We leverage our purchasing power—representing more than $4.9 billion in annual procurement—to encourage suppliers to join us in safeguarding the environment, nurturing diverse talent and supporting our communities.
We believe every impact matters. So, while the environmental and social impacts and risks in our supply chain are relatively small compared to those of industrial or manufacturing companies, we require our suppliers to adhere to the same strict standards we set for ourselves. We also build partnerships throughout our supply chain to further our
We do not currently incorporate specific requirements in all supplier contracts; however, we do include environmental safety language in the contracts of certain vendor categories, and sustainable practices are taken into consideration while evaluating suppliers during the sourcing process. We expect all of our suppliers to operate in an ethical fashion and adhere to all national and international laws and standards as requirements for doing business with Allstate. In addition, we require some suppliers, such as auto-body shops, property management companies and cleaning service companies to provide certification that they have completed proper safety and pollution training.
In 2014, we will aggressively work to incorporate sustainability practices into all facets of our internal and external procurement processes. For example, we will add sustainability language to more vendor contracts, and include a sustainability component on the scorecard that our procurement team uses to evaluate potential vendors. We will continue to proactively encourage our suppliers to incorporate sustainable business practices such as energy-, emissions- and paper-reduction efforts. As a result, suppliers are asked to report such efforts to us each year. To learn more, visit our Supplier Code of Conduct.
Reaching inclusive diversity goals
This year, we made significant progress toward our supply chain diversity goal, increasing the amount Allstate spends with diverse businesses from 6.6 percent in 2012 to 8.3 percent in 2013. We expect to reach our long-term goal of 9 percent in 2014, a year ahead of schedule. The growth has come at a time when Allstate’s annual procurement spend has been declining, indicating the strong commitment our management team has made to diverse spending.
We now work with more than 8,500 diverse suppliers as defined below:
We evaluate progress by measuring our targeted spend in the first five categories listed below and the LGBT community. We also measure our inclusive spend in all 12 categories identified by the Small Business Administration (SBA) as diverse and of special interest in meeting statutory obligations. These include:
- Minority/Women Business Enterprises (M/WBE)
- Minority-Owned Business Enterprises (MBE)
- Women-Owned Business Enterprises (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 Enterprises (SDB)
- Veteran-Owned Business Enterprises (VET)
- Small Business Enterprises (SBE)
- Gay Lesbian Bisexual Transgender-Owned Business Enterprises (GLBT)*
* Additionally, Allstate includes businesses certified by the National Gay and Lesbian Chamber of Commerce (NGLCC) as owned by a member of the GLBT community.
Building ties with diverse groups through memberships
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’s Business Enterprise National Council
- National Veteran-Owned Business Association
- National Gay and Lesbian Chamber of Commerce
- United States Hispanic Chamber of Commerce
- United States Pan Asian Chamber of Commerce
Developing the next generation of diverse suppliers
Our goal is to find diverse suppliers with the scale and capability to meet our needs, so we work closely with emerging suppliers to help them reach critical mass. Our mentoring program is giving suppliers the knowledge and resources they need to compete and deliver on a scale to meet the needs of large corporations like Allstate.
For instance, in 2013, we began a partnership with Chicago’s Office of the Mayor and the Illinois Office of the Governor in the Illinois Science and Technology Coalition, which seeks to identify entrepreneurial talent in Illinois. This year the Coalition screened more than 200 entrepreneurs whose businesses fit our priorities in customer organization, data and analytics, and connected car and home technologies. From this pool, it flagged 16 finalists, and 13 of these companies were invited to Allstate for a final round of interviews. Allstate’s team then winnowed this list to six companies. One of the 13 companies has also been selected for additional mentoring, since it has promising business models but needs additional coaching to reach its potential. Through this process, we have identified two new potential minority-owned suppliers—one that is ready for partnership now and another that will require additional mentoring.
Through its partnership with the Illinois Science and Technology Coalition, Allstate offers emerging companies the chance to become partners, supplying goods and services that match our business needs. We also bring our investment team into contact with these entrepreneurs, providing an avenue for raising seed capital to grow their companies. And finally, we offer mentoring and training, so that very small businesses with great ideas can build the scale they need to join our network of suppliers.
The mentoring program is especially valuable since it connects experts from throughout Allstate, as well as some of our top minority-owned partners, with owners of emerging businesses. In addition to offering formal curriculum covering various aspects of business management, the mentoring program enables entrepreneurs to connect, one-on-one, with business leaders in Allstate’s network.
National recognition for diversity
Allstate’s supplier diversity programs garnered national recognition this year. In February 2014, we were named to The Women’s Business Enterprise National Council’s annual list of America’s Top Corporations for Women’s Business Enterprises. The award honors corporations with leading supplier diversity programs that are breaking down barriers and proactively integrating women’s business enterprises into their supply chains.
In addition, Allstate was one of three finalists for the National Gay and Lesbian Chamber of Commerce’s 2014 Financial Services Diversity Leadership Awards, which recognize outstanding achievements in diversity and leadership in the financial services sector. The award recognizes corporations with exemplary employment policies, marketing initiatives, philanthropic endeavors, and procurement inclusion of LGBT people, women, persons with disabilities, and racial and ethnic minorities.
In 2013, Allstate was named California’s Supplier Diversity Champion by the California Department of Insurance for its efforts in the support and development of legislation (AB53) designed to promote the engagement of diverse businesses by insurance carriers in the state.
Promoting environmentally sound practices
In addition to promoting diversity, Allstate seeks to reduce its environmental footprint through its supply chain. For instance, we hold the auto repair shops in our Good Hands Repair Network to industry-leading standards for environmental impact, including a requirement that suppliers recycle all glass. We also have sustainability language written into all contracts with cleaning, property management and auto parts vendors.
The year ahead will be a pivotal one for Allstate’s supply chain group, since we are striving to reach our long-term goal for supplier diversity in 2014. By the end of 2013, we were spending 8.3 percent of our total procurement spend on diverse suppliers, and we are hopeful we can raise this amount to 9 percent by the end of 2014, a year ahead of target.
As we near that milestone, we will begin to assess other ways in which Allstate’s supply chain group can have a positive impact. We are currently working to expand and fortify the procurement program so it includes sustainability language in all vendor contracts. This will help us to further integrate sustainability into all facets of the procurement process.
We are also looking at ways to quantify our procurement department’s impact on local economies, businesses and communities.