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To increase the robustness of our annual corporate sustainability reporting, Prudential will conduct triennial materiality assessments to ensure our goal-setting and reporting are aligned with the issues and topics that pose the greatest risk to our company. We will also develop our sustainability report by reporting specific material disclosures outlined in the Global Reporting Initiative’s Sustainability Reporting Standards (GRI Standards). We will also reference other frameworks and standards to build the bigger picture, such as the UN Sustainable Development Goals (UN SDGs), the Sustainability Accounting Standards Board (SASB), and the Task Force for Climate Related Financial Disclosure (TCFD). Finally, we will report quantitative and qualitative progress on all formalized Global Environmental Commitment topics within the report to ensure transparency and access for our stakeholders.
Prudential strives to achieve a Management-level (B-level) CDP score for our disclosures to the CDP Climate Change surveys. We will continue to strengthen management for climate change by: ensuring regular board-level oversight; expanding risk management practices related to climate change; setting robust emissions reduction targets; pursuing verification of emissions; and addressing gaps to meet B- or A-level scoring requirements to maintain our score and, within 3-5 years, achieve a Leadership (A) level score. You can find our recent CDP reports.
Reporting is also a key aspect to our investment businesses. Prudential commits to providing specific asset level reporting to maintain transparency regarding the importance of ESG to our investment decisions for our customers and clients. These reporting mechanisms include:
- GRESB (Global Real Estate Sustainability Benchmark)
- GIIRS (Global Impact Investing Rating System)
- Prudential corporate sustainability report
- PGIM Real Estate Sustainability Report
We will also provide more transparency around the allocations within our General Account, whereby we are able to commit Prudential’s own funds to back environmentally responsible companies and projects.
ResourcesResponsible Use of Natural
Emissions & Energy: Climate science has spoken: a rapid decarbonization of our global economy is needed to avoid the worst impacts of climate change. Prudential must also play our part by setting a robust emissions reduction target that speaks both to the coming years as well as the long-term. As a financial services company, the technical guidance to accurately understand our indirect footprint is in development. As we optimistically await this guidance, we will start with the operations where the data tells us a story: that of our domestic operations.
To that end, we commit to reducing emissions from our domestic operations 65% by 2050. To facilitate consistent reductions over this long-term time period, we are setting interim goals of a 34% reduction by 2030 and 52% reduction by 2040 compared to our 2017 baseline domestic emissions. To achieve this goal, Prudential will explore further investments in renewable energy, building upon our existing onsite solar projects to the bigger opportunities presented by third party solutions, such as power purchasing agreements and other renewable energy vehicles. While energy efficiency is always a central activity within our operations, we will remain diligent in identifying new innovations that may speed up reduction in energy consumption or offer opportunities for electrification. We will also work closely with our global businesses to strengthen the integrity of our data as well as explore opportunities to analyze more scope 3 indirect emissions sources in order to include them in our target setting exercises.
For our global operations not addressed by this target, we will continue to pursue energy efficiency initiatives at those locations as we work toward a comprehensive emissions reduction target. Our Japanese operations comply with the “Act on the Rational Use of Energy” law.
Prudential understands that climate science is ever developing. We commit to continuous learning and updating of our emissions reduction opportunities to align with the times.
Waste: We also commit to a goal of achieving 65% waste diversion by 2025 for operations in the United States, Brazil, Taiwan, and Korea. We will accomplish this through strengthening our internal recycling and composting infrastructures and availing ourselves of third-party waste diversion programs. Recycling of plastics and e-waste are two primary opportunities for Prudential. Additionally, we will implement a composting program for domestic hub cafeterias to encourage the useful diversion of organic waste. For locations not addressed by this goal, including Japan we will strengthen our data collection while simultaneously continuing to streamline operations to reduce waste, with the intention of eventually including them in our global effort. As it is possible to increase our diversion rate while sending more waste to landfill, we will simultaneously strive to decrease this waste going to landfill.
To minimize the waste impacts and paper consumption associated with doing business, we will continue to prioritize initiatives such as participation in direct deposit, “householding” to reduce the number of mailings going to the same household, and electronic delivery and completion of forms. When paper use is unavoidable, we will partner with vendors who practice and supply paper that adheres to sustainable practices.
Water: Prudential will also continue to implement water efficiency measures. We utilize low water flow plumbing fixtures for most all our operationally controlled facilities and installed a rainwater collection system at our new Prudential Tower, among other activities to reduce our water consumption at our domestic facilities. We commit to expanding these initiatives to our global locations by optimizing our landscaping features to reduce the need for water, implementing efficient fixtures to decrease water flow in our buildings, and exploring water reuse and recycling innovations such as greywater systems.
Building certifications: Our facilities are the mainframe of our operations. To support future progress on natural resource efficiency, Prudential will continue to pursue LEED certification on any new and existing buildings.
As market demand grows and our customers increasingly demonstrate interest in the impacts of climate change and how they can engage on this topic, we will continue to develop and offer relevant products for those third-party investors to encourage a low carbon economy, including green real estate, green bonds, and renewable energy.
The General Account provides an avenue to demonstrate our values via our own investments. We also have more flexibility in our investment approach due to the drivers being internally driven. While investments will always be made based on the specific investment objectives of the General Account, we have integrated ESG into security selection and portfolio risk management processes when it poses a material or potentially material impact on risk-adjusted returns. Therefore, in order to cultivate a positive impact, we will:
- Develop an internal ESG Policy with the objective of enhancing ESG awareness throughout the company and to achieve superior returns for the benefit of our stakeholders; we will also publicize our policy by 2021.
- Proactively explore investments in companies and projects that responsibly address emissions, water consumption, and/or waste generation, such as direct or indirect projects that reduce emissions (REDD+ credits), energy efficiency, and renewable energy.
Prudential’s Impact & Responsible Investing unit commits to invest in companies and projects that promote sustainability and resiliency. Investments will responsibly encourage the proliferation of clean energy (e.g. energy efficiency, biofuels), water protection (e.g. stormwater infrastructure, wastewater treatment), and reduced waste (e.g. food waste reductions, upcycled products). Several goals to cultivate a positive impact are:
- Prudential’s Impact & Responsible Investing will commit 10% of its portfolio by 2025 to companies and projects that promote sustainability and resiliency.
- The Prudential Foundation will grant $25 million in support to mitigate, prepare, relieve, and recover from natural disasters that are intensified by climate change by 2025.
The resiliency of our business is tied to the satisfaction of our customers and optimal working environments for our employees. As a company with a global footprint, our operations are subject to many different climates and weather patterns. Prudential commits to strengthening our business continuation activities by creating a global plan providing discrete instructions for responding to a business resiliency issue. We will also analyze responsible redundancy measures to ensure that downtime and disruption to business operations will be minimized.
Moving forward, we will also pursue climate scenario analysis to assess the physical and transitional risks associated with climate change that have the potential to impact our business. We will include scenario analysis into our strategic planning and enterprise risk management processes to evaluate and strengthen the potential resiliency of our business.
Resiliency is part and parcel of ensuring the long-term reliability and success of a business. As part of our commitment to our customers and shareholders to maximize opportunities to long-term success of our business and services, we pledge to invest in long termism and businesses and projects that support resiliency. We will also apply climate scenario analysis to evaluate future performance of investments and inform our decision-making.
Education and Engagement
Prudential cannot act upon our goals without our employees; they are building a better financial future for our customers and our communities around the globe. We must engage our employees to learn from and learn together about the opportunities we have to reduce our negative impacts on the world around us. Prudential commits to establishing robust programs to creatively and consistently engage our employees toward our common environmental goals via the following:
- We will institute a company-wide sustainability curriculum open to employees. The curriculum will address topics such as employee commute, waste diversion, and small-scale behavioral changes that can make a significant positive difference on our impacts on the environment.
- We will create an annual earth day seminar to bring employees together on a regular basis. The seminar will be an opportunity to share highlights of environmental programs over the previous year, offer opportunities to learn about our vendors’ approaches to sustainability, and update our staff on our progress toward our Global Environmental Commitment.
- We will build upon current volunteering efforts, such as our International Insurance locations established “International Volunteer Day,” to create a global vision toward volunteerism and employee engagement.
- We will continually develop Green Teams and encourage membership across the global business. Through these Green Teams, we can share ideas and progress toward running environmental campaigns, celebrate successes via a connected platform, and even share employee stories of their green activities at home.
Our influence is not limited to within the walls of our company. We have an opportunity to magnify our impact by engaging with others who work with us as well. Because the quality of our vendor relationships has a direct impact on our brand and reputation, we expect our vendors to deliver on their promises, seek opportunities to reduce costs, manage risk, adhere to the Prudential Vendor Code of Conduct and Terms of Engagement and share our commitment to Environmental Responsibility and Supply Chain Diversity. We therefore commit to engaging 100% of our top vendors by 2022 to support progress toward the Global Environmental Commitment and to report on climate change KPIs. This exchange of information and best practices will inform opportunities for collaboration and joint initiatives to reduce our collective impacts.
Prudential understands that to fully implement change, corporations, nonprofit advocates, governments, and our stakeholders must all work together to tackle all facets of an issue. To that end, we will identify public policy issues including those that align with our Global Environmental Commitment goals and proactively engage public policymakers to help inform, shape and advance, as appropriate, these issues.
Our investment activities can also provide an avenue to educate and engage our stakeholders on the importance of environmental responsibility. For our customers and clients, we commit to becoming a go-to resource for thought leadership on sustainable investing strategies. Content will be accessible via both public and private avenues, providing context for investment decisions and case studies supporting investment activities that align with our customers’ values.
Through the Prudential Foundation and Impact & Responsible Investing unit, Prudential will invest or grant dollars to companies and organizations that change public perception toward a more environmentally responsible society. These organizations are vital to the promulgation of environmental research regarding our impacts and strategies to mitigate those impacts. We recognize the importance of these entities providing on-the-ground engagement that can become the seed of an individual’s own environmental commitment.