Million
- Progress: $42.1 Million
To learn more, read the Principal Financial Group 2023 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.
3735959-082024
