Sustainability Report - Governance | Northwestern Mutual (2024)

FAQs

What is sustainability report in corporate governance? ›

Sustainability reporting refers to the disclosure, whether voluntary, solicited, or required, of non-financial performance information to outsiders of the organization. Sustainability reporting deals with qualitative and quantitative information concerning environmental, social, economic and governance issues.

We make it a top priority to demonstrate the most principled professional and ethical behaviors, complying with all applicable regulations and company policies to act in the best interests of our clients. Find out more about Northwestern Mutual corporate governance.

Governance for sustainability is defined as the set of written and unwritten rules that link ecological citizenship with institutions and norms of governance. It is a complex topic because it addresses the three issues of globalization, democracy and sustainability.

While sustainability and ESG are closely related concepts, they have distinct focuses and governance implications. Sustainability takes a broader, holistic view, encompassing environmental, social, and economic dimensions, while ESG provides a structured framework for evaluating specific performance criteria.

The "G" in ESG pertains to the governance factors of decision-making, from sovereigns' policymaking to the distribution of rights and responsibilities among different participants in corporations, including the board of directors, managers, shareholders and stakeholders.

This short summary therefore attempts to provides an overview of the main four pillars of sustainability: environmental, social, economic, and cultural. These pillars serve as a framework for organizations and communities to develop sustainable practices and ensure long-term viability.

In 2015, claims were brought against Northwestern Mutual for illegally changing how it calculated dividends on deferred, fixed annuities, reducing yearly payouts to 4000 current and 29,000 former annuity owners. The change had been made in 1985. Northwestern agreed to pay $84 million dollars to settle the lawsuit.

These advisors were seeking “something more,” such as: The desire to move away from a “sales-driven, insurance-first” culture to one that puts a less limiting wealth management ethos first. Access to more modern technology, better trading tools and the products and services that appeal to higher net worth clients.

Northwestern Mutual earns top marks for financial strength and has highly reliable policy illustrations. The whole life insurance policy itself is noteworthy because of the locked-in (and generally affordable) premium and annual dividends. While not guaranteed, Northwestern's paid these dividends every year since 1872.

Compliance, good governance, and risk management comprise the governance pillar of sustainability. This governance pillar, also called the economic pillar, refers to boards of directors and management aligning themselves with the interests of shareholders, the company's customers, value chains, and the community.

How important is governance in ESG? ›

Governance is a critical aspect of ESG, even if it's not always discussed as much. Strong governance and controls can help organisations improve performance, mitigate risk, and meet critical reporting and regulatory requirements.

Establishing a robust governance framework is the most important best practice for sustainability reporting. This involves integrating sustainability considerations into the core business strategy, ensuring clear leadership commitment, and implementing reliable data collection and reporting systems.

ESG is a way of measuring corporate governance. As more investors become aware of the importance of ESG and its role in investment decisions, it will become even more important for companies to demonstrate that they are managing their ESG issues effectively.

Sustainability is the umbrella that both terms fall under and contribute to. It is a broader concept that encompasses social, economic, and environmental aspects of responsible business practices. CSR is an initiative taken by companies to contribute to society beyond their economic objectives.

ESG is a non-financial reporting framework that covers several aspects of sustainability, whereas sustainability is about the social, economic and environmental factors that a company negatively impacts and can, in turn, create a positive impact on through changes to the way the company operates.

In the long term, sustainability reporting helps companies assess risks and opportunities and helps them drive green operations, align with CSR goals and increase cost saving opportunities.

A sustainability report is the main tool available to an organisation or company to voluntarily communicate its performance and impact — positive or negative — in environmental, social and governance (ESG) matters. The information in the report should be relevant to stakeholders.

Corporate sustainability is fundamentally anchored in three pillars: economic, environmental, and social. These are vital components in achieving a truly sustainable business model. Often, this is encapsulated under the ESG principles.

A sustainability report is the critical first step in implementing a strategy that can help an organisation to set goals, measure performance, manage sustainability-related impacts and risks, and understand how it drives value for its stakeholders. What are the benefits of sustainability reporting?