A rigorous governance structure underpins how we work, enabling us to guard against risk and capture opportunities, helping our clients trust us to deliver long-term value.
Our corporate stewardship begins with rigorous oversight of our operations, and extends to embedding ESG factors into our process, our active ownership of the assets we manage and the community investments we make to advance sustainable practices and drive positive change.
Our vision for ESG is embedded at all levels of our organization. Our board of directors, and its Corporate Governance Committee engages in active oversight of ESG matters of significance to the corporation and its subsidiaries. In addition, the board’s Business Risk Committee provides oversight of certain financial and operational risks associated with climate change and other environmental factors through its oversight of the corporation’s global risk-management framework and risk-management policies.
Our head of Corporate Sustainability, Inclusion and Social Impact, who reports directly to our chairman and chief executive officer, is responsible for the design and implementation of our enterprise ESG strategy. She also chairs the Enterprise Sustainability Council, comprised of a group of senior employees who enable the implementation of Northern Trust’s ESG strategy by reviewing emerging trends and issues that impact Northern Trust sustainability initiatives; steering adhoc working groups that accelerate alignment and resolution; reinforcing enterprise policies, programs and best practices that drive sustainable outcomes; and formulating balanced and data-based enterprise views for ESG decision-making processes.
We expect all employees to uphold our core values, exercise the highest ethical judgment and comply with the laws and regulations that govern our business. All information should be treated appropriately based on its classification. Breaches of highly sensitive client or business information may result in disciplinary action. Employees are required to take the following five courses annually: “Anti-Money Laundering (AML) & Economic Sanctions,” “Antibribery, Corruption and Fraud,” “Global Privacy and Data Protection,” “Information Security” and “Standards of Conduct.” They are also required to certify their compliance with the Code of Business Conduct and Ethics. Each of the training courses was completed by more than 99 percent of employees in 2021.
Additionally, certain employees are required to complete periodic certifications and attestations regarding personal securities transactions, political contributions and the provision of gifts and entertainment. Employees in the APAC and EMEA regions complete expanded AML, conduct and privacy training in accordance with the regulatory characteristics of those respective regions.
Northern Trust concentrates its public policy positions in areas most relevant to its businesses, including U.S. federal, state, municipal and European Union financial regulatory reform efforts. We work with the trade associations of which we are a member and meet directly with federal, state and municipal legislators, regulators and other government officials globally to discuss our positions and make recommendations for improved policy and regulation. At the U.S. federal level, we focus on proposed regulatory and policy changes that will affect our businesses by enhancing the safety of client assets and the financial system, as well as the strength of the global economy. At the state and municipal levels, we regularly meet with elected and appointed officials to discuss public policy positions that will affect our businesses. In appropriate circumstances, we file comment letters to proposed federal regulations, copies of which are publicly available.
The Corporate Governance Committee of our board of directors provides oversight of the political, lobbying and other public advocacy activities of Northern Trust, including significant trade association memberships.
Northern Trust expects employees to seek guidance and pre-clear certain individual political contributions in accordance with the guidelines set forth in federal, state and municipal "pay-to-play" regulations and internal policies and procedures.
Northern Trust contributes corporate funds to industry trade organizations in support of the corporation’s public policy objectives. Participation in these organizations is important to gaining industry insight, fostering relationships and developing professional opportunities within the industry. The principal trade associations to which Northern Trust belongs are the American Bankers Association, the Bank Policy Institute, the Investment Company Institute and the Securities Industry and Financial Markets Association. We are also a member of the Illinois Bankers Association, the California Bankers Association and the Florida Bankers Association.
Northern Trust engages in the political process to advance and protect its long-term interests, without regard to the private political preferences of our executives. We do not contribute directly to political parties, committees or candidates for public office.
We do, however, sponsor both a federal-only political action committee (PAC) and a multi-candidate PAC, both of which are permitted to solicit segments of a restricted class of Northern Trust's U.S. employees for contributions used to support candidates who support legislation important to Northern Trust. All contributions to the PACs are voluntary; employees are neither favored nor disadvantaged based on their participation. The leadership of each PAC reviews proposed political contributions based on the public policy interests of Northern Trust. Federal lobbying reports may be found on our website: https://www.northerntrust.com/ united-states/about-us/corporate-social-responsibility/policy.
As detailed in our Supplier Code of Conduct, Global Procurement Policy and Third Party Management Practice Standards, Northern Trust expects our providers to conduct business in an ethical, legal and socially responsible manner.
We regularly review vendors' adherence to our policies and pursue corrective measures when necessary. We use the U.S. Office of Foreign Assets Control to screen each vendor for compliance with all economic and trade sanctions.
Northern Trust is committed to integrating ethical, social and environmental factors into our Global Procurement Policy.
ASPECTS OF OUR GLOBAL PROCUREMENT PROGRAM INCLUDE:
This process maximizes relationships with vendors resulting in ongoing risk mitigation and value delivery. We continue to invest in and review new vendor-management techniques and processes that will increase coverage to additional supply categories.
The goals of Northern Trust’s vendor management program are to:
The vendor management program process includes:
Business diversity is an essential component of a world-class, global procurement organization. How, and with whom, we do business reflects our commitment to developing and supporting diverse business owners.
Diverse suppliers contribute to our success, foster increased competition and innovation, and enhance our ability to provide clients with service excellence.
Northern Trust collaborates with several organizations to encourage the economic development of our diverse vendors, including the National Minority Supplier Development Council, the Chicago Minority Supplier Development Council, the Women's Business Development Center, Chicago United, Financial Services Roundtable for Supplier Diversity, Disability:IN and the LGBT Chamber of Commerce of Illinois.
We strive to:
Engage with certified and qualified diverse businesses
Stimulate and promote economic development in the communities where we work
Help break down barriers to growth that still exist for minority- and women-owned businesses
Recognize and support firms that exhibit a commitment to diversity, irrespective of company size, longevity and ownership
Use a quantitative approach to how we measure our engagement
Northern Trust’s Business Diversity Program includes the measurement and reporting of key aspects of diversity including: the composition of the company’s ownership, leadership, and employees; its philanthropic activities; and its own supplier diversity program.
In addition, our program requires our suppliers to also do business with diverse suppliers, which we track and measure.
Northern Trust's Business Diversity program is led by a senior-level manager, the global head of Business Diversity. In 2021, we spent more than $83 million with businesses owned by minorities, women, veterans and LGBTQ+ and disabled people, as well as small business enterprises. Northern Trust continues to bring diverse suppliers into our supply chain.
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