SUSTAINABLE PROCUREMENT

The magnitude of our global purchasing activity means our procurement practices have far-ranging effects because we can positively influence the businesses from which we source products and services. By understanding how suppliers manage emissions, waste, regulatory compliance and cybersecurity, we can better articulate Allstate’s expectations. By actively managing these risks, we enhance our reputation and align procurement decisions with environmental and social responsibility, which increases the confidence of stakeholders who depend on Allstate’s performance.

Supplier Impacts

We manage environmental and social impacts in our supply chain through agreements, surveys, scorecards, resource reduction programs and policies.

As stated in the Supplier Code of Ethics, all suppliers doing business with Allstate must adhere to our requirements regarding human rights, environmental stewardship, diversity and inclusion, child labor and more.

The Allstate Sustainable Procurement Program aims to enhance Allstate’s reputation, mitigate corporate risks and align purchasing decisions with environmental and social sustainability. Our Sourcing & Procurement Solutions department focuses our responsible purchasing program on our key commodity areas: computer equipment, furniture, leased properties, paper products, professional services, software, utilities and our corporate vehicle fleet.

The main elements of the responsible purchasing program include:

  • Sustainable procurement road maps: Category-specific procurement guidance with a phased process, timelines and key considerations for using our supplier evaluation tools.
  • Sustainability questionnaires: Category-specific surveys containing KPIs (key performance indicators) to benchmark suppliers on the most relevant sustainability risks for eight commodity areas.
  • Sustainable procurement playbooks: Procurement category-specific guidance providing detailed rationale behind assessing material impacts and how suppliers should respond to the KPIs.

In late 2018, the Allstate Sourcing & Procurement Solutions organization hired a sustainability sourcing lead to spearhead the development and implementation of ESG-specific practices in our supply chain. The sustainability sourcing lead began developing best practices for product and service categories prioritized by the needs of the business. In the future, we hope to better understand our business’s footprint by increasing visibility and transparency in the supply chain and tracking, managing and reporting on sustainability KPIs for our suppliers.

Sustainability Questionnaires

The sustainability questionnaire contains KPIs to assess a supplier against the most material impacts related to that resource. Each KPI has a dedicated subsection. In 2019, we hope to tailor the questionnaires by specific product and service category.

  • Rationale and best practices: ​Provides the commodity manager with the context for asking suppliers to respond to the specific KPI. Where relevant, best practices to describe how suppliers should address the KPI are also provided.
  • Supporting documentation: ​Lists ​optional​ documentation for commodity managers to request from suppliers to verify responses to the KPI.
  • Case study: Provides either a demonstration of the rationale behind asking the question or an example of how a company addresses the material impact. The intent is to give commodity managers real-world context.
  • Additional resources: ​Provides links for commodity managers to access additional research or guidance, should the manager receive questions from suppliers that are not addressed in the playbook. Managers can also share these directly with suppliers.

Sustainability Playbooks

Sustainable procurement playbooks provide a detailed rationale behind assessing material impacts and how suppliers should respond to the KPIs. We distribute the playbooks to Allstate’s commodity managers in each spending category, who then use the tools to help suppliers provide required information for each KPI. We continue to mature our process to accurately and consistently track supplier KPIs, as well as evaluate emerging product and service categories where we may need to develop and issue new playbooks.

Cybersecurity

As organizations’ reliance on information technology has increased, so has the importance of customer privacy and data security. To mitigate the potential risks of an information security breach arising from a supplier relationship, we provide vendor-specific training on Allstate’s security standards. We train suppliers to recognize behaviors that increase risk, familiarize them with Allstate’s corporate values and evaluate security protocols of every supplier with access to sensitive data. Allstate requires all vendors to complete this course.

Supplier Diversity

We spent $308 million with minority-, woman-, veteran-, LGBTQ- and disabled-owned businesses in 2018, representing 7.1% of our total supplier spending. We attribute the decrease from 2017 to the acquisition of two of our largest diverse suppliers, which meant they no longer qualified for certification and decreased overall supplier spending. To be eligible for our Supplier Diversity Program, a company must provide certification as a minority-, woman-, veteran-, LGBTQ- or disabled-owned business by one of the following councils:

  • National LGBT Chamber of Commerce
  • National Minority Supplier Development Council
  • U.S. Pan Asian American Chamber of Commerce
  • Women’s Business Enterprise National Council
  • Department of Veterans Affairs Center for Veterans Enterprise Vendor Information
  • Disability: IN (formerly known as U.S. Business Leadership Network)

We evaluate progress by measuring our targeted spending in the first five categories listed below. We also measure our inclusive spending in all 13 categories identified by the Small Business Administration as diverse and of special interest in meeting statutory obligations. These include:

  • Minority/woman-owned business enterprises
  • Minority-owned business enterprises
  • Woman-owned business enterprises
  • Lesbian-, gay-, bisexual-, transgender-, questioning-owned business enterprises
  • Disabled business enterprises
  • Disabled veterans business enterprises
  • Disadvantaged business enterprises
  • Historically black colleges and universities
  • Historically underutilized business zone
  • Small Business Administration 8(a) program
  • Small disadvantaged business enterprises
  • Veteran-owned business enterprises
  • Small-business enterprises

Diverse supplier spend as percent of purchasing

Supplier diversity spend (Millions of $)

Building Ties with Diverse Groups Through Memberships

Allstate works with select organizations to conduct national benchmarking, connect with diverse suppliers and identify successful practices in supplier diversity. Allstate is a member of the following organizations:

  • National Minority Supplier Development Council
  • Women’s Business Enterprise National Council
  • National Veteran-Owned Business Association
  • National LGBT Chamber of Commerce
  • United States Hispanic Chamber of Commerce
  • United States Pan Asian Chamber of Commerce
  • Financial Services Roundtable for Supplier Diversity

Industry Recognition

Supplier diversity performance is an important factor in many awards, lists and indexes for inclusion and diversity. Our 2018 recognition:

  • Diversity Best Practices Inclusion Index – Diversity Best Practices
  • 50 Top Companies for Supplier Diversity 2017 – Black Enterprise Magazine
  • Top 50 Companies for Diversity 2018 – DiversityInc Magazine (13-time award winner)
  • 2017-2018 “Best-of-the-Best” Corporation for Inclusion – National LGBT Chamber of Commerce

Training the Next Generation of Diverse Suppliers

Allstate is committed to helping develop diverse suppliers through our supplier diversity initiatives. Every year, we host the Allstate Supplier Diversity Exchange, which gives diverse suppliers and startups the opportunity to network with key Allstate decision-makers and our major suppliers and strategic partners. The program is mutually beneficial: Allstate helps support businesses in underserved areas, and participating companies become better positioned to compete for contracts.

While attendance at this event does not guarantee business, since its inception, more than 100 participants have had the opportunity to compete for Allstate’s business, with over 50% having been awarded contracts. Allstate has spent over $850 million with diverse suppliers that have participated in the event. In 2018, 60 businesses attended the Exchange. We are still in the decision-making process of potentially awarding contracts to 2018 participants.

Allstate Mentoring Program

The Allstate Mentoring Program is designed to help diverse business owners strengthen and grow their companies. Participants are matched with Allstate executives whose expertise is aligned with the developmental need of the business owner. This 12-month program involves a series of live sessions and webinars focused on leadership and employee development, financial management, sales and marketing, and technology enhancement.

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