Environmental, social, and corporate governance (ESG) standards in the broader marketplace reflect a growing recognition that business needs to lead the way in addressing a range of environmental and social issues. Environmental concerns, especially as they impact climate change, are a familiar facet of business life. In addition, social concerns include human rights and equity; basically, an organisation's relationships with people. Governance refers to the structure of rules, practices, and processes used to direct and manage a company. Bringing the discussion to the physical security marketplace, we asked this week’s Expert Panel Roundtable: How well does the security marketplace implement ESG (environmental, social, and corporate governance) strategies?
The security sector has placed emphasis on implementing ESG strategies over the past few years, but there is always room to improve. At Axis Communications, one way we work to implement strategies is through our annual Sustainability Report – allowing for transparency with customers, partners, and internal stakeholders, and gauging our progress on priority initiatives. For many, finding a natural place to start can be the most difficult element of ESG. For such businesses, the UN Global Compact is a great starting point for any company looking to dive into ESG initiatives. Specifically for the security industry, one way to improve strategies is by leveraging existing partnerships to ensure responsibility across the entire value chain. By working together with partners, companies can ensure relationships are built on trust and transparency, and that they remain close with suppliers to ensure products and solutions continue to be utilised with ESG practices in mind.
While companies are taking valuable actions to support society (e.g., donating to charities, acting on slave labour) and reducing their environmental impacts (e.g., product packaging and recycling), few have clear overarching strategies that they are also implementing. At Gallagher we are sharpening our strategic approach to ESG initiatives which will stand us in good stead for the future. The marketplace needs to become more strategic with implementation of ESG because more and more customers are setting sustainability targets, particularly around reducing greenhouse gas emissions. They expect their suppliers, and their products and services, to support those targets. This means providing products and services that use minimal energy to make and use them. In addition to addressing customer expectations, in some parts of the world, we are facing increasing regulation, where companies are required to report on things such as modern slavery, and the impacts of climate change on their business. Customer expectations are the greatest in the United Kingdom and European markets, followed by Australia. Additional regulations in some markets include meeting building energy efficiency standards. With all these changes, the security marketplace must evolve from simply doing valuable ESG actions in isolation to creating an integrated ESG strategy. This is critical for business, society, and the planet.
Minimising energy usage is now top-of-mind when it comes to building design and operations. Initially, the focus was on primary systems like HVAC, but this has evolved and today there is a real drive to chase down every watt-per-square-meter to cut consumption. From a physical access control perspective, consultants and end-users should look at door readers for incremental gains. This is not universally well known. When configured and activated, features like Intelligent Power Mode mean that readers go into standby mode when not used – overnight and at weekends for example – such that substantial power savings can be realised when you consider that hundreds of them are installed in large premises multiplied by the 15-to-20-year life span of each. Additional environmental gains can be achieved by transitioning away from the humble PVC access card. The latest smartphone-based credentials – which support integration with Apple Wallet and are easily managed using cloud-based services – avoid the waste and carbon emissions associated with plastic card production. Market feedback shows that up to 15% are renewed every year aside from planned renewal schemes. Furthermore, HID Global has made sure our products enable our customers to meet BREEAM and LEED certification. People might not be aware of this, but we provide Environmental Product Declarations [EPDs] for our readers so that designers can accrue more points when they undertake their environmental analysis and produce building lifecycle assessments (LCAs). This is not a ‘nice to have’ anymore. Customers are demanding more from OEM suppliers in terms of their environmental track record, with sustainability now directly influencing purchasing decisions.