How Allstate transformed its workforce—and its carbon footprint—by selling its headquarters

The insurance company sold its Chicago-area campus in 2022, adopting a new working style while reducing costs, carbon dioxide emissions, and waste. 

For 50 years, Allstate called a 232-acre campus in Northbrook, Ill., home. The headquarters near Chicago was so large it had a barber shop, a pharmacy, and a doctor’s office. In November 2021, the company announced it had agreed to sell the 2 million square foot property for $232 million, allowing Allstate and the site’s 5,000 employees to embrace hybrid work and reduce their impact on the planet. 

Selling its largest office was a smart strategy: Major corporate offices are set to lose $500 billion in value by 2029 as the pandemic-driven shift to remote work has produced a glut of office space. 

But the sale also reflects an ongoing transformation at Allstate, one of the nation’s largest publicly traded insurers, and the innovation that distinguishes its history. Since its founding by Sears, Roebuck and Co in 1931, Allstate has worked to reduce risk. It made teen driving safer, advocated for automobile airbags, and has been measuring climate risk for more than 20 years. The company keeps evolving, and the Drucker Institute recently ranked it as one of the top five companies for innovation in 2022.

Allstate was quick to see that selling the headquarters could slash the environmental impact of employee commutes and reduce office utilities and costs, while giving employees more choice about where and how they work. “We’ve cut back from more than 400 offices—including our headquarters—to about 100,” says Jonathan Wentzlaff, corporate engineering manager at Allstate. “People really just need a touchdown space now—less of a full-blown office.”

Saving on more than a lease

Wayne Parrish, Allstate’s director of design and construction, points out that the company’s bold move also led to major savings on energy consumption, internet usage, and IT costs. Allstate redistributed much of its furniture—donating 67,500 pounds to schools, colleges, and charities—and recycled more than 2 million pounds. “Everybody just thinks about how you’re not paying a lease anymore,” says Parrish. “But there are soft benefits to closing offices.” 

The changes haven’t stifled the employee atmosphere in Chicago. Staffers now have the option to work from desks at several downtown offices, all accessible by public transportation. The office layouts have all the modern, collaborative features of a co-working space: huddle rooms, informal chat areas, acres of white boards, even a large dining room and kitchen space with a small amphitheater. “‘Energetic’ is the word I’d use to describe it,” Parrish says. “Our CEO, Tom Wilson, uses the term ‘beehive.’”

Allstate volunteers help move office supplies from the former Northbrook headquarters.Employee commutes are down drastically. Fewer daily commuters mean less auto emissions, and that significantly advances the company’s climate goals. Allstate is working to reduce that pollution even further, for example, by making its automobile fleet 100% hybrid by the end of 2022.

Judy Pines, sustainable procurement lead at Allstate, says the public can expect clear updates on progress as the business continues its eco-friendly, waste-reducing transformation. “To ensure transparency, organizations must measure, manage, and report on their sustainability performances,” she says.

Tech’s impact on the office evolution

Pines and her team had been working with HOBI International, Inc., even before the pandemic. It’s an IT and mobile asset management provider that helps brands safely recycle and dispose of tech devices without compromising sensitive information. As remote work took hold, Allstate employees needed optimized laptops and software to help avoid data breaches. Just receiving old equipment and shipping new equipment could have been a major emissions pitfall, but HOBI helped—ensuring staffers weren’t using unnecessary or outdated devices, which require more energy, and managing energy-efficient shipments to and from distributed employees.

Pines measured the results of efficiently swapping that technology. “Because we optimized our tech, energy savings captured in 2021 were equivalent to powering almost 5,000 U.S. households with electricity for one year, and air emissions were reduced by 250,000 metric tons,” she says. “Precious metals recovered during the tech recycling process can be reused rather than mining raw materials.” 

Karen Jarmoc, Allstate’s director of sustainability, notes that environmental work isn’t the only way companies can produce positive change. Social factors also matter, and home technology footprints (and expenses) differ at every house, depending on energy efficiency, local cost of living, and more. That means some less financially and socially privileged workers could be left behind. Today, with more than 90% of U.S. employees saying they prefer to work from home at least part time, forward-thinking companies like Allstate are looking at how to help make workers’ residential spaces eco-friendly. 

Setting and sticking to clear commitments

Sustainability efforts can lose momentum and public trust if they fail to measure the impacts of workforce evolutions, Pines says. That matters because consumers and employees say they’re significantly more likely to support companies that stand up for sustainability than those that don’t. Shareholders also are watching. “There is increased pressure from the investment community to support companies with good corporate and social responsibility programs,” Jarmoc says. In 2020, 85% of investors said they considered a company’s environmental, social, and governance (ESG) risk factors before investing funds, and about 10% found information they wanted in corporate disclosures. Allstate scores well in that regard and posts its performance on its sustainability website. The 2022 Transparency Awards ranked Allstate first among S&P 250 companies for its annual 10-K financial report and fourth overall for the quality of its disclosures.

Allstate is better able to understand its carbon footprint as a member of CDP Supply Chain, a global environmental disclosure platform that helps increase visibility and transparency into the supply chain. In 2021, CDP disclosure resulted in an estimated annual carbon dioxide savings of roughly $75 million and annual monetary savings from emissions reductions of $13.9 billion, according to Pines.

Many items, including kitchen equipment, were donated to local nonprofits.

With a smaller real estate footprint and other initiatives, Allstate is on track with global commitments to lower emissions and keep the public informed. Pines, Jarmoc, Parrish, and Wentzlaff acknowledge the challenge of that responsibility, but they advise other leaders looking to make changes to choose any small improvement and begin. “Just jump in and get started,” says Wentzlaff. “You’re not going to have all the answers immediately. It requires some work. It requires some research. But you’ll figure it out as you go.”