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11

Environmental and Social Responsibility

Our commitment to sustainability and corporate responsibility spans many aspects of our business, most notably our approach towards climate change, our investment management practices, our human capital management and our community engagement.

Climate Change

Climate change contributes to higher temperatures, sea level rise and more extreme weather events including droughts, heavy storms, wildfires, and stronger hurricanes. We do not manufacture products that produce carbon, nor do we otherwise meaningfully impact the environment through our operations. As the owner and operator of a diversified group of businesses in insurance, financial services and related sectors, however, we are exposed to risks that are exacerbated by climate change, in particular in our property and casualty insurance/reinsurance and municipal bond guaranty businesses. Accordingly, in our risk management processes, we consider the potential impact of the effects of climate change.

We also believe that we have an important role to play as a responsible corporate citizen on climate change matters. Our corporate philanthropy reflects our commitment to the environment.

Investment Management

Investing for total return is one of White Mountains’ core principles. Our investment management team seeks to maximize after-tax total returns over the long term while taking prudent levels of risk and maintaining a diversified portfolio.

The performance of our investment portfolio is an important component of our ability to grow intrinsic value per share. We believe that non-financial factors, including ESG factors, can impact investment returns. Accordingly, we consider these non-financial factors in our investment policies, analysis, decision-making and monitoring processes.

White Mountains maintains formal Investment Guidelines for all investment assets managed or administered by White Mountains Advisors, our wholly-owned investment management subsidiary. The Investment Guidelines address our investment objectives, policies, concentration limits and governance frameworks, as well as ESG considerations. The Investment Guidelines, including ESG matters, are established and reviewed annually by our Finance Committee and Board.

The field of ESG-oriented investing is changing rapidly, and we regularly evaluate our approach to ESG considerations. Our current approach is as follows:

  • For investment assets actively managed by White Mountains Advisors, we conduct thorough credit risk assessments, utilizing nationally-recognized statistical rating organizations’ (NRSROs) research and ratings. Our Investment Guidelines prohibit investments in (i) companies whose primary business is the manufacturing of tobacco products and (ii) utilities that derive at least 30% of generation from thermal coal.
  • For actively managed investment assets sub-advised to third-party investment managers, we only utilize managers who incorporate ESG in their investment processes.
  • For alternative investment assets managed by third-party investment managers, we maintain an active dialogue with managers around ESG matters.
  • We typically make US common stock investments through passive vehicles, including broad-market exchange traded funds (ETFs). When doing so, our investment criteria include low tracking error, low expense ratios and ample liquidity. ESG-oriented ETFs are emerging investment vehicles that do not currently meet our criteria for passive vehicles. However, we will continue to monitor their suitability going forward.

Human Capital Management

Our strength lies in our people, and we proactively support each employee’s well-being and development. Our Board receives periodic updates on employee satisfaction and concerns and interacts with employees at all levels of our organization. We have an inclusive, team-oriented culture. All employees are treated with respect. We are committed to the long-term development of our workforce and the cultivation of our next generation of leaders.

Diversity and inclusion
We value diversity of backgrounds, experiences and ideas, which we believe fosters more robust discussions, stronger collaboration and better performance. We therefore seek to attract, retain, develop and advance a diverse talent pool.

White Mountains and its subsidiaries are equal opportunity employers as outlined in our parent company’s Equal Opportunity Employment Policy. Under the guidelines of our Code of Business Conduct and our Employee Handbook, we are committed to cultivating a culture in which all employees are treated with respect. Our parent company Americans With Disabilities Act Policy affirms our commitment to the support of and non-discrimination against disabled employees. Our parent company Harassment and Discrimination Policy clearly outlines prohibited behaviors, complaint/investigation procedures and our non-retaliation policy. We reinforce our guidelines of professional and respectful behavior through training requirements, including sexual harassment training.

Our Board has disclosed its intention to add a racially or ethnically diverse member by the end of 2022. Separately, for every open position at the parent company, we require that a diverse slate of candidates be considered.

White Mountains also supports diversity and inclusion through our parent company community engagement. We align a portion of our charitable giving to high-quality organizations focused on these issues. For more information about our community engagement, please click here.

Working at White Mountains
At our parent company, we maintain several policies and programs to support human capital development and employee well-being. Our Board is actively involved in these human capital development efforts.

Below are some of the key ways in which we support our people. Our Employee Handbook serves as a resource to employees as they navigate these resources and others.

  • Benefits. White Mountains offers employees a generous benefits package, including a selection of health insurance benefits, dental and vision plans, FSA/HSA, life/AD&D insurance as well as short- and long-term disability insurance. We also provide employees and their household members with free access to our Employee Assistance Program, which can address a wide range of personal, family and workplace concerns.
  • Time off and leave. White Mountains generous and flexible policies with respect to maternity, paternity, adoption personal leave and flexible time off.
  • Training and skill development. The ongoing training and development of our employees is a key priority for White Mountains. We organize periodic training programs to enhance our team’s hard skills, soft skills and institutional knowledge. Our mentoring program encourages new relationships and additional career support opportunities among our employees. Through our Education Assistance Policy, we offer funding for the professional development of our employees, so that they can maintain and improve job-related skills.
  • COVID-19 response. Throughout the unique challenges of the COVID-19 pandemic, our commitment to the health and safety of our employees and their families has been our guiding priority. To support our employees during this time, we expanded and encouraged remote work, introduced protocols and practices that emphasized employee well-being, regularly solicited feedback from our employees and significantly increased senior leadership communication. We have codified our policies in the COVID-19 Addendum to our Employee Handbook.

In The Community

White Mountains is committed to the communities in which we live and work. Our parent company Community Engagement Program follows the lead of our employees in supporting a wide range of causes through employee matching gifts programs, local volunteering events, in-kind donations and our Giving with Impact initiative, where employees pitch transformational charities for White Mountains grants.

Although our mandate for charitable giving is broad, we have prioritized a few key areas in recent years. We have supported environmental sustainability and conservation as well as efforts to promote diversity and inclusion. Finally, in response to the profound toll that COVID-19 has taken on our communities, we launched a dedicated COVID-19 Matching Gifts Fund and contributed to several organizations focused on food security during the pandemic.