Allstate’s investment decisions represent a critical part of our corporate responsibility footprint, affecting employees, customers and investors. We provide the best value for shareholders by taking a competitive and holistic approach with our $88 billion investment portfolio in 2019. As a steward of this portfolio, Allstate understands that environmental, social and governance (ESG) issues may influence investment performance. Allstate’s investment analysis and decision-making process consider these issues along with our values.
In 2019, Allstate formed a Responsible Investing Committee with representatives from The Allstate Corporation and Allstate Investments. The Responsible Investing Committee’s actions may include monitoring ESG investing trends, understanding ESG investing best practices, and periodically reporting about its activities to other authorities within Allstate, among other responsibilities.
Policies and Procedures
In June 2020, Allstate’s Investment Management Committee adopted our Responsible Investing Policy. The Policy outlines our expectations for investment professionals to consider available data for ESG-related factors when making investment decisions and requesting our external money managers to do the same. We expect our investment professionals to refrain from making certain types of investments that may result in significant ESG-related risks and consult with the Responsible Investing Committee, as needed, on any related asset selection decisions.In addition to our Responsible Investing Policy, our Investment Management Guidelines state that investment managers’ analysis and decision-making consider environmental, social and governance issues alongside Allstate’s values and reputation when assessing the risk/return trade-off of a particular investment. Investment managers are expected to act in accordance with the letter and the spirit of the guidelines.
In 2020, our investment professionals will receive formal training on our Responsible Investing Policy and related expectations. We continue to enhance our approach to responsible investing and look forward to sharing our progress in future reporting.
Programs and Performance
When evaluating our investment portfolio, we are mindful of climate change risks. We purposefully evaluate and manage 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.
Allstate Investments’ compliance department maintains a restricted list that defines prohibited types of investments, which are typically entities whose activities are fundamentally inconsistent with Allstate’s values or are likely to result in reputational or other significant risks. 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.
Climate change represents an urgent global concern for all companies, including Allstate. Allstate is tackling climate risk in the way we serve and safeguard customers and communities. Our work on climate risk is helping us respond to a changing environment and position us for the future.
Enhancing Allstate’s value over the long-term horizon requires management of all factors material to our business. The resources in this Investor Hub are intended to complement the publicly available materials on our Investor Relations page, adding environmental, social and governance (ESG) perspectives to our business strategy and helping communicate our vision for the future.