Deals & People November 17, 2009

Principal’s Aschenbrenner Retires, Houston Expands Role

As part of a planned leadership succession, the Principal Financial Group announced that John Aschenbrenner, president – insurance and financial services, will retire at the end of 2009 after more than 37 years with the company. 

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Effective upon Aschenbrenner’s retirement, Dan Houston, president – retirement and investor services, will assume leadership of the life, health and specialty benefits businesses in addition to his current role leading the U.S. Asset Accumulation segment.  Houston’s new title will be president – retirement, insurance and financial services. 

Named to his current position in 2003, Aschenbrenner has been responsible for overall management of the company’s life, health and specialty benefits businesses as well as the distribution channels supporting those businesses.  

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“John has made many valuable contributions to The Principal throughout his career. In particular, his leadership has strengthened our position as an employee benefits leader serving small- to mid-size businesses,” says Larry Zimpleman, chairman, president and chief executive officer. “We are thankful for John’s contributions to The Principal and have great confidence in the proven talent and experience of our leadership team going forward.” 

The Markets November 17, 2009

Considering Social Factors Doesn't Have to Cost Investment Returns

Specific environmental, social, and corporate governance (ESG) factors can have a positive impact on portfolio returns, according to a new Mercer report.

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In its new report, “Shedding Light on Responsible Investment: Approaches, Returns and Impacts,” Mercer summarizes and comments on 16 academic studies—10 of which demonstrate a positive relationship between ESG factors and companies’ financial performance, four of which show a neutral relationship, and two which show a neutral to negative relationship.

The academic studies of note that measured the impact of environmental factors on financial performance suggest, overall, that the materiality of environmental factors varies across industries and that the financial community assigns more importance to evaluating how environmental factors affect firm value in high-environmental-risk industries than in lower-risk industries, according to the report.

The studies that measured the impact of social factors on financial performance found that improved social performance of companies in an investment portfolio can lead to improved financial returns, while studies that measured the impact of governance factors on financial performance found that strong corporate governance—and promoting this through engagement—has a positive impact on firm and portfolio performance.

The report said studies that focused on measuring the impact of screening out “sin” stocks (i.e. tobacco, arms, etc.) found, for the most part, either neutral or positive effects on financial performance.

“The idea that responsible investment does not have to come at a cost to performance is becoming well established in the institutional investment industry,” said Tim Gardener, global chief investment officer for Mercer’s investment consulting business.

An executive summary of Mercer’s report is available at www.mercer.com/ri.

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