Our approach to ESG reporting
About this report
In this year's report, we have broadened our disclosures with additional detail about efforts such our climate change mitigation plans and employee engagement strategies. At its core, climate change impacts Allstate because it impacts our customers and stockholders. Allstate is developing and modernizing critical capabilities to accelerate growth and meet the emerging expectations of customers in response to climate change.
This report responds to ratings and rankings questionnaires and also increases stakeholder awareness and engagement. It provides key insights into Allstate's progress in addressing climate change, improving Inclusive Diversity & Equity (IDE), enhancing consumer data privacy measures, improving organizational culture, and other ESG goals and achievements. We have invested in consumer and internal data collection software to streamline our sustainability reporting while simplifying internal controls and increasing our transparency and accuracy of reporting. All information represents our 2022 fiscal year, unless otherwise noted.
The Sustainability Report builds on the content in our 10-K and Proxy Statement to tell the full story of Allstate's long-term value creation. This report incorporates the Guiding Principles and Content Components of the Integrated Reporting (IR) framework as produced by the International Integrated Reporting Council (IIRC). We also include disclosures to the relevant SASB sector standards, the Task Force on Climate-Related Financial Disclosures (TCFD) guidelines, our EEO-1 report, and our Executive Summary Report. Finally, the report references the GRI Standards and the UN Sustainable Development Goals (UN SDGs).
We prioritize ESG topics based on their alignment to Our Shared Purpose, Transformative Growth and long-term enterprise value creation. To determine Allstate's risks and opportunities as well as our social and environmental impact more holistically, we periodically conduct sustainability assessments to learn what ESG issues are significant to our stakeholders. We zero in on our material ESG factors along with traditional financial information to strengthen our strategy development and risk management. Read more in the Materiality & stakeholder engagement section of the report.
Actions speak louder than words
Allstate is leader in the industry, focusing on innovative technology, community initiatives and diversity while having strong returns on our portfolio.
Our integrated approach
Founded in 1931, Allstate became a publicly traded company in 1993 and fully independent in 1995, when it spun off from Sears Holdings Corp. We are one of the largest publicly held personal lines property and casualty insurers in America. We are listed on the New York Stock Exchange under the trading symbol ALL and are widely known for our slogan: "You're in good hands with Allstate.®"
This slogan reflects our commitment to serve all stakeholders — customers, employees, agents, suppliers, stockholders and the communities where we live and work. It shapes the guiding principles of Allstate, known as Our Shared Purpose: to empower customers with protection to help them achieve their hopes and dreams.
Allstate believes that the interrelation of economic, environmental and social factors is increasingly material to our long-term value creation. This view informs our strategy and how we manage risks and opportunities.
What does value creation look like at Allstate?
We have adopted the Integrated Reporting (IR) framework, which integrates our financial information and sustainability data to showcase the corporation's commitment to and progress toward creating long-term value for those we serve. We aim to follow the spirit of the IR guidelines to:
- Improve the quality of information to providers of financial capital and enable efficient and productive allocation of capital.
- Promote a cohesive approach to corporate reporting and communicate about factors that materially affect our ability to create value over time.
- Enhance accountability and stewardship for the six capitals (financial, manufactured, intellectual, human, social and relationship, and natural).
- Support integrated thinking and decision-making that create value over the short-, medium- and long-term.
Value creation is governed and generated by Allstate employees. The return on value creation manifests in many forms, including more resilient business operations, stronger competitive positioning, improved social, economic and environmental outcomes, well-managed risk, and enhanced societal well-being.
To determine Allstate's risks and opportunities as well as our social and environmental impact, we periodically conduct sustainability assessments to learn what issues are significant to our stakeholders.
Allstate issued its first corporate report addressing ESG topics in 2003. In 2015, we conducted our first sustainability assessment to identify the ESG topics that are most significant to our stakeholders and used those priorities to guide our strategy until we revisited the sustainability assessment in 2020. In 2020, we completed our second sustainability assessment and incorporated components of integrated reporting and the six capitals – financial, manufactured, intellectual, human, social and relationship and natural. We interviewed internal and external stakeholders and carefully analyzed written sources to identify issues of key significance to our stakeholders and Allstate and to determine where they align. Allstate is planning to conduct its next sustainability assessment by year-end 2024.
In 2021, we supplemented our 2020 sustainability assessment with extensive stockholder outreach to foster dialogue on societal issues of importance. The figure below outlines the results of our sustainability assessments and shows where specific topics align along the continuums of significance to Allstate and significance to our stakeholders. This alignment guides the development of our actions and topics highlighted in this report.
In this report, we communicate our management of the following material topics:
- Climate strategy
- Advancing consumer disaster resiliency
- Customer-centric & responsible products
- Technology and digitization
- Privacy and information security
- Employee well-being and safety
- Employment relations
- Inclusive Diversity (workforce and suppliers)
- Organizational culture
- Public policy
- Responsible investment
- Talent recruitment
Sustainability benefits Allstate's stakeholders and Allstate continually seeks input from various groups to meet its obligations as a corporate citizen and drive long-term value creation. Feedback is collected, key topics are identified and strategies are developed to address gaps. There are also stakeholder-specific avenues for engagement. Each year, we evaluate our material topics to ensure they reflect the priorities of Allstate and our stakeholders.
Governance of sustainability
Allstate has strong corporate governance guided by three primary principles: dialogue, transparency and responsiveness. The Board's enhanced governance policies align with best practices and serve the interests of stockholders. Allstate's stockholder engagement program is integral to the Board's oversight and decision-making process and informs important practices and policies in our strategy, compensation and ESG programs. As a result, the Board reviewed Allstate's ESG investing strategy, including $7.5 billion in responsible investments as of year-end 2022, and expansion of carbon transition investment capabilities. In 2022, Allstate engaged with stockholders holding approximately 36% of outstanding shares. For in-depth information about our governance practices, please see our 2023 Proxy Statement.
Our Board of Directors and CEO are responsible for the overall performance of Allstate, including sustainability. Sustainability is managed across the business by the following groups: Enterprise Risk and Return Council (ERRC), Responsible Investing Committee, the ESG Steering Committee, the Inclusive Diversity & Equity team, and the Sustainability team.
The ERRC is Allstate's senior risk management committee. It establishes risk and return targets, determines economic capital levels and directs integrated strategies and actions from an enterprise perspective. The ERRC is made up of Allstate's CEO, chief investment officer, chief legal officer, treasurer, area of responsibility (AOR) presidents, and enterprise and AOR risk and financial officers. The ERRC reviews enterprise principles, guidelines and limits for Allstate's significant risks, and monitors the strategies and actions management has taken to control these risks. The Board of Directors and the Risk and Return and Audit Committees oversee Enterprise Risk and Return Management. For further information on our risk factors, please see pages 82-84 of the 2022 Form 10-K.
The Responsible Investing Committee monitors ESG investing trends, evaluates ESG investing best practices, supports the work of the ESG Steering Committee and periodically reports about its activities to other senior leaders within Allstate. With Allstate's Investments Risk Committee, the Responsible Investing Committee also monitors our investment portfolio for potential short- and long-term exposures to climate change. Read more in the Responsible investing section of the report.
Allstate has maintained its cross-functional ESG Steering Committee since 2007. It includes experts from Strategy, Finance, Financial Products, Enterprise Solutions, Corporate Brand, Enterprise Risk and Return Management, Human Resources, Legal, Investments, Property-Liability, and Protection Products and Services. Allstate's senior vice president of corporate strategy and senior vice president of corporate law co-chair the committee, which meets monthly and updates senior executives regularly. With 12 members, including the two committee chairs, representing 11 business functions as of Dec. 31, 2022, the committee supports Allstate's commitment to the environment, health and safety, corporate social responsibility, human capital management, corporate governance, sustainability and other public policy matters. The Sustainability team reports monthly to the ESG Steering Committee and the Board of Directors is provided with regular updates.
What's in this report?
The appendix includes resources that provide a closer look at our data and some of our reporting highlights.
- ESG Data – Year-over-year comparisons of raw environmental, social and governance data.
- GRI Index – We follow the Global Reporting Initiative (GRI): Core option as a reporting structure. In the GRI index, we also identify how our initiatives align with the United Nations Sustainable Development Goals (UN SDGs).
- SASB Index – A five-page report that communicates financially material sustainability information to investors.
- TCFD Index – Connecting dots to public disclosures on our climate-related risks and opportunities.
Stakeholder inclusiveness is a core principle of Global Reporting Initiative (GRI) sustainability reports, and we strive to identify all of Allstate's stakeholders and respond to their expectations and interests.
We identify key stakeholder groups through the ESG Steering Committee, feedback from senior leaders and employees, and by mapping the full scope of our impacts, from suppliers to consumers. We select stakeholders according to their knowledge and understanding of our company as a whole, their orientation relative to or within the financial services industry and the extent to which they can impact, or be impacted by, Allstate.
We interviewed stakeholders and analyzed their perspectives available from public documentation for our 2020 sustainability assessment, and held discussions with stockholders in 2022 to discuss Allstate's Transformative Growth progress. We created a Societal Engagement Framework to prioritize ESG issues and to evaluate, prepare for, and act on issues where we have a unique ability to make meaningful impact. This framework allows us to align our values, business priorities and ESG actions. We further prioritize our efforts on ESG matters that are strongly aligned to our brand, business and risk and return profile. Three ESG focus areas have been identified by the SEF as most significant to Allstate and its stakeholders: climate, data privacy and equity. This framework evaluates issues on five criteria: importance to our ability to serve customers, level of Allstate's expertise, ability to effect change, impact on stakeholders, and risk-adjusted returns.
Programs and performance
Since 2010, Allstate has partnered with global research firm RepTrak to study how stakeholders perceive Allstate and what influences those perceptions. These insights drive action. We survey customers, consumers, agents and employees every quarter, as well as investors and opinion leaders each year, and policymakers every two years.
Each survey measures both emotional and rational elements of reputation. The emotional reputation score helps us understand how stakeholders feel about Allstate. Rational reputation metrics help Allstate understand what's underneath that emotional reputation score – the behaviors, attitudes and perceptions that determine what stakeholders think about Allstate. This helps us understand what stakeholders are willing to do on Allstate's behalf. Strong reputation scores correlate to stakeholders behaving in ways that are meaningful to Allstate, such as buying a new policy, recommending our products, services and agents, and saying something positive about the company.
As feedback is collected across these stakeholder groups, key reputation drivers are identified, and strategies are developed to address gaps. There are also stakeholder-specific avenues for engagement. Movement in our overall reputation score is the culmination of many activities, by many different teams. Allstate ended 2022 with its consumer reputation score at the highest level since tracking began in 2010.