GRI-referenced content index

and cross-reference to TCFD framework

“As a company on the move, we take great pride in our commitment to be a socially responsible organization – one that makes a real difference in our communities, governs its actions with the utmost integrity and acknowledges the impact the environment has on our business. This is what it means to be a good corporate citizen, and these values are essential to our future success.”

John C. Roche  
President and Chief Executive Officer  
The Hanover Insurance Group, Inc.

 

 

 

Content index details

General disclosure 

Organization profile - GRI 102

102.1 - Name of the organization

The Hanover Insurance Group, Inc. (NYSE: THG)

The organization is sometimes referred to as "The Hanover" with this content index.

102.2 - Activities, brands, products and services

For a description, please see The Hanover Insurance Group, Inc.  Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”), Part I, Item 1 - Business.

102.3 - Location of headquarters

The Hanover Insurance Group, Inc.

440 Lincoln Street

Worcester, Massachusetts USA 01653

102.4 - Location of operations

See The Hanover Insurance Group, Inc. Form 10-K, Part I, Item 2 - Properties, page 32.

The Hanover’s significant operations are in the United States.

102.5 - Ownership and legal form

The Hanover is a publicly traded stock corporation (NYSE: THG) domiciled in the State of Delaware that operates through several property and casualty insurers and other subsidiaries. For a complete list of entities within the group, see Exhibit 21 of the Form 10-K. 

102.6 - Markets served

The Hanover offers its products exclusively in the United States. We are licensed to sell property and casualty insurance in all 50 states, as well as the District of Columbia and Puerto Rico. Throughout the United States, we actively market core commercial products in 50 states and the District of Columbia and personal lines policies in 20 states. See the “Lines of Business” section of Part I, Item 1 - Business, pages 4-15 in the Form 10-K.

102.7 - Scale of the organization

As of December 31, 2022, The Hanover had: (Form 10-K, page 16)

• Approximately 4,600 employees;
• 2022 revenues of $5.46 billion;
• 2022 net income of $116.0 million; and
• Shareholders’ equity of $2.35 billion

See GRI 102-4 and 102-6 above for information on scope and geography of operations.

102.8 - Information on employees and other workers

As of December 31, 2022, The Hanover had approximately 4,600 employees. All of our employees are at-will.

The Hanover does not collect data regarding temporary employees, as these individuals are employed by third-party staffing firms during their temporary employment. Permanent employee data is compiled and stored by workforce intelligence personnel.

Employee gender composition for all permanent employees:

• 59% female employees
• 40% male employees
• <1% undeclared

Employee regional breakdown for all permanent employees:

• Northeast: 2,564 employees
• Southeast: 404 employees
• Midwest: 1,245 employees
• West: 425 employees

Employment type for permanent employees is:

• Full-time female: 58%
• Part-time female: 1%
• Full-time male: 40%
• Part-time male: 0%
• Full-time undeclared gender: 1%
• Part-time undeclared gender: 0%

102.9 - Supply chain

The Hanover engages third-party suppliers to support our company strategy to provide specialized product and service capabilities through distinctive relationships with many of the best independent insurance agent and brokers in the country with a customer-driven focus. The Hanover Sourcing Procurement and Relationship Consultants Office contracts with approximately 1,400 suppliers, which represent all aspects of our personal lines, core commercial and specialty businesses, as well as various functions across enterprise-wide programs.

102.10 - Significant changes to the organization and its supply chain

None.

102.11 - Precautionary principle or approach

See the “Risks” section of Part I, Item 1 - Business (page 3) of the 2023 Form 10-K and the current “Risk Factors” section, Part I, Item 1A of the Form 10-K for a description of how The Hanover manages risk and applies the precautionary approach. 

The company has an appointed chief risk officer and utilizes a dedicated risk function.

See GRI 103-2 below for additional information on risk management and mitigation.

102.12 - External initiatives

The Hanover, in partnership with The Hanover Insurance Group Foundation, continues to expand our mission “to enact meaningful and positive change in the lives of underserved youth — and empower the difference makers who support them” through our four identified strategic funding priorities that address educational barriers, health and social determinants, workforce/workplace development and community safety. 

Our new online grant making platform has made our grants program more accessible and streamlined, enabling us to award more grants to established nonprofits that focus their efforts on expanding their reach and deepening their impact through proven and/or innovative approaches that align with   
our mission and at least one of our funding priorities in our key geographies. See the Foundation’s website for more information: Community impact | The Hanover Insurance Group 

In 2022, The Hanover distributed more than $1.8 million in grants, sponsorship, and matching gift contributions to non-profit organizations primarily in Massachusetts and Michigan. 

In addition, we continued our external impact through our volunteer commitments and service as leaders on non-profit community boards and leadership committees. The Hanover played a leadership role in the celebration of Worcester’s 300th anniversary as the lead sponsor and co-chair of the month-long celebration. Additionally, several company leaders served as major contributors to the success of the Worcester Homecoming that brought distinguished alumni back to the city for a targeted reinvestment and future development opportunities. 

Our employees rallied throughout the year with ongoing organized efforts of volunteerism and giving back. We had over 350 employees participate in Worcester and Howell’s Day of Caring, respectively. In addition, more than 200 employees supported the Worcester Tercentennial events that included a parade with a company float. Our business resource groups also worked together to execute a company-wide back to school drive. 

Additionally, in 2022 we launched our Business Resource Group (BRG) Impact Fund to further advance our inclusion, diversity and equity (IDE) efforts. The fund was developed to empower our BRGs to drive impactful IDE programing and community-driven initiatives. We distributed over $250,000  IDE-focused grants and sponsorships through our foundation and community relations team. 

We further strengthened our impact enterprise wide through our annual employee giving campaign. More than 3,700 employees, representing 82% of the company’s workforce participated in our annual  campaign in 2022, raising more than $1 million. In total, the campaign raised $1.5 million, including the matching contributions from The Hanover Insurance Group Foundation. The campaign benefited  countless individuals and families in need, providing support and services through non-profit organizations across the country. More than 88 United Way chapters and 1,900 nonprofit organizations nationwide benefited from these commitments. For additional information, see GRI 203-2.  

 

102.13 - Membership of associations

The Hanover and its employees play an active role in several industry associations related to the property and casualty insurance industry, including:

• Insurance Institute for Highway Safety, an independent, nonprofit scientific and educational organization dedicated to reducing the losses (i.e., deaths, injuries and property damage) from motor vehicle crashes.
• Insurance Institute for Business and Home Safety, an independent, nonprofit, scientific research and communications organization dedicated to building safety research aimed at promoting real-world solutions for home and business owners, helping to create more resilient communities.
• Insurance Research Council, an independent, nonprofit research organization that examines important public policy matters that impact consumers, insurers and policymakers.
• Insurance Information Institute, a non-profit organization dedicated to providing information on insurance for the benefit of consumers and others.
• The American Property Casualty Insurance Association (APCIA), an industry organization of the property and casualty market. Representing nearly 60% of the U.S. property casualty insurance market, APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers.

Strategy

102.14 - Statement from senior decision-maker

“At The Hanover we take great pride in our commitment to be a socially responsible organization – one that makes a real difference in our communities, governs its actions with the utmost integrity, and acknowledges the impact the environment has on our business. This is what it means to be a good corporate citizen, and these values are essential to our future success. ”

- Jack Roche, President and CEO

102.15 - Key impacts, risks and opportunities

See “Board’s Role in Risk Oversight,” page 19 in the 2023 Proxy Statement and see the “Risks” section of Part I, Item 1 - Business (page 3) and the “Risk Factors” section, Part I, Item 1A of the Form 10-K.

 

In addition to the financial resiliency described in more detail in GRI 201-2 below, sustainability presents The Hanover opportunities within our insurance business to both service the needs of our customers and enhance sustainability, including:

• A “Green Coverage” offering from our personal lines business that enables homeowners to request restoration work with environmentally friendly materials after a loss.
• A “Green Advantage” offering from our core commercial business that covers additional costs to restore green-certified buildings to current standards, to perform air quality testing, and to recycle debris.
• Sprinkler credits and loss control services to reduce hostile fires and water use.
• Safety and disaster preparedness materials via participation in and sponsorship of International Business and Home Safety; we also provide materials via our Loss Control Portal.

In addition, sustainability efforts afford us the opportunity to engage, attract, motivate and encourage the health of a diverse workforce, including the following programs (also highlighted on our Careers and Benefits page):

• On-site fairs at our main campuses to educate employees on how to reduce their carbon footprint through solar energy, composting, the use of sustainable products and more
• Numerous health and wellness program offerings
• Financial counseling to assist employee well-being
• Flexible work arrangements
• Volunteer opportunities to clean up and improve the community
• Promotion of local sourcing with activities such as a farmers market and local vendor fairs at our Worcester, Mass., headquarters

 

Ethics and integrity

102.16 - Values, principles, standards and norms of behavior

The Hanover’s Code of Conduct outlines our company’s expectations for business and professional conduct that is aligned with our values, principles and standards of behavior, not just legal and regulatory requirements. The Code of Conduct also helps us recognize and address ethical issues.

In addition, The Hanover’s vision, mission and values are embodied in our shared values of Collaboration, Accountability, Respect and Empowerment (CARE), which were adopted through a process that included a company-wide crowdsourcing campaign.

102.17 - Mechanisms for advice and concerns about ethics

The Hanover’s Code of Conduct outlines our company’s expectations for business and professional conduct that is aligned with our values, principles, and standards of behavior. By establishing our standards and expectations for conduct, the Code of Conduct also helps us recognize and address ethical issues. In order to ensure that each employee is familiar with these standards of behavior, avoids ethical issues and understands how to report concerns, The Hanover requires that all new employees be trained, and each employee biennially participate in a training course and annually certify compliance with the Code of Conduct.

We have an alert line maintained by an independent, third-party service for communicating anonymously and confidentially with the Board of Directors (the “board”), the audit committee, our general auditor and our chief legal officer.

The Hanover also maintains a webpage with information on how the board can be contacted directly.

Governance

102.18 - Governance structure

For a general discussion of the corporate governance structure of our organization, including committees of the board, please see “Corporate Governance,” pages 7-21 in the 2023 Proxy Statement or on our website.

Oversight of sustainability-related risks and opportunities is the responsibility of both the entire board and committees of the board. In general, ESG-related oversight is codified in the charter of the board’s nominating and corporate governance committee (NCGC); however, certain aspects of ESG are overseen by the compensation and human capital and audit committees. Oversight of issues related to human capital management, corporate culture and human capital development (including policies and practices relating to inclusion and diversity) are the responsibility of the board’s compensation and human capital committee and are contained in that committee’s charter. Additionally, oversight of the company’s risk management policies and procedures and data security and privacy are the responsibility of the audit committee and are contained in that committee’s charter.

Similarly, the board, directly or through its standing committees, oversees risks related to the company, including climate-related risks and other material ESG risks. The board regularly receives reports and presentations from key members of management, including the company’s CEO, chief financial officer,  chief legal officer, chief risk officer, chief information security officer, chief privacy officer, and chief actuary on matters which, in its or management’s view, merit attention from a risk management perspective, such as catastrophe risks, insured exposure aggregation levels, ex-catastrophe underwriting risk, reinsurance levels and creditworthiness of our reinsurers, the investment portfolio, legal, regulatory and compliance matters, capital considerations, growth plans, matters relating to human capital management, and other material ESG sustainability risks.

Climate-related opportunities, to the extent that they are material to the organization, are integrated into our business plans and strategy, and are overseen by the board as part of its regular review of The Hanover’s strategic objectives.

102.19 - Delegating authority

The board has oversight responsibility of the company’s executive leadership and their management of sustainability topics. The executive leadership team has established a cross-disciplinary management committee known as the Sustainability Council, which is headed by our EVP, chief legal officer, and comprised of leaders across the organization involved in ESG sustainability matters. The Sustainability Council has a formal written charter that establishes its mission to support the company’s ongoing commitments and initiatives related to ESG, corporate social responsibility, sustainability, and other policy matters relevant to the company and its stakeholders. The council assists the company in:   
(a) developing general strategy relating to ESG sustainability matters, (b) creating, implementing, and monitoring initiatives and policies based on that strategy, (c) the drafting and coordination of communications with employees, investors and other stakeholders with respect to ESG sustainability matters, (d) monitoring and assessing developments relating to, and improving the company’s understanding of ESG matters, and (e) efficient, timely and accurate disclosure of sustainability matters to internal and external stakeholders. The primary charge is one of oversight, such that  
the primary responsibility and ultimate decision-making with respect to the company’s underlying programs and policies remains with the senior executives, business units and functions currently responsible for such matters.

102.20 - Executive-level responsibility for economic, environmental and social topics

See disclosure in GRI 102-19 above and GRI 102-32 below.

102.21 - Consulting stakeholders on economic, environmental and social topics

Input from stakeholders, including our insureds, independent insurance agents and brokers, the community, employees, regulatory bodies, investors, industry associations, and suppliers are critical to The Hanover’s success, and many of our sustainability priorities come from interactions with these groups. Investor relations facilitates investors’ conversations with The Hanover’s executive leadership team and the board. See GRI 102-53 for investor relations contact information. In addition, see the “Shareholder Engagement” and the “ESG, Sustainability and Corporate Responsibility” sections on pages 19 and 20-22, respectively, of the 2023 Proxy Statement.

See GRI 102-17 on means provided to facilitate communications directly to our board.

102.22 - Composition of the highest governance body and its committees

See the “Corporate Governance” section, pages 7-21, and in particular the “Board Profile and Diversity” sub-section, pages 11-12, in the 2023 Proxy Statement. 

All our directors other than the CEO are independent. As of 12/31/22, four of our 11 independent directors are female and two of our 11 independent directors are people of color.

102.23 - Chair of the highest governance body

See “Board Leadership Structure,” page 13 in the 2023 Proxy Statement. The chair of the board is not an officer or employee of the company and is independent.

102.24 - Nominating and selecting the highest governance body

See “Consideration of Director Nominees,” pages 16-17 in the 2023 Proxy Statement.

102.25 - Conflicts of interest

See “Related-Person Transactions,” pages 9-10 in the 2023 Proxy Statement.

Matters that pose potential conflicts of interest for all employees are assessed as part of our annual Code of Conduct certification process. See GRI 102-25 above for more information. The results and any significant findings identified as part of the Code of Conduct certification process are reported to the board on an annual basis.  
 

In addition, each member of the board and each of our executive officers is required to complete a director/officer questionnaire on an annual basis. This questionnaire requires disclosure of board memberships, related party transactions, and conflicts of interest with our independent accountants and compensation consultant, among other topics. As of 12/31/2022, we have no cross-board or controlling shareholders or related-party transactions requiring approval or disclosure.

102.26 - Role of highest governance body in setting purpose, values and strategy

See GRI 102-18, 102-19 and 102-32.

102.27 - Collective knowledge of highest governance body

The NCGC maintains a comprehensive skills and experience matrix for evaluating the background and skill set of the board on both an individual director and collective basis. The matrix details the key competencies, demographic information, and outside public company board, committee, committee chair and CEO experience. The NCGC tracks each director’s level of current and developing expertise across the key competencies for the board to ensure that it can effectively oversee the long-term success of the company and to align with the company’s goal of being a premier property and casualty company in the independent agency channel. The categories of key competencies include, among other things: property and casualty insurance (beyond company board service), senior management, financial services, finance/accounting, investments/capital markets, technology, and governance. The board seeks director candidates whose skills, experience, and expertise can augment the key competencies that the company has identified. The matrix is also designed to track diversity measures.

102.28 - Evaluating the highest governance body’s performance

See “Nominating and Corporate Governance Committee,” page 16 in the 2023 Proxy Statement for an overview of how the Board evaluates its performance. In addition, the election of directors is subject to a vote by our shareholders, making each director accountable to our shareholders.

102.29 - Identifying and managing economic, environmental, and social impacts

See GRI 102-18 and 102-19 above.

102.30 - Effectiveness of risk management processes

For underwriting risk management processes, see GRI 103-2. Enterprise Risk Management, in coordination with the Sustainability Council and group risk committee, continues to assess physical and liability climate-related risks associated with underwriting, investment and operational risks, as well as evaluate the possible socioeconomic pathways to growth developed by various third- party experts.

102.31 - Review of economic, environmental and social topics

A total number of five board and 28 board committee meetings were held during 2022. The board receives semiannual updates regarding the company’s material ESG activities and management discusses with the appropriate committee any material risks associated with the company’s sustainability initiatives. The audit committee reviews material environmental risks; the NCGC governance committee reviews the company’s activities and disclosures related to sustainability, including environmental, social and governance matters; and the compensation and human capital committee reviews the company’s strategies, policies and practices relating to corporate culture and human capital development, including policies and practices relating to inclusion and diversity.  
 

At a management level, the Sustainability Council reviews and oversees ESG topics. For more information see GRI 102-19.

102.32 - Highest governance body’s role in sustainability reporting

The board and the NCGC, as part of their regular meetings, receive presentations and updates on material ESG matters, including The Hanover’s efforts in sustainability reporting. In addition, members of the executive leadership team, including the chief legal officer, chief human resources officer and chief financial officer serve on the Sustainability Council (see GRI 102-19) and oversee the preparation and public reporting of the company’s ESG disclosures. ESG reporting is codified in the charter of the Sustainability Council.

102.33 - Communicating critical concerns

See GRI 102-17 above and see “Communicating with the Board,” page 17 in the 2023 Proxy Statement.

102.34 - Nature and total number of critical concerns

As disclosed in GRI 102-17 above, we have an alert line maintained by an independent third-party service for communicating anonymously and confidentially with the board, the audit committee, our general auditor and our chief legal officer. We assess and respond to all submissions to the alert line. We also provide information to facilitate direct communication with our board.  
 

As required by the rules and regulations of the SEC, material developments to the organization are reported publicly on forms filed with the SEC. See the note preceding this index for a discussion of the methodology used to identify topics for inclusion in this report and how this methodology differs from the standard of materiality applied for reporting in our filings with the SEC. 

102.35 - Remuneration policies

See ” Executive Compensation,” pages 30-59 in the 2023 Proxy Statement.

102.36 - Process for determining remuneration

See ” Executive Compensation,” pages 30-59 in the 2023 Proxy Statement.

102.37 - Stakeholders’ involvement in remuneration

See “Item 2,” page 21 of 2023 Proxy Statement  and also see “Executive Compensation,” pages 30-59 in the 2023 Proxy Statement.

102.38 - Annual total compensation ratio

See “CEO Pay Ratio,” page 28  in the 2023 Proxy Statement.

102.39 - Percentage increase in annual total compensation ratio

See GRI 102-38 above.

102.40 - List of stakeholder groups

The Hanover’s stakeholder groups include: insureds, independent insurance agents and brokers, the communities in which we operate, employees, governmental authorities, investors, contractors, suppliers and industry associations. These stakeholders are critical to the company’s success.

102.41 - Collective bargaining agreements

None.

102.42 - Identifying and selecting stakeholders

The Hanover identifies stakeholders as the insureds who purchase policies, independent agents and brokers with whom we work to serve insureds, our employees, the regulatory bodies that oversee and regulate our operations, our investors, the suppliers with whom we partner to provide our services, the residents of the communities in which we operate, and the industry associations with which we collaborate to align our business to industry best practices.

102.43 - Approach to stakeholder engagement

Examples of routine stakeholder engagement include: customer communications and notices; informational bulletins and press releases; agent communications; events and in-person site visits; employee meetings; inter- and intranet website postings with extensive information and resources; round tables and crowdsourcing campaigns; civic engagement and community service projects; investor calls and presentations; and our annual meeting of shareholders.

102.44 - Key topics and concerns raised

We value the perspectives and opinions of our stakeholders and, where practical and economically feasible and consistent with our CARE values (Collaboration, Accountability, Respect, Empowerment), we incorporate their feedback on key topics into our approach.

102.45 - Entities included in the consolidated financial statements

In 2022, we reported on our financial statements that we conduct our ongoing business operations through four operating segments. These segments are Core Commercial, Specialty, Personal Lines, and Other, serving our customers through various property and casualty insurers as well as other subsidiaries. For a complete list of entities see Exhibit 21 of Form 10-K.

102.46 - Defining report content and topic boundaries

This GRI-referenced content index was prepared by a cross-disciplinary team responsible for The Hanover’s ESG disclosures and reviewed by the Sustainability Council. For more information on the Sustainability Council, see GRI 102-19. The Hanover used the Global Reporting Initiative Sustainability Reporting Standards of 2018 to develop this report. In determining the content of the report, The Hanover’s team considered the company’s core values and experience, as well as the reasonable expectations and interests of the company’s stakeholders, The Hanover’s insureds key among them. 

102.47 - List of material topics

The Hanover used the GRI definition of materiality as one of its reporting principles. For all material aspects identified, the related data and performance information in this GRI-referenced content index cover The Hanover’s consolidated operations as a company, unless otherwise noted. See the note preceding this index for a discussion of the methodology used to identify topics for inclusion in this report and how this methodology differs from the standard of materiality applied for reporting in our filings with the SEC.

102.48 - Restatements of information

Any restatements, and reasons for such, are footnoted as part of the data presentation within the body of the report.

102.49 - Changes in reporting

This GRI-referenced content index includes a cross-reference to the Task Force on Climate-related Disclosures (TFCD) framework to identify the GRI KPIs that are also responsive to the TFCD. There have been no other changes in reporting since the publication of The Hanover’s last GRI-referenced content index in December 2022.

102.50 - Reporting period

This GRI-referenced content index features quantitative and qualitative data for 2022, as updated where indicated.

102.51 - Date of most recent report

Our last GRI-referenced content index was dated December 31, 2022.

102.52 - Reporting cycle

This is the fourth year that we have prepared a GRI-referenced content index. Our initial report was published on February 20, 2020, and updated in December 2020.  We expect to publish an annual report in the fourth quarter of each year.

102.53 - Contact point for questions regarding the report

Oksana Lukasheva, Senior Vice President, Investor Relations and Corporate Finance

olukasheva@hanover.com

508-855-2063

102.54 - Claims of reporting in accordance with the GRI Standards

This GRI-referenced content index has been prepared referencing GRI standards.

102.55 - GRI content index

The GRI content index is reflected in this table.

102.56 - External assurance

The Hanover did not employ an external organization to audit this GRI-referenced content index. However, our independent, registered accounting firm audits certain financial information in the Form 10-K, included via URL links within this content index. In addition, our internal audit department reviewed the supporting documentation for disclosures of certain KPIs in this GRI-referenced index.

Economic topics

Management approach – GRI 103

103.1 - Explanation of the material topic and its boundary

The Hanover generates and distributes economic value by delivering on our promise to compensate a customer after suffering a covered loss. The subsequent disclosures related to economic performance have been included for presentation due to the volatility and significance each presents to The Hanover. While we aim to create a strong financial base to be resilient in the face of external events, our results may fluctuate as a result of cyclical or non-cyclical economic changes in the property and casualty insurance industry and other events outside our control, such as severe weather and terrorism.   
 

Industry catastrophe models assume an increase in frequency and severity of certain weather or other events, such as fires, hurricanes and other natural disasters, whether as a result of global climate change or otherwise. Due to geographical concentration in our property and casualty business within the United States, changes in economic, regulatory and other conditions in the regions where we operate, whether due to environmental, social or governance factors could have a significant negative impact on our business as a whole. 

For information about The Hanover’s 2022 economic performance, see the Form 10-K.

103.2 - The management approach and its components

The Hanover seeks to monitor and control risk exposure through an enterprise-wide risk management framework. Six major sources of risk are monitored and modeled, and these sources of risk are influenced by environmental and social factors such as climate change, increased weather severity, and human capital development, among others.

The six major sources of risk we monitor and model are:

• Catastrophe underwriting risk;
• Ex-catastrophe underwriting risk;
• Reserve risk;
• Investment risk;
• Credit risk; and
• Operational risk.

The Hanover’s risk governance is robust, with business unit risk structures supported by an enterprise  risk management (ERM) function. The ERM function, in partnership with the enterprise risk management group (ERMG), is responsible for identifying, monitoring, and analyzing material, corporate-level risks and emerging issues. Together, the team classifies, assesses, and manages risks, ensuring proper governance across the enterprise. ERMG membership is intended to represent The Hanover’s business segments (Agency Markets and Specialty) and identified functional areas of the organization. A risk  register is maintained, and each risk is assessed in terms of its likelihood of materialization, its mitigated financial magnitude, and the time horizon over which it might exist or emerge. Every risk in the risk register is owned by a member of ERMG, and the risk team meets with each risk owner to capture new risks and review and refresh risk assessments at a minimum annually, and up to quarterly, for the most material risks.

Severe weather is a top risk on The Hanover’s current and emerging risk register, and is tracked, researched, analyzed, and reported by the ERM function. Regular updates are provided to the corporate group risk committee (GRC), aggregation working group, ERMG, and Sustainability Council (see GRI 102-19). The chief risk officer presents on the ERM program, including updates to The Hanover’s top current and emerging risks, to the audit committee of the board four to five times per year, and to the board annually. The risk function closely follows the research and analysis being conducted by several industry bodies, universities, and weather experts. We analyze historical data and trends to identify possible signs of climate change impacting both catastrophe and noncatastrophe weather-related losses.

The management of underwriting risk, including climate change, starts with the chief underwriting officer and corporate underwriting team to set guidelines and corporate appetite guardrails that apply to all lines of business (e.g., hurricane risk). The team works in collaboration with business units to fulfill their specific strategies. Business unit leaders create and review underwriting guidelines within established guardrails and for each line of business, industry and/or class of business that specify the nature and characteristics of the risks The Hanover is willing to accept. Underwriting authority letters are granted to each individual underwriter in the organization. Authority letters provide specified limits of authority and a clear escalation path is outlined as risks increase in size  and complexity.   
 

The aggregation working group is responsible for exposure management as well as monitoring catastrophe risk and risk concentrations as they relate to each peril and region — hurricane, other wind, winter storm, earthquake, hurricane-induced precipitation, flood, wildfire, and terrorism. The underwriting committee is responsible for assisting executive management in exercising its oversight of the underwriting risks and controls that have a material impact on the company. The committee conducts research on underwriting topics, reviews performance against established risk tolerances, and directs actionable items toward the appropriate businesses. The GRC considers the current and emerging risks and mitigation actions underway for each of the six major sources of risk. All members of the executive leadership team are members of the GRC, along with the chief risk officer and chief actuary. The committee meets quarterly, and the results are reported to the Board of Directors.  
 

Our investment portfolio is primarily managed by external large scale asset managers with oversight by our internal investment department. The ERM function works in close collaboration with the investment team to monitor matters in relation to asset allocation, financial market risk and liquidity risk. The chief investment officer reports to the board twice a year. See GRI 102-30 and “Other Topics, Investments” for more information on The Hanover’s investment metrics and published investment policy.   
 

In addition, in 2022 we launched the Green Team, an employee-led advisory group. The Green Team’s mission is to lead resiliency action and nurture a sustainable mindset among employees through education and community engagement, in support of our commitment to be a socially responsible organization. The team is organized around three main topics:

• Education - Strengthen knowledge of ESG practices, with a focus on the role individuals and our company play in building climate resiliency
• Community - Compile resources and offer opportunities for employees to get involved both internally and externally
• Business alignment - Develop a feedback loop between employees and senior leaders to exchange ideas and knowledge on environmental topics, seeking ways to communicate this information and elevate The Hanover brand.

In addition to the robust governance structure, regular engagement with business leaders, finance officers, underwriting professionals, actuarial staff and the claims unit provide collaboration opportunities and prompt development of new risk management strategies and reporting tools to better inform risk selection and management across the enterprise. For additional information,  see GRI 201-2.

Economic performance – GRI 201

201.1 - Direct economic value generated and distributed

Please refer to the 2022 Financial Supplement for details on The Hanover’s 2022 economic performance. An updated Financial Supplement is published quarterly. In addition, financial information on the basis required to be reported by the company’s financial regulators (“statutory reporting”) is made regularly available on our website.

The Hanover also distributes economic value to its shareholders through the payment of dividends and repurchases of shares of its common stock.

201.2 - Financial implications and other risks and opportunities due to climate change

The Hanover is committed to protecting our environment, making a difference in our communities, and governing our actions with integrity. We believe these values are essential to our success as a leading property and casualty insurance company providing insurance solutions in a dynamic world. We recognize climate change poses new and emerging risks, as well as opportunities to make The Hanover and its stakeholders more resilient in the years to come.

 

Identified Climate-Related Risks and Opportunities

 

Risks

The Hanover recognizes the risks climate change poses to our environment, the implications of increased weather occurrences and severity on our customers, and the impact our employees have on the environment as they perform their job functions and commute to and from work. The financial risk that climate change brings to The Hanover primarily relates to the impact it may have on the frequency and/or severity of weather events, and the resulting impact those events have on the property and casualty coverages we provide. Our greatest defense to the potential impacts of climate change on our business is to manage our exposure concentrations in any one geographic area, leverage external and internal catastrophe and other models, and utilize reinsurance.

Opportunities

Climate change offers an opportunity for The Hanover to strengthen its financial resilience by managing its exposure footprint and containing the severity of a 1-in-250, or extreme loss event, within a specified risk tolerance. By establishing resiliency to climate change, we believe that we can maintain a strong financial foundation and can continue to deliver on our promise to our insureds. We continuously manage volatility and concentration risk by leveraging models and third-party scores to identify areas to address through pricing, as well as reinsurance terms and conditions. We purchase facultative, property per-risk and catastrophe treaty reinsurance to protect areas of concentrated risk, as well as to mitigate possible impact from extreme events. We will continue to evaluate our rate structure, underwriting guidelines, and coverage offerings in response to changes in weather patterns, as well as developments in building and community resilience.

We consider climate risk and opportunities through both our annual strategic planning process and ongoing business management, as well as through our long-term strategic planning efforts.

Time horizon	Climate risks	Climate opportunities
Short-term  1-5 Years	Increased volatility (frequency/severity) of weather events	Promote green endorsements and coverages Support building resiliency through evolving building code standards and compliance to ordinance or law coverage
Medium-term 5-10 Years	Potential changes to the Atlantic hurricane patterns impacting exposure concentration Potential for regulatory changes constraining insurer underwriting responses	Leverage loss control services to educate insureds on preventative measures (e.g., contractual language, green endorsements, storm preparedness) Deepen underwriting and loss control staff training on evolving and unique climate exposures
Long-term 10-30 Years	Changes to availability of reinsurance coverage to protect economics The potential for sea level rise to alter the coastline and the associated risk to local economies Climate-related litigation	Mitigation of risk over time by growing our casualty portfolio to balance property exposure Evolution of tools and models to aid in climate-change scenario modeling and exposure management practices Advancement in pricing to reflect loss mitigation through enhanced building codes and resilient building features

 

201.3 - Defined benefit plan obligations and other retirement plans

For a description of defined benefit plan obligations, see our disclosure of The Hanover Insurance Group Pension Benefit Obligations, page 58 in the 2022 Form 10-K.

In addition to our defined benefit pension plan, The Hanover also maintains the following retirement and savings plans:

• The Hanover Insurance Group Retirement Savings Plan
• The Hanover Insurance Group Non-Qualified Retirement Savings Plan
• The Hanover Insurance Group Excess Benefit Retirement Plan

For a description of the level of participation in these plans by our named executive officers, see the compensation disclosures in the 2023 Proxy Statement.

201.4 - Financial assistance received from government

The Hanover did not receive financial assistance from any government in 2022.

Indirect economic impacts – GRI 203

203.2 - Significant indirect economic impacts

The Donahue Report on The Hanover’s economic impact in Massachusetts is a key reference for the full impact that we have had through the years. 

In-kind contributions in the community

We continue to demonstrate an indirect economic impact through our volunteer commitments and service as leaders on non-profit community boards and leadership committees that have an economic impact on our community. This was demonstrated during the pandemic as we positioned leaders 

to serve in key positions that helped to further support the ongoing COVID-19 relief efforts, which included hosting vaccine clinics, addressing food insecurity, housing stability, workforce development, education, childcare and mental health. 

Looking more broadly across our communities to address the long-term economic impact of the pandemic, members of our leadership served on key strategic committees to infuse more financial resources and support. 

Jack Roche, The Hanover’s president and CEO, served on the finance committee of Worcester Homecoming, which was an organized effort to attract notable alumni to engage in discussion and learn more about our goals of enhancing and sustaining the pre-pandemic momentum of Worcester’s renaissance. 

Dennis Kerrigan, EVP, chief legal officer, served on both the Worcester Business Development Corporation and the Worcester Regional Research Bureau’s board of directors. 

Kimberly Salmon, president of The Hanover Insurance Group Foundation and head of community relations, continued to chair the Mayor’s Mental Health Taskforce, an ongoing community effort to support continued access to mental health resources and care. In addition, she continued to serve on the Greater Worcester Community Foundation, Worcester Educational Collaborative, and Worcester State University Foundation. And in 2022, Kimberly joined the UMass Memorial Medical Group board, co-chaired the Worcester Tercentennial Committee and served on the Worcester Homecoming board and leadership committees.

Anti-corruption – GRI 205

205.1 - Operations assessed for risks related to corruption

As a company with operations almost exclusively in the United States and with the vast majority of insurance premium coming from the United States, we have assessed our operations for risks related to corruption, but our risk assessment has not identified corruption as a material risk that is monitored as part of our risk register.

205.2 - Communication and training about anti-corruption policies and procedures

We have adopted an anti-bribery and anti-corruption position as part of our Code of Conduct. These provisions are applicable to all employees, officers and directors of the company. Each year we undertake a Code of Conduct certification process that requires every employee to certify their compliance with the Code of Conduct, including the provisions regarding anti-corruption. In addition, approximately 100 employees whose roles within the organization necessitate it are required to complete an annual training course on Office of Foreign Assets Control (OFAC) and Anti-Money Laundering compliance.

Environmental topics

Management approach – GRI 103

103.1 - Explanation of the material topic and its boundary

The Hanover is committed to building an organization of the future — an inclusive, diverse, engaged and incentivized workforce that values the health, safety, development and dignity of our workers. Our future success is dependent on our ability to attract, develop and retain qualified employees. Meeting employee expectations with respect to health, safety, development, and dignity is a key  component to executing on this commitment. The subsequent disclosures related to social performance have been included for presentation due to the volatility and significance each presents to The Hanover. See the note preceding this index for a discussion of the methodology used to identify topics for inclusion in this report and how this methodology differs from materiality, as defined and reported in our filings with the SEC.

For information about The Hanover’s key risk factors, see the Form 10-K, beginning on page 18.

103.2 - The management approach and its components

The Hanover has taken many steps to reduce emissions and energy consumption at our owned facilities.  Please refer to the GRI KPI 100 series for a description of our risk management practices. See GRI KPI 103-2 under ‘environmental topics’ for more information on our risk management practices.

Energy – GRI 302

302.1 - Energy consumption within the organization

In 2022, we consumed 19 million KWH of electricity and 441,637 therms of natural gas between our owned locations in Worcester, Massachusetts, and Howell, Michigan, and leased office spaces. Our owned locations account for 1,013,711 square feet (77% of office space) while our leased office locations account for 308,531 square feet (23% of office space). Overall emission levels since 2018 decreased due to the shift to remote/hybrid work and reduction in travel².

 

Item	2018	2019	2020	2021	2022
Energy consumption
Mobile combustion (mT)	6,451	6,440	2,897	2,707	3,908
Office activity (mT)	9,153	8,814	7,418	7,634	8,086
Total carbon dioxide (mT)	15, 604	15,254	10,315	10,341	12,066

²302-1 emissions are estimates and have been restated due to a change in methodology and improved data quality and availability. This change in methodology is aligned with industry standards.

302.4 - Reduction of energy consumption

In 2022, we completed several energy-efficiency projects. At our main office headquarters in Worcester, Massachusetts, we installed new energy-efficient LED lighting, advanced lighting control systems, HVAC system upgrades, and completed building envelope improvements resulting in decreased energy use. At our Howell, Michigan, office we also replaced aging heating equipment with new and more efficient equipment, also resulting in energy savings.

Water and effluents – GRI 303

303.3 - Water withdrawal

The Hanover does not have a water recycling program.

303.5 - Water consumption

In 2022, The Hanover used approximately 1,000,405 cubic feet of water at our owned locations in Worcester, Massachusetts, and Howell, Michigan, and our leased offices. This reduction in consumption since 2018 is primarily due to the shift to remote/hybrid work and implementation of water savings measures at our owned facilities³. 

Item	2018	2019	2020	2021	2022
Water consumption
Water consumption (cu ft)	2,045,169	1,833,286	1,097,807	1,094,915	1,000,405

³303-5 has been restated to include owned and leased office locations. This change in methodology is aligned with industry standards.

Emissions – GRI 305

305.1 - Direct (Scope 1) GHG emissions

Direct Scope 1 greenhouse gas (GhG) emissions include emissions from natural gas used for heating at our owned locations in Worcester, Massachusetts, and Howell, Michigan, and our leased offices in addition to our mobile combustion emissions from The Hanover’s leased automobile fleet vehicles and leased corporate aircraft.  Overall emission levels since 2018 decreased due to the shift to remote/hybrid work and reduction in travel⁴. 

Item	2018	2019	2020	2021	2022
GHG emissions
Mobile consumption (mT)	4,022	3,980	2,278	2,233	2,686
Office activity (mT)	2,376	2,284	2,016	1,970	2,337
Total Carbon Dioxide (mT)	6,398	6,264	4,294	4,203	5,023

⁴ 305-1 emissions are estimates and have been restated due to a change in methodology and improved data quality and availability. This change in methodology is aligned with industry standards.

305.2 - Energy indirect (Scope 2) GHG emissions

Indirect greenhouse gas (GhG) emissions from electricity usage in The the Hanover’s owned locations in Worcester, Massachusetts, and Howell, Michigan, together with The Hanover’s leased properties totaled an estimated 5,749 metric tons in 2022, using a location-based method. We purchased renewable energy certificates (“RECs”) from our electric supplier in an amount equal to 100% of our electricity consumption at our corporate headquarters in Worcester, Massachusetts. RECs were sourced from wind renewable sources. In 2022 our Worcester, Massachusetts, headquarters represented 69% of our total electricity usage, equivalent to 3,169 metric tons of CO2e emissions.  This reduction in emissions since 2018 is primarily due to the shift to remote/hybrid work, reduction in the size and number of leased office locations, and the implementation of energy savings measures at our owned facilities (see 302-4).⁵  

 

Item	2018	2019	2020	2021	2022
GHG emissions (location-based)
From electric use (Worcester)
Total carbon dioxide (mT)	6,777	6,530	5,402	5,664	5,749

⁵ 305-2 emissions are estimates and have been restated due to a change in methodology and improved data quality and availability. This change in methodology is aligned with industry standards.

 

305.3 - Other indirect (Scope 3) GHG emissions

Other indirect (Scope 3) greenhouse gas (GhG) emissions were estimated for corporate business travel driven by our employees in their personal vehicles in addition to air and rail travel. GhG emissions were estimated using information provided by employee expense reimbursement system for employee mileage and by our travel services provider for air and rail miles traveled. Reductions in 2020 and 2021 are primarily due to reduced travel during the pandemic which have since increased, but are still below pre-pandemic levels.  

Item	2018	2019	2020	2021	2022
GHG emissions
Total Carbon Dioxide (mT)	2,429	2,460	619	474	1,294

⁶ 305-3 emissions are estimates and have been restated due to a change in methodology and improved data quality and availability. This change in methodology is aligned with industry standards

.

305.4 - GHG emissions intensity

See GRI 302-1.

 

305.5 - Reduction of GHG emissions

See GRI 302.4.

 

305.6 - Emissions of ozone-depleting substances

The Hanover is not a manufacturer and does not produce, import, or export any ozone-depleting substances.

305.7 - Nitrogen oxides (NOx), sulfur oxides (SOx) and other significant air emissions 

The Hanover is not a manufacturer. No significant Nox, SOx, or other significant air emissions are produced.

Effluents and waste – GRI 306

306.2 - Waste by type and disposal method

In 2022 at our corporate office headquarters office in Worcester, Massachusetts, and our Howell, Michigan, and leased office spaces we continued our recycling program, diverting the majority of waste from landfills. This was performed through single-stream recycling, recycling of electronics⁷ and recycling of construction waste from on-site construction/maintenance activities.⁸ 

 

Item	2018	2019	2020	2021	2022
Waste produced (tons)
Waste	307	236	119	91	110
Recycling	127	156	113	103	111
Compost	22	21	8	6	5
Document destruction	67	78	69	64	68
Recycling - construction and demo	28	46	64	25	25

⁷ 306-2 Electronics waste includes laptops, cords, and other computer equipment. Approximately 21 tons of electronic waste was recycled in 2022.

⁸ 306-2 has been restated to include owned and leased office locations. This change in methodology is aligned with industry standards.

Social topics

Management approach – GRI 103

103.1 - Explanation of the material topic and its boundary

The Hanover is committed to building an organization of the future – an inclusive, diverse, engaged and incentivized workforce that values the health, safety, development and dignity of our workers. Our future success is dependent on our ability to attract, develop and retain qualified employees. Meeting employee expectations with respect to health, safety, development, and dignity is a key component to executing on this commitment. The subsequent disclosures related to social performance have been included for presentation due to the volatility and significance each presents to The Hanover.  See the note preceding this index for a discussion of the methodology used to identify topics for inclusion in this report and how this methodology differs from materiality, as defined and reported in our filings with the SEC.

For information about The Hanover’s key risk factors, see the Form 10-K, beginning on page 18. In addition, please see the Employees and Human Capital Resources section on page 16 of the Form 10-K.

103.2 - The management approach and its components

The Hanover manages its priority to build an organization of the future by making a commitment to objectively assess the current state of the organization and formulate a collaborative strategy to address the key findings. For example, management has made a commitment to an inclusive, diverse and equitable workplace because we believe that when our employees feel accepted and engaged, our business thrives. At The Hanover, embracing inclusion, diversity and equity (IDE) means that we appreciate our differences, reinforce inclusive behaviors at all levels and live what we call our CARE values (Collaboration, Accountability, Respect, Empowerment). To that end, to reinforce our CARE culture, since 2018, we have focused on our IDE initiative, by continuing the following: 

• Analyzed IDE practices, strategy implementation and enterprise-wide communication plan development on an ongoing basis
• Employee-led IDE council, an advisory group that provides employee and business insights to our executive leadership
• Established a dedicated IDE team to develop, implement and execute inclusive practices throughout all business practices
• Led training on unconscious bias and inclusive leadership
• Launched a mentorship pilot program
• Created numerous business resource groups for women and underrepresented populations with executive leadership support alignment
• Invested in technology to enable data driven decision-making and analytics to help diversify prospective candidate pools for senior leadership positions and increase representation of diverse populations in our sourcing and hiring practices
• Highlighted our focus on what equity means, with the commitment to intentionally integrate it into our culture through ongoing education and evolving business practices
• Expanded our charitable focus to diversify support of underserved youth and populations in our local communities

Further, accountability has been established by incorporating oversight of IDE as part of our larger corporate culture into the charter of the compensation and human capital committee of the board, and by linking IDE initiatives to incentive compensation metrics for our CEO and entire executive leadership team.

See GRI 103-2 under "environmental topics" for more information on our risk management practices.

Employment – GRI 401

401.2 - Benefits provided to full-time employees that are not provided to temporary or part-time employees

The Hanover provides comprehensive health and welfare benefits (i.e., medical, dental, life, disability and other voluntary benefits) to all full- and part-time employees who work 30 or more hours per week.  Additional benefits, such as a 401(k) plan, employee assistance program, and caregiving support are provided to employees regardless of hours worked.  Please refer to The Hanover’s career site for more details on employee benefits.

In 2022, we continued to promote our Hanover CARES Matching Gift Program to expand our commitment to issues that align with our foundation’s mission and causes that impact our employees where they live and work. These programs were both timely and responsive to the current community needs.

Initially the Hanover CARES Matching Gift Program was launched to address the social and racial justice movement following the George Floyd unrest. This program was developed and informed by our business resource groups to have the greatest impact.

The COVID-19 Response Matching Gift Program was initiated in response to the significant community needs that emerged and/or were exacerbated in the wake of the pandemic. The match focused on supporting organizations addressing the communities' basic needs and social determinants of health – hunger, shelter, transportation, social isolation, and access to educational resources and personal protective equipment.

These programs helped to revise our existing educational matching gift program to be more inclusive and in alignment with our new mission and drives impact in the communities in which our employees live and work. This also helped us to reduce the minimum employee gift amount to be matched to make it accessible for all to participate. 

In addition, we also provide annual competitive scholarships to children of Hanover employees. And, in 2022, we expanded the employee scholarship program from just high school seniors to include undergraduate college students, as well.  

 

 

401.3 - Parental leave

The Hanover offers parental leave to all employees, as noted on the company’s benefits page.

Labor/management relations – GRI 402

402.1 - Minimum notice periods regarding operational changes

Significant organizational changes are communicated to employees through formal communication channels and, by and large, are planned well in advance. We aim to communicate to our leaders and employees most impacted by a change before communicating out to our larger employee workforce. In addition, for some organizational changes we have utilized company-wide crowdsourcing campaigns to seek input from our employees so that their opinions, perspectives, and ideas can be included in the decision-making process. 

Occupational health and safety – GRI 403

403.1 - Occupational health and safety management system

The Hanover has established a safety committee that meets quarterly to review, discuss and implement action plans and training to mitigate potential safety risks.

Less than 1% of our workforce is considered to be exposed to higher-than-average occupational risk. It is also the responsibility of every employee at The Hanover to adhere to the Code of Conduct and to ensure the safety of themselves and their co-workers.

403.2 - Hazard identification, risk assessment and incident investigation

See GRI 403-1.

403.3 - Occupational health services

OSHA injury recording compliance is managed through a contracted third-party specialist in partnership with The Hanover’s human resources department. Any incident is reviewed by, at a minimum, members of the facilities team and physical security staff to determine if any mitigating actions are appropriate.

For the minimal portion (less than 1%) of the employee population with the potential for exposure to high occupational risk, The Hanover contracts a third-party specialist to:

• Perform quarterly mock OSHA inspections to identify and help mitigate any relevant issues; and
• Review, help develop, and train relevant staff on safety policies and procedures.

403.4 - Worker participation, consultation, and communication on occupational health and safety

The safety committee meets quarterly to review issues or concerns employees or managers may have. The committee membership represents multiple segments and departments of the company and is open to all interested employees. The Hanover also has a safety warden program for all its owned and leased properties with more than one person. This program engages employees and trains them to assist in the event of large-scale events, such as a building evacuation or shelter-in-place situation.

403.5 - Worker training on occupational health and safety

Annual site-specific training is conducted by a third-party specialist at both The Hanover’s Worcester, Massachusetts, and Howell, Michigan, locations for employees who could be exposed to high occupational risk, although this group represents less than 1% of the total workforce. See GRI 403-1.

403.6 - Promotion of worker health

The  Hanover offers a variety of medical plan options, allowing employees to choose the level of access and type of care they desire. All our medical insurance carriers provide services and programs for non-work-related conditions by evaluating risk factors determined through submitted claims and communicating directly with those employees in need.

We offer well-being programs that cater to the physical, financial, mental and social well-being of our employees. Please refer to The Hanover’s Career Site for details on employee benefits.

Training and education – GRI 404

404.1 - Average hours of training per year per employee

The Hanover is committed to building a strong culture of continuous learning and development. We offer robust opportunities that range from soft skill building to expanding technical skillsets. Learning is available to every employee at the company. We also offer reimbursement for tuition and education-related fees, including professional and industry designations. 

Our training results include:

• Approximately 2,981 training hours completed on compliance and ethics in 2022. 
• 2022 was not a companywide Code of Conduct training year, this is a bi-annual activity. A code of conduct questionnaire and employee certification is required annually, however. The hours allocated to completing the 2022 code of conduct review and certification are not included in this total.
• All employees take training related to information security practices and privacy.
• In 2022, employee participants averaged 16 hours of formal training.

Not included in this information is a significant amount of both technical and informal training that occurs within each business unit.

404.2 - Programs for upgrading employee skills and transition assistance programs

See GRI 404-1.

404.3 - Percentage of employees receiving regular performance and career development reviews

Each employee, regardless of role, is formally evaluated and receives a performance discussion annually. In addition, performance connections take place between manager and employee on an ongoing basis to discuss goals, overall performance, development opportunities, and demonstration of leadership and corporate values.

Diversity and equal opportunity – GRI 405

405.1 - Diversity of governance bodies and employees

Corporate Governance Principles

The Hanover is committed to building an inclusive culture where we appreciate our differences, reinforce inclusive behaviors at all levels, and demonstrate our CARE values, because we believe that when our employees feel accepted and engaged, our business thrives.

The following displays the composition of our governance bodies and overall workforce as of 12/31/2022:

Board of Directors:

• Gender diversity – Four of our 11 (36%) non-employee board members are female. A woman chairs our board, and one of the three (33%) standing board committees is chaired by a woman.
• Racial/ethnic diversity – Two of our 11 (18%) non-employee board members are racial/ethnically diverse, and one of the three (33%) standing board committees is chaired by a person of color.
• Age diversification – Our board members range in age from 58-74 (as of 9/1 - 9/20/22); See the 2023 Proxy Statement for more information.

Executive leadership:

• Gender diversity – One of our nine executive officers is female.
• Age diversification-
  • 56% Baby Boomers (born between 1946-1964)
  • 44% Generation X (born between 1965-1979)

The Hanover has approximately 4,600 employees. Employee gender composition for all employees:

• 59% female employees
• 40% male employees
• 1% undeclared

Employee age breakdown for all employees:

• 21% Baby Boomers (born between 1946-1964)
• 35% Generation X (born between 1965-1979)
• 37% Generation Y (born between 1980-1994)
• 7% Generation Z (born between 1995-2012)

See GRI 103-2 under ‘employment topics’ for more information on our inclusion and diversity practices.

For additional information on IDE initiatives, and workforce diversity and other demographic information, see The Hanover’s Inclusion, Diversity and Equity Report, which is available on our website.

Human rights assessment – GRI 412

412.2 - Employee training on human rights policies or procedures

Human rights are integral to our core company value of respect. Our company is built on the principle of doing the right thing by our customers, employees, agent partners, and the communities we work in. The Hanover is committed to an equal opportunity workplace that is free of discrimination and harassment based on national origin, race, color, religion, gender, ancestry, age, sexual orientation, gender identity, disability, marital status, veteran status, genetic information, or any other status protected by law.

• We support our employees with:
  • Corporate business resource groups;
  • Unconscious bias training (See GRI 404-1);
  • An anti-discrimination policy;
  • Anti-harassment and inclusion policies, and accompanying training to employees; and
  • An anonymous reporting hotline and dedicated website to help employees report concerns and maintain anonymity (See GRI 102-17).
• We have also received numerous designations:
  • America’s Best Midsize Employers, Forbes
  • America’s Best Insurance Companies, Forbes
  • Best Place to Work for LGBTQ+ Equality (perfect score on Corporate Equality Index), Human Rights Campaign Foundation
  • Best Company for Women, Fairygodboss
  • Best Company Where CEOs Support Gender Diversity, Fairygodboss

Local communities – GRI 413

413.1 - Operations with local community engagement, impact assessments and development programs

Our major operations in Worcester, Massachusetts, and Howell, Michigan, have community engagement programs.

Hanover employees began working with Worcester Together Group and Response Team on March 16, 2020, and continue today. The Worcester Together Group and Response Team supports escalated needs in the community, addressing food insecurity, housing instability and mental/behavioral health. This team had many priorities, supporting the homeless community, opening a women-only shelter, and other work related to senior isolation, establishing education, refugee/immigrant/undocumented resources, community health, and vaccine equity targeted at assisting those at the highest risk, among other priorities. 

In addition, members of The Hanover’s executive leadership team served on several of Worcester’s boards that impact the economic recovery and development for the city, which include Worcester Regional Research Bureau (Dennis Kerrigan, CLO), Worcester Business Development Corporation (Dennis Kerrigan, CLO), and the Worcester Regional Chamber of Commerce (Harris Berenson, VP Counsel), along with the YMCA of Central Massachusetts (Eric Cannon, chief risk officer and Scott Greico, chief underwriting officer).

Additionally, a leadership member from our Hanover Charitable Foundation also serves across Worcester at Worcester State University, UMass Memorial Health System and WE Collaborative (Kim Salmon, AVP, community relations).

Members of leadership staff also served on the search committee for the new superintendent of the Worcester Public Schools system (Kim Salmon) and on the search committee for a new president and CEO (Dennis Kerrigan, CLO, and Kim Salmon).  

We continued our summer internship community experiences, separating our summer interns into 12 working groups and pairing them with non-profits in the community that are working to address educational barriers, social determinants of health, workforce/workplace development and community safety.   
 

Public policy – GRI 415

415.1 - Political contributions

The Hanover Code of Conduct outlines our policy on the company’s political contributions and activity. The board’s Audit Committee charter also notes oversight of political spending.

The Hanover Insurance Group Foundation only supports 501(c)(3) tax-exempt organizations or groups operating under a fiscal agent of a tax-exempt non-profit. The foundation will not make grants for endowments, medical or academic research, scholarships, sectarian or religious purposes, or to support candidates for political office. Additionally, private non-operating foundations, 509(c)(4) organizations, and Section 509(a)(3) Type III non-functionally integrated organizations are not eligible to apply.

Customer privacy – GRI 418

418.1 - Substantiated complaints concerning breaches of customer privacy and losses of customer data

The Hanover collects information, including personal information, so that we may offer quality products and services to our customers. We recognize the need to prevent unauthorized access   
to the information we collect, including information held in an electronic format on our computer systems. To safeguard that information, we maintain physical, electronic and procedural safeguards designed to protect the confidentiality and integrity of all non-public, personal information, including  but not limited to Social Security numbers, driver’s license numbers and other personally identifiable  information. The Hanover’s data security framework is aligned to standards developed by the  National Institute of Standards and Technology (NIST). We utilize the NIST framework for understanding, managing, and expressing cybersecurity risk to internal and external stakeholders. We also incorporate the NIST framework to help identify and prioritize actions for reducing cybersecurity risk and for aligning policy, business, and technological approaches to managing that risk. Our dedicated information security function, overseen by our chief information security officer, conducts regular internal security audits, vulnerability assessments and penetration testing of the company’s systems, products and practices affecting customer data. 

In addition, the company’s information security function regularly undertakes information security awareness and training exercises designed to enhance awareness and prevent, mitigate or prepare for a response to a cybersecurity threat. A full-time member of the information security team dedicated to awareness and training leads these initiatives. Legal compliance with information security and data privacy rules and regulations is the responsibility of attorneys in the Office of the General Counsel, including a dedicated privacy attorney.

Data privacy and cybersecurity risk is one of the risks identified and managed by our enterprise risk management (ERM) function. See GRI 103-2 for more information. Additionally, data privacy and cybersecurity risk are overseen like other risks facing the company by our Board in accordance with its risk oversight function. See GRI 102-15 for more information. Oversight of information security risk and monitoring of the company’s information security programs and cybersecurity efforts are codified in the charter of the audit committee. The audit committee is comprised entirely of independent directors. The audit committee/board receives formal presentations on information security from the company’s chief information security officer approximately five times a year, and additional updates related to information security programs or data incidents are communicated to the board, audit committee or audit committee chair on an as-needed basis, as dictated by the circumstances and as required under our organization’s formal data incident response plan. 

As a regulated entity, The Hanover and its group of affiliated companies are subject to, and must adhere to ongoing cybersecurity regulations, including regulations promulgated by federal and state authorities, including the New York Department of Financial Services.

The Hanover’s privacy policies and notices are publicly disclosed and available at the privacy center on our website. These notices and policies provide transparency to our data privacy practices and provide information on how individuals may obtain additional information.

In 2022, and since 2018 when we started reporting under the GRI framework, there were no substantiated complaints concerning breaches of customer privacy received from either outside parties or regulatory bodies. Additionally, in the three years prior to December 31, 2022, there were no expenses incurred from information security breach penalties and settlements from outside parties or regulatory bodies. The company maintains a comprehensive cybersecurity risk insurance policy from an unaffiliated third-party insurer.

Other topics

Investments

N/A - Responsible investment policy

The Hanover has an Environmental, Social and Governance (ESG) Investment Policy Statement, as published in our sustainability report.   
 

TCFD

TCFD Recommendation

 

TCFD Recommendation	Corresponding GRI KPI
1) Describe the board's oversight of climate related risks and opportunities	102-18; 102-19
2) Describe management’s role in assessing and managing risks and opportunities	103-2
3) Describe the climate-related risks and opportunities the organization has identified over the short-, medium-, and long-term	201-2
4) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning	201-2
5) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario	201-2
6) Describe the organization’s processes for identifying and assessing climate-related risks	103-2
7) Describe the organization’s processes for managing climate-related risks	103-2
8) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management	103-2
9) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process	201-2
10) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks	305-1; 305-2; 305-3
11) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets	See "Other topics," Investments

The Hanover Insurance Group, Inc. (“The Hanover”) prepared the GRI-referenced content index to provide additional information to various stakeholders on The Hanover’s ESG practices. Disclosures contained herein should not be deemed to be material to The Hanover or material to an investor under Rule 405 of the Securities Act of 1933 and the rules and regulations promulgated thereunder solely because they have been presented for inclusion herein unless they have also been disclosed in the reports that The Hanover publicly files with the Securities and Exchange Commission. To the contrary, disclosures in this report have been selected for inclusion in this report for a number of reasons, including but not limited to: for the benefit of stakeholder groups, in addition to investors, who have an interest in more detailed topical information from The Hanover (e.g., insureds, insurance agents, employees, communities, industry associations, suppliers, and interested third parties); for commercial, competitive or marketing reasons; for transparency into ESG practices and data points that other companies disclose and that would otherwise be inferred to be absent should we not provide disclosure; and to provide insight into The Hanover’s overall sustainability practices and CARE values (see 102-16 above) where we have available data to provide representative examples and data points to evidence our overarching principles and approach. These disclosures have been reviewed by The Hanover’s Sustainability Council (see 102-19 above) and included in this report on the foregoing basis and not on the same basis or standards that disclosures are reviewed and approved for inclusion in The Hanover’s reports that are filed with or furnished to the U.S. Securities and Exchange Commission ("SEC").

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