We create long-term value through active portfolio management in a broad array of asset classes and geographies to ensure we can deliver on our promises to policyholders and stakeholders. Allstate factors environmental, social and governance considerations into the investment process to help ensure our long-term health and stability.
We purposefully evaluate and manage our exposure to certain catastrophe risks in our commercial real estate portfolio, like those that may be impacted by climate change. When considering new investments in physical assets, including commercial real estate, we evaluate whether the risk profile is consistent with our risk appetite as determined by senior leadership.
The Allstate Investments’ Compliance department maintains a Restricted List that defines prohibited types of investments, typically entities whose activities are fundamentally inconsistent with Allstate’s values or are likely to result in reputational or other significant risks for Allstate. These restrictions include investments in companies that predominantly conduct business in the civilian firearms industry, or majority ownership interest or control of a company that operates a coal or other mine (either directly or through a subsidiary) or provides services to those mines. Our policy outlines that Investment Managers’ analysis and decision-making considers environmental, social and governance issues alongside Allstate’s values and reputation. Investment Managers are expected to act in accordance with the letter and the spirit of this policy. If an entity is not listed on the Restricted List but the Portfolio Manager or Asset Manager believes it could potentially be considered for inclusion, the Portfolio Manager or Asset Manager must obtain approval from Risk Committee and Investment Compliance prior to entering the transaction.
Our portfolio includes support of environmentally friendly and socially responsible investments with attractive risk/reward trade-offs. In 2017, our investments included a low-income-housing tax credit portfolio of $557 million, a socially responsible investment portfolio of $58 million and a renewable energy portfolio of $296 million. Included in the renewable portfolio are debt and equity investments in wind, hydro and solar power, as well as geothermal projects. Allstate’s low-income-housing tax credit portfolio supports low-to-moderate-income families by providing access to nearly 70,000 affordable rental housing units.
The number of multicultural and diverse households continues to grow, shifting the United States toward a population where minorities are the majority. There’s also research showing that while diverse investing teams consistently outperform less diverse ones, women and minorities are still underrepresented in the private equity and real estate private equity investment sectors. To address this, Allstate created the Diversity Emerging Managers program, whose goal is to identify the next generation of women and minority investment managers. We collaborate with GCM Grosvenor to select women- and minority-owned firms that demonstrate excellence as program participants. Allstate committed $96.5 million of the $100 million allocated to the program toward participating firms. We carefully assess the returns on the funds we commit for investment.
In addition to our financial commitment, the participating firms also receive development training from GCM Grosvenor that covers a wide range of topics related to operating an asset management firm, including management, finance and marketing.