Allstate s 2021 Environmental, Social and Governance Summary


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Allstate’s 2021 Environmental, Social and Governance Summary

2 Allstate 2021 Environmental, Social and Governance Summary letter from Chair, President and CEO

letter from Chair, President and CEO

Dear Stakeholders,

The Allstate Corporation

As a purpose-driven company powered by purpose-driven people, Allstate empowers customers, creates opportunity for our team, delivers value for shareholders and improves society.

We believe that actions speak louder than words, which is why we have integrated strong environmental, social and governance (ESG) principles and practices into Allstate’s culture and business strategy for decades.
Our approach has produced strong outcomes:
• industry-leading customer-centric innovations that deliver economic and social benefits such as telematics and pay-per-mile insurance
• strong returns in Allstate’s investment portfolio • a resilient, diverse and ethical workforce with an
empowered workplace culture that leverages differences to strengthen decision-making • a robust approach to managing climate risk

Allstate seeks to create the future, not just react to trends. Allstate's societal engagement is focused on climate, data privacy and equity, which link to Our Shared Purpose and are where we have the capabilities and platform to create meaningful change.
These issues matter to our business and society. We have actively addressed climate change for over 25 years since it damages customers’ homes and impacts shareholder returns. Data privacy threatens customers' identities and impacts operating practices. Equity is a core value of our team.
We have made good progress since we first began reporting on ESG topics in 2003, but there is more to do. We welcome your feedback as we advance how Allstate delivers on our promise to society.

THOMAS J. WILSON Chair, President and CEO

table of contents

2 Letter from Chair, President and CEO 3 Our Shared Purpose, ESG Priorities
and Oversight 6 ESG Goals and Achievements 8 Climate Change

9 Responsible Investing 10 Human Capital Management 11 Inclusive Diversity & Equity (IDE) 12 Data Privacy and Information Security

3 www.allstatesustainability.com
Our Shared Purpose, ESG priorities and oversight
Our Shared Purpose, ESG Priorities and Oversight
Allstate (NYSE: ALL) is one of the largest publicly held personal lines insurers in the U.S. with 191 million policies in force as of year-end 2021, protecting autos, homes, motorcycles, health, disability, lives, personal devices and identities.
Our products are sold through Allstate agents, independent agents, call centers, websites, major retailers and voluntary benefits brokers. We have approximately 54,700 employees and 83,600 agents and agent support staff.
We updated Our Shared Purpose in 2021 to guide the cultural change needed for our Transformative Growth strategy, a multi-year initiative to increase personal property-liability market share by building a low-cost digital insurer with broad distribution. Our Transformative Growth strategy will improve customer value, expand customer access, increase sophistication and investment in customer acquisition, and leverage new technology ecosystems and organizational capabilities. Learn more in our 2022 proxy statement and 2021 Form 10-K.

Our Shared Purpose

As the good hands...
We empower customers with protection to help them achieve their hopes and dreams.

We provide a ordable, simple and connected protection solutions.

We create opportunity for our team, economic value for our

our operating standards
Focus on Customers by anticipating and exceeding service expectations at low costs.
Be the Best at protecting customers, developing talent and running our businesses.
Be Bold with original ideas using speed and conviction to beat the competition.
Earn Attractive Returns by providing customer value, proactively accepting risk and using analytics.

shareholders and improve communities.
our values
Integrity is non-negotiable.

our behaviors
Collaborate early and often to develop and implement
comprehensive solutions and share learnings.
Challenge Ideas to leverage collective expertise, evaluate multiple alternatives and create
the best path forward.
Provide Clarity for expected outcomes, decision authority
and accountability.
Provide Feedback that is candid, actionable, independent of hierarchy and safe.

Inclusive Diversity & Equity values and leverages unique identities with equitable opportunity and rewards.

Collective Success is achieved through empathy and prioritizing enterprise outcomes ahead of individuals.

4 Allstate 2021 Environmental, Social and Governance Summary Our Shared Purpose, ESG priorities and oversight

ESG Priorities

Critical

Climate Strategy

Advancing Consumer Disaster Resiliency
Responsible Investment
Public Policy

Consumer-Centric and Responsible Products
Technology and Digitization

Community

Employment Relations
Employee Wellbeing and Safety

Inclusive Diversity (workforce and suppliers)
Privacy and Information Security
Talent Recruitment

SIGNIFICANCE TO STAKEHOLDERS

Employability Organizational Culture

Important

Important

SIGNIFICANCE TO ALLSTATE

Critical

Purpose Prosperity

People Planet

We believe that ESG
priorities should align
with Our Shared Purpose,
Transformative Growth,
and long-term enterprise
value creation.
To that end, we use a materiality assessment to focus ESG issues on the most significant to our stakeholders. Our 2020 assessment followed the best practice methodology of identifying, prioritizing, and validating material topics. In 2021, we supplemented our 2020 ESG materiality assessment with extensive stockholder outreach to foster dialogue on societal issues of importance. We further prioritize our efforts on ESG matters that are strongly aligned to Our Shared Purpose, brand, business, and risk and return profile.

We have prioritized three ESG issues in particular: climate, Inclusive Diversity & Equity, and data privacy.

Climate change impacts customers and shareholders. Our business success depends on effectively modeling, pricing, and managing climate-related risk, developing products and services to address climate change and supporting public sector programs to remediate the impacts of more severe weather.
Inclusive diversity & equity (IDE) practices foster a workplace culture that supports our Transformative Growth strategy. An inclusive culture that fosters long-term attraction and development of diverse talent is necessary to meet diverse customer needs. IDE is integrated into our business via policies, processes, and decision-making.
Data privacy protects customers and is a growth opportunity. Protecting data and sensitive information is important to maintain trust in the Allstate brand. Allstate provides identity protection products to millions of customers, which empowers them with more control over their personal data.

5 www.allstatesustainability.com
Our Shared Purpose, ESG priorities and oversight

ESG Oversight
Allstate has a history of strong corporate governance guided by three primary principles: dialogue, transparency, and responsiveness.
Our Board of Directors (Board) is fully engaged in the oversight of Allstate’s strategy, operating results and ESG initiatives. The Board believes that strong, independent leadership is a critical aspect of effective corporate governance. At the time of the 2022 annual meeting, there will be 11 directors, 10 of whom are independent and 6 of whom bring gender or ethnic diversity.
Board of Directors
The Board believes sustainability benefits Allstate's stakeholders and drives long-term value creation. The Board has responsibility for ESG oversight with semi-annual reviews.
Nominating, Governance and Social Responsibility Committee The nominating, governance and social responsibility committee supplements the Board’s semi-annual ESG reviews.
The chief legal officer and general counsel provides regular updates on ESG matters.
Additionally, other Board committees focus on specific components of the ESG strategy. The risk and return committee reviews climate change risk, the compensation and human capital committee reviews organizational health
and other human capital management practices, and the audit committee reviews data privacy and cybersecurity.
Chief Legal Officer and General Counsel Our chief legal officer and general counsel works with leadership from across the company to guide Allstate's corporate responsibility and sustainability efforts and reports monthly to the nominating, governance and social responsibility committee on the company's ESG progress as well as provides periodic updates to the full Board.
The Allstate ESG Steering Committee
Allstate has maintained an ESG Steering Committee (formerly the Sustainability Council) since 2007. This crossfunctional team supports Allstate’s commitment to environmental, health and safety, corporate social responsibility,
human capital management, corporate governance, sustainability, and other public policy matters.
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. The committee is comprised of individuals from strategy, finance, financial products, technology, marketing, innovation and corporate brand, enterprise risk and return management, human resources, legal, investments, property-liability, and protection products and services.
The ESG Steering Committee has established three working groups on climate, IDE and data privacy to drive thought leadership and progress throughout the organization.

The Responsible Investing Committee
The Responsible Investing Committee monitors investing trends, evaluates best ESG practices and
is integrated with the ESG Steering Committee. In conjunction with Allstate’s Investments Risk Committee, the Responsible Investing Committee also reports on ESG investment performance and monitors our investment portfolio for potential exposures to
climate change.

The Sustainability Team
The Sustainability team develops the annual Sustainability Report, responds to ratings and rankings
questionnaires, drives employee awareness and engagement with corporate sustainability initiatives. It
reports regularly to the ESG Steering Committee.

6 Allstate 2021 Environmental, Social and Governance Summary ESG goals and achievements

ESG goals and achievements

Please see our ESG data online.

Climate

GOALS FOR THE FUTURE
• Continue to evaluate setting greenhouse gas (GHG) emission reduction science-aligned targets, including a new target for operating emissions:
– Reduce owned building location-based GHG emissions 50% from a 2019 baseline by 2024. This includes National General owned offices.
– Transition to 100% hybrid vehicles by 2025.
– Achieve green or healthy building certification for 10% of new office designs by 2025.
– Transition power used at 40% of owned facilities to 100% renewable energy through renewable energy credits (RECs) and carbon offsets by 2030.
– Centralize waste collection prevention across all new locations and 100% of existing locations by 2023.
• Expand Task Force on Climate-Related Financial Disclosures (TCFD) report to reflect work done on emissions targets.

Responsible Investing

• Expand climate-related investment capabilities and relationships, targeting at least $375M in commitments between 2021 and 2022.
• Maintain trading volumes at least 2x 2020 levels (% of total volume) with minority, women and veteran business enterprises.
• Target $180M in new commitments with diverse investment sponsors and managers in 2022, nearly 3x historical annual average.
• Target at least $300M in new commitments to low-income housing tax credits during 2022.
• Continue to increase the percentage of the portfolio allocated to responsible investments from 11.1% at year-end 2021.

PAST ACHIEVEMENTS
• Reduced absolute energy use 20% within owned portfolio against 2007 baseline by 2014, 6 years ahead of schedule. – Reduced consumption by consolidating office space, recapturing heat in data center operations, and using energy-efficient equipment and systems. – Shift to home-based and hybrid work reduced overall energy consumption at all locations.
• 100% of the power used at our Northbrook, Illinois, headquarters and our Irving, Texas, office qualifies for renewable energy certificates.
• As of year-end 2021, converted 50% of automobile fleet to hybrid vehicles.
• Began offering paperless billing and up to a 10% discount for customers who went paperless. In 2020, 61.6% of claim payment transactions were digital, up 19% from 2019.
• Engaged CDP Supply Chain to help us measure and manage suppliers’ environmental impact and asked our largest vendors to set emissions reduction targets and submit/disclose data to CDP.
• Published first report using the recommendations of the TCFD.
• Established a dedicated impact portfolio for investments in businesses that can address Inclusive Diversity & Equity and climate risk while generating attractive risk-adjusted returns.
• Set exclusions/standards across overall portfolio such as excluding majority ownership in companies that operate a coal or other mine or that predominantly conduct business in the civilian firearms industry.
• Invested $7.2B in responsible investments as of year-end 2021, including education, sustainable and affordable housing, health care, green bonds, diverse sponsors, and renewable investments.
• Increased our trading with minority, women and veteran business enterprises more than tenfold of historical volume during 2021, representing 3.6% of total trading volume.

7 www.allstatesustainability.com ESG goals and achievements

GOALS FOR THE FUTURE

• Keep employee engagement score at the industry top quartile across demographic classifications.

• Drive skills-based hiring without degree

Human

requirements.

Capital

• Acquire and develop talent with digital

Management

capabilities to enable Transformative Growth strategy.

• Improve employability for all team members.

PAST ACHIEVEMENTS
• Integrated business requirements with employee choice, resulting in an approximately 65% home-based, 29% hybrid, and 6% officebased workforce.
• Minimum U.S. based compensation increased in 2022 to $17/hour and $20/hour, based on geographic differentials, the second increase in the last two years.
• 54% of all new hires in 2021 did not have a 4-year bachelor's degree.

Inclusive Diversity & Equity (IDE)

• Increase female and racially and/or ethnically

• Maintained inclusive diversity index scores in

diverse representation across officers,

mid-80’s from 2018-2021.

management, and employees.

• Optional IDE course completion increased 257%

• Measure Allstate’s culture of inclusivity via Inspire in 2021.

survey. In 2022, expand IDE-related survey questions to measure culture of employee belonging; equal opportunity regardless of background; senior leadership commitment to addressing inequity; and Allstate’s commitment to IDE as a company.
• Double spend with diverse suppliers within five years, or $470M by 2025.

• Since 2004, tripled annual spend with diverse suppliers to $5.3B. In 2021, spent over $366M with diverse suppliers, significantly over 2020 spend of $235M.
– Allstate’s efforts with diverse suppliers created over $680M of economic impact in the community. A recent analysis indicates that $1 spent with our diverse suppliers drives

• The Allstate Foundation plans to contribute

$1.97 in total economic production.

$7M to the advancement of racial equity, in addition to other signature causes of youth empowerment and relationship abuse.

– In 2021, Allstate’s supply chain partners included 2,000 diverse suppliers.
– Held a virtual Annual Supplier Diversity

Exchange in 2021 with over 600 attendees.

• The Allstate Foundation added advancing racial equity as a focus area, leveraging success in youth empowerment and helping victims of domestic violence.

• Issued $1.2B in bonds using minority, women and veteran business enterprises.

• Provided capital to benefit communities, like low-income housing tax credits ($1.3B of book value as of 2021).

8 Allstate 2021 Environmental, Social and Governance Summary climate change

climate change
Climate change is one of the most critical challenges threatening
customers, businesses and communities.

More information • ESG data online • CDP answers • TCFD report

Global warming has increased the frequency and severity of severe weather. This creates additional risks for customers and shareholders, but also offers opportunities to leverage Allstate’s capabilities and support proactive public policy initiatives.

Climate Risk Management
Allstate’s business viability depends on effectively modeling, pricing and managing risks, including risks related to climate change. We manage climate risks within our integrated Enterprise Risk and Return Management (ERRM) program, which applies risk-return principles, modeling and analytics, governance, and transparent management dialogue to understand the company's highest-priority risks.
Risk Identification
We have identified the following climate change risks: Insurance risk: An increase in severe weather events has raised loss costs for homeowners insurance, requiring risk management actions such as changes in pricing, product coverages, geography, underwriting practices, and reinsurance utilization. We expect that the impacts from climate change will continue to be concentrated in property insurance.
Investment risk: We employ some of the same practices from underwriting and modeling climate risk within the investment portfolio. We consider potential environmental and severe weather risks when we make investments. We have limited exposure to sectors with higher climate risk, including oil, gas and coal production, airlines and airports, and commercial real estate with higher catastrophe risk. Additionally, ESG considerations and climate-specific metrics are incorporated into our asset management decisions.
Reputational risk: Climate change is important to internal and external stakeholders and we collaborate through external partnerships and public engagements.

Risk Assessments
Allstate’s Catastrophe Modeling and Analytics team and pricing groups assess climate change information and establish pricing, underwriting, concentration and coverage standards. The team uses information from the Intergovernmental Panel on Climate Change (IPCC), the U.S. Global Change Research Program (USGCRP) and the Actuaries Climate Index (ACI). The IPCC and USGCRP evaluate research by climate scientists around the world and conduct reviews to provide information to decision-makers. The Responsible Investing Committee and the Investments Risk Committee assess investments for potential short- and long-term exposures to climate change.
Risk Mitigation
The ACI measures extreme weather and sea level increases through quarterly updates. The Catastrophe Modeling and Analytics team monitors statespecific risks and competitors' actions and partners with the Investments to model mortgage and real estate portfolios. We incorporate the outcome of the assessment into decision-making to balance risk and return.
Risk Monitoring and Reporting
Through Sustainability and TCFD reports, we report on progress in mitigating climate change.

9 www.allstatesustainability.com responsible investing
responsible investing
As of December 31, 2021, we managed a $65 billion investment portfolio and actively evaluated how ESG issues influence investment performance.
Our investment analysis and decision-making processes have increased the focus on ESG and responsible investing in the past three years. We have established climate change and Inclusive Diversity & Equity (IDE) as two pillars critical to investments.

BROAD PORTFOLIO
Build limitations/structure/ analytics, as appropriate, into the portfolio that will mitigate allocations that negatively impact our ESG goals.
To date, we have:
• Reduced energy sector weight in corporate credit benchmark by half.
• Excluded majority ownership in companies that operate a coal or other mines.
• Excluded companies that predominantly conduct business in the civilian firearms industry.
• Added an ESG scorecard that is reviewed as part of approval process for all new direct private deals.
• Incorporated ESG considerations into credit analysis, where available.
• Do not invest in, or do business with, any entity included on the sanctions list of the Office of Foreign Assets Control. Allstate holds no existing direct investments in Russia, nor will we make any new ones.

IMPACT SUB-PORTFOLIO
Invest in solving societal problems in a targeted manner while achieving attractive returns.
To date, we have:
• Allocated $240M in 2021 to climate-related investments.
• Allocated $408M in 2021 to lowincome housing tax credits.
• Increased investment of capital across energy transition theme.
• Actively managed our agriculture and timber portfolio.

OTHER ACTIVITIES
Align investments so they support our ESG goals.
To date, we have:
• Established IDE as a key pillar to guide responsible investments.
• Created an Investments Inclusive Diversity & Equity Council.
• Utilized minority, women and veteran owned firms for our $1.2 billion bond offering.
• Increased trading volume with minority brokers.

10 Allstate 2021 Environmental, Social and Governance Summary human capital management

human capital management

More information • Speak Up Process • Working at Allstate

We are building a purpose-driven company powered by purpose-driven people.
Allstate’s employees and agents are essential to achieving Our Shared Purpose. Human capital management focuses on employee selection, retention and talent development to create an inclusive, diverse and equitable culture. We strive to motivate employees and harness their diverse perspectives through leading employment practices. This employability is enhanced with training, mentoring and investing in professional growth.

Organizational Culture
At Allstate, we define culture as a self-sustaining system of shared values, priorities and principles that shape beliefs, drive behaviors and influence decision-making within an organization. Our Shared Purpose comes to life through an unwavering commitment to shared Values, Behaviors and Operating Standards.
Employee Well-Being & Safety
To be an employer of choice, we prioritize employee well-being, devoting resources to health and safety. The Future Workplace initiative integrates business requirements with employee choice, resulting in ~ 65% home-based, 29% hybrid, and 6% office-based employees. Resources are devoted to occupational health and safety and benefit programs to support employees’ physical health, financial security, personal well-being and work-life integration.

Talent Recruitment and Management
Providing employees with rewarding work, professional growth and educational opportunities improves business outcomes, morale and engagement. Allstate’s talent strategy is focused on expanding digital capabilities, agile leadership, diversity and providing choice on work environment. A remote, digitally enabled workforce makes it possible for Allstate to recruit talented people wherever they live.
Inclusive Diversity & Equity (IDE)
The broad diversity of our workforce makes us a better company. At Allstate, every voice counts. We work smarter, meet customer needs more effectively, share better, and identify more innovative ideas by leveraging our unique individual characteristics, backgrounds, experiences and perspectives. A comprehensive review of operating practices, pay and promotions for people of color and women was done in 2021 to further promote equity and equality. IDE training, resources and programming for employees was also significantly increased.

Organizational Culture
The Enhanced Organizational Capabilities (EOC) initiative will expand the knowledge, skills and experience of leadership, employees, agents and external partners to execute the Transformative Growth strategy.
In 2022 we will:
• Enhance the enterprise recognition and rewards program to motivate and inspire employees. • Introduce a Customer Retention and Growth bonus of $2,000 to $4,000 for over 30,000 eligible employees for
achieving property-liability unit growth goals. • Use workforce analytics to dynamically align skills to highest priority issues, focus talent development and acquisition,
and deploy talent efficiently. • Focus on Our Behaviors and culture change, including decision-making and feedback, and refresh the Employee
Value Proposition.

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Allstate s 2021 Environmental, Social and Governance Summary