We consider ESG factors in our investment policies, analysis, decision-making and monitoring processes.

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.

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.
• 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.
• 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.