Supply Chain Sustainability

As a services company, the environmental and social impacts and risks in our supply chain are relatively minor compared to the industrial or manufacturing sectors. Nevertheless, we insist that our suppliers adhere to the same strict standards that we set for ourselves. We also build partnerships throughout our supply chain to further Allstate’s sustainability priorities.

Allstate’s Sourcing and Procurement Solutions Department identifies environmentally responsible opportunities with the company’s supply chain streams, and encourages business partnerships with suppliers who implement environmental policies of their own. Our procurement representatives purchase recyclable, recycled and refurbished products and materials whenever these products are available, economical and suitable. For example, we ensure that 90 percent of our paper purchases meet leading certification standards, and we have several programs in place to responsibly dispose of ink cartridges and computers.

We currently do not incorporate specific requirements in our supplier contracts, but we do expect all of our suppliers to operate in an ethical fashion and adhere to all national and international laws and standards before they can do business with Allstate. In addition, we require some suppliers, like our auto body shops, to provide certification that they have completed proper safety and pollution training.

We also conduct occasional on-site visits for our key suppliers. For example, when we visit repair shops that are part of the Good Hands Network — which includes 3,500 prequalified repair shops across the country — we observe shop behaviors and are on the lookout for safety hazards. If risks are identified, the shop is asked to immediately correct them.

In the future, we will strengthen our policies on sustainable procurement to guide both our internal and external procurement decisions.

We will also continue to proactively ensure that our suppliers are investing in sustainable business practices such as energy-, emissions- and paper-reduction efforts as well as community involvement activities. Suppliers are asked to report such efforts to us on an annual basis.

To learn more, visit our Supplier Code of Conduct.

Supplier Diversity

Small and diverse businesses are the engine of the American economy, generating economic growth, jobs, training and innovation. To help support such companies, Allstate established a program in 2004 that actively seeks out diverse suppliers and invites them to compete for our business.

The program is led by a dedicated full-time, senior-level executive, and integrated across all levels of the company. When procurement spend opportunities arise, Allstate managers scan the marketplace for qualified (well-established and financially stable) diverse suppliers and urge them to investigate the opportunity with Allstate. If the suppliers accept, they enter Allstate’s rigorous procurement spend process alongside all competing vendors. And if they win, they win on merit.

To further broaden our diverse supplier base, Allstate hosts annual Supplier Diversity Exchanges, face-to-face sessions bringing diverse companies and Allstate buyers together. More than 56 business contracts have been initiated as a result of these events.

In 2011, we launched a 12-month mentoring program for diverse business owners. The program helps diverse business owners through a series of live and virtual sessions focused on leadership and employee development, financial management, sales and marketing, and technology improvement. The goal is to help these suppliers scale up their operations in order to be able to compete on a national, corporate-wide level.

In 2011, Allstate spent $244 million with nearly 2,000 businesses owned by minorities, women, veterans, or members of the LGBT community. This represents 5.9 percent of total supplier spend. Our goal is to increase this percentage to 9 percent by 2015.

Our greatest challenge is finding suppliers that can scale their services or products to meet our needs nationwide. So a main focus of our mentoring program involves giving suppliers the knowledge and resources they need to be able to compete and deliver on a corporate scale. In response to another challenge — that incumbent suppliers often have an advantage — we’ve expanded our procurement team dedicated to seeking out diverse businesses.

Allstate’s diverse supplier strategy creates healthy competition for the goods and services we buy. It also helps small and diverse businesses grow. Those companies, in turn, provide jobs and services that strengthen communities, create wealth for others and, eventually spur greater demand for our products.

Allstate uses criteria established by the United States Small Business Administration (SBA) to define and target “diverse” suppliers. We evaluate progress by measuring our targeted spend in the first three of the 12 categories listed below.

We also measure our inclusive spend in all 12 categories identified by the SBA as diverse and of special interest in meeting statutory obligations. These include:

• Minority/Women Owned Business Enterprise (M/WBE)
• Minority-Owned Business Enterprise (MBE)
• Women-Owned Business Enterprise (WBE)
• Disabled Business Enterprises (DIS)
• Disabled Veterans Business Enterprises (DVET)
• Disadvantaged Business Enterprises (DBE)
• Historically Black Colleges or Universities (HBCU)
• Historically Underutilized Business Zone (HUB Zone)
• Small Business Administration 8(a) Program (SBA8(a))
• Small Disadvantaged Business Enterprise (SDB)
• Veteran-Owned Business Enterprise (VET)
• Small Business Enterprise (SBE)
• Gay Lesbian Bisexual Transgender-Owned Business Enterprises (GLBT)

Memberships Related to Supplier Diversity

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

• National Minority Supplier Development Council
• Women Business Enterprise National Council
• National Hispanic Corporate Council
• Department of Veteran Affairs Center for Veteran Enterprise
• National Gay and Lesbian Chamber of Commerce
• United States Hispanic Chamber of Commerce