Allegion has mobilized a cross-functional ESG Council to support our ongoing commitment to
environmental, social and governance matters.
Allegion strives to create a company where all people feel welcome and valued. We know it's a journey but, together, the people of Allegion are creating a more inclusive workplace and a more equitable, better world. Each section shows the progress of where we've been and the goals for where we are going.
In 2021, Allegion was named the Robert W. Campbell Award winner, a prestigious, international award recognizing excellence in environment, health and safety. We continually strive to be better every year in areas such as greenhouse gas (GHG) emissions intensity, water usage, and total waste to landfill.
By 2030, we aim to achieve a 10% reduction in GHG emissions intensity and 20% reduction in water usage and total waste to landfill (compared to the baseline year 2020).
Allegion aims to achieve carbon neutral emissions globally by 2050, and we support the UN Sustainable Development Goal to take urgent action on climate change. We know that some communities need time to build necessary energy infrastructure to make this vision a reality. In the meantime, our company is pursuing incremental improvement targets, including meeting Allegion’s electricity needs with carbon-free electricity by 2030 (that is, the energy is produced by a non-fossil fuel source that generates no carbon emissions), and achieving carbon neutrality at 50% of our current sites by 2035.
| Environmental impact (normalized) | 2021 vPY |
|---|---|
| Water usage*+1 | -4% |
| Greenhouse gas (GHG) emissions intensity*+2 | 2% |
| Waste to landfill*+3 | 3% |
| Environmental impact | 2020 volume | 2021 volume |
|---|---|---|
| Water usage+1 | 103.5 mil. gallons | 98.3 mil.gallons |
| Greenhouse gas (GHG) emissions^+2 | 100,277 metric tons (CO2e) | 101,383 metric tons (CO2e) |
| Waste to landfill+3 | 4.3 mil. pounds | 4.4 mil. pounds |
| Hazardous waste disposed+ | 0.6 mil. pounds | 1.3 mil. pounds |
| Electricity used+4 | 113.3 mil. KwH | 115.5 mil KwH |
^ This total is calculated by converting greenhouse gas emissions into metric tons (CO2e) using estimates pursuant to the U.S. EPA greenhouse gas equivalencies calculator.
* Data is normalised to hours worked. To the extent actual hours worked are not available for any full-time employee, an average of 40 hours per week is used.
+ Actual data collected for manufacturing facilities and certain warehouses globally. For all other facilities, data is based on certain estimates as indicated below. From Apr. 1, 2020 through Dec. 31, 2021, a 50% reduction was applied to the below estimates for water usage and waste to landfill in office type locations to take into account the remote work environment during the COVID-19 pandemic.
1 Assumes an average of 15 gallons (or 57 litres) of water used per employee per workday.
2 Calculation includes all scope 1 and 2 emissions except for the company vehicle fleet. Where actual data is not collected, assumes an average of 2,000 BTU of gas usage and 0.6 Kilowatt-hours ("KwH") of electricity usage per square footage per month for warehouse locations and 2,700 BTU of gas usage and 1.5 KwH of electricity usage per square footage per month for office type locations.
3 Assumes an average of 40 lbs. (18 kilograms) of non-hazardous waste per employee per month.
4 Assumes an average of 0.6 KwH of electricity usage per square footage per month for warehouse locations and 1.5 KwH of electricity usage per square footage per month for office type locations.
Additional environmental management information is found in Allegion’s CDP disclosure reporting.
By 2030, we will increase the number of sites with ISO 14001:2015 (environmental management system) certification by 50%, focusing on principal production, assembly & distribution sites.
5 Based on the sites listed in "Item1: Business" of the company's Form 10-K for the related year.
As the 2021 Robert W. Campbell Award winner, Allegion will continue its journey in world-class safety management, as defined by the National Safety Council’s five characteristics: leadership; integrated systems approach; performance measurement; alignment to core organizational initiatives; and corporate citizenship and off-the-job safety.
| Safety incidents | 2020 rate | 2020 vPY | 2021 rate | 2021 vPY |
|---|---|---|---|---|
| Total Recordable Incident Rate (TRIR)* | 0.39 | -9% | 0.38 | -3% |
| Lost Time Incident Rate (LTIR)* | 0.12 | -29% | 0.17 | 42% |
| Allegion incident rate compared to the reported U.S. industry average for incident rates*~ | 88% better | n/a |
* Data is normalised to hours worked. To the extent actual hours worked are not available for any full-time employee, an average of 40 hours per week is used.
~ Based on the latest U.S. average for our general industry (NAICS 332), as reported by the U.S. Bureau of Labor Statistics.
By 2030, we will increase the number of sites with ISO 45001:2018 (safety management system) certification by 50%, focusing on principal production, assembly & distribution sites.
| ISO 45001 (safety management system) certification | 2020 | 2021 |
|---|---|---|
| # of principal production, assembly & distribution sites 6 | 30 | 29 |
| # of principal production, assembly & distribution sites certified 6 | 8 | 8 |
| % of sites certified 6 | 27% | 28% |
6 Based on the sites listed in "Item1: Business" of the company's Form 10-K for the related year.
Allegion continually works to ensure our products are manufactured in a socially responsible manner and comply with all environmental regulations and health and safety standards for the markets we serve.
We are upgrading our global product safety management process for monitoring and reporting product safety-related recalls (as defined by the Consumer Product Safety Commission or equivalent international governing body).
Completed a comprehensive review of current processes in order to draft a uniform global product safety recall policy.
Allegion's Global Product Safety & Regulatory Recall Policy established, consolidating country-level policies into one uniform approach.
Regulatory monitoring, combined with expertise and internal procedures, help ensure comprehensive programs are in place to manage requirements, including Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) legislation, Restriction of Certain Hazardous Substances (RoHS), Waste Framework Directive related to Substances of Concern In Products (WFD-SCIP), and California Proposition 65, and to address our expectations related to conflict minerals, anti-slavery and human trafficking.
Allegion is committed to maintaining responsible sourcing standards for supplier selection across all businesses, including to:
We also proactively assess these factors in their standard audit process and work to reduce the risk profile of those suppliers with self-assessments that place them in a high-risk category.
Established a Sourcing Council to govern and manage supplier risk, supply continuity, and mitigating actions, 2020.
Added the cybersecurity risk metric to the supply risk management process (in addition to the financial, geopolitical, economic, material supply, and other risk categories already in place).
Added privacy impact assessments in the standard work for procurement of services that process personal data of our customers or employees.
In 2021, Allegion launched its supplier diversity program. We are making progress toward our long-term goal of a best-in-class supplier diversity program and expanding opportunities for qualified minority- and women-owned U.S. suppliers.
Established governance and a Supplier Diversity Council, chartered to make our aspirations operational, 2020.
Launched the Supplier Diversity Program in the U.S., 2021.
Diversity is valued in all aspects of our business. The Allegion Board of Directors takes into consideration a broad range of factors such as skills, expertise, business and leadership experience, board experience and viewpoints, including a candidate’s gender, race, ethnicity, geography and other factors that would complement the existing Board and contribute to enhancing the quality of its deliberations and decisions, recognizing that our businesses and operations are diverse and global in nature.
| Board of Directors diversity | Dec. 31, 2020 | Dec. 31, 2021 |
|---|---|---|
| Total # of directors | 8 | 9 |
| Directors, across gender, racial and ethnic diversity | 38% | 44% |
| Directors, women | 13% | 22% |
| Directors, racial or ethnic diversity | 25% | 22% |
Allegion promotes advancement and retention of diverse talent at all levels and is actively working to build the pipeline of available, diverse talent ready for leadership opportunities. To make progress, we are intentionally focusing on expanding diversity of talent in people manager roles, and have set a target of achieving 30% global gender diversity and 20% U.S. racial and ethnic diversity by 2030.
We know that employee engagement has a direct connection to attracting and retaining talent, delivering business results and customer excellence, and we are committed to building a strengths-oriented organization where everyone has the opportunity to do their best. We aspire to be a leader in employee engagement and are striving to reach the top quartile of the overall GrandMean by 2030 (as measured by our global employee census, conducted by Gallup).
| Workforce Diversity 7 | 2020 | 2021 |
|---|---|---|
| Gender diversity, global (% of total workforce) | ||
| Senior leadership team8, women | 27% | 30% |
| Other leaders8, women | 29% | 29% |
| People managers, women | 23% | 24% |
| Individual contributors, women | 37% | 38% |
| Global workforce, women | 36% | 36% |
| Racial and ethnic diversity (% of U.S. workforce) | ||
| Senior leadership team, racial and ethnic diversity | 0% | 10% |
| Other leaders, U.S. | ||
| People of color | 7% | 9% |
| Black/African American | 2% | 2% |
| Hispanic non-Caucasian / Latinx | 0% | 2% |
| Asian | 5% | 5% |
| Other | 0% | 0% |
| People managers, U.S. | ||
| People of color | 13% | 13% |
| Black/African American | 4% | 4% |
| Hispanic non-Caucasian / Latinx | 5% | 5% |
| Asian | 3% | 3% |
| Other | 1% | 1% |
| Individual contributors, U.S. | ||
| People of color | 35% | 36% |
| Black/African American | 19% | 18% |
| Hispanic non-Caucasian / Latinx | 7% | 8% |
| Asian | 6% | 6% |
| Other | 3% | 4% |
| All employees, U.S. | ||
| People of color | 31% | 32% |
| Black/African American | 16% | 16% |
| Hispanic non-Caucasian / Latinx | 7% | 7% |
| Asian | 5% | 5% |
| Other | 3% | 4% |
7 Data as of Sept. 2, 2020 and Sept. 2, 2021. For more information on our U.S. workforce, refer to the EEO-1 report.
8 'Senior leadership team' refers to the members of the company's management, i.e. the Executive Leadership Team (ELT). 'Other leaders' refer to those individuals reporting directly to an ELT member.
In the chart below, the blue line shows Allegion's employee engagement ranking expressed as a percentile when its engagement GrandMean is compared to that of all companies in the Gallup database for a given period. The orange line represents Allegion's engagement GrandMean compared to the subset of companies who are in the manufacturing sector. (In Gallup's percentile ranking, a higher number corresponds to higher engagement compared to others.)
Progress toward 75th percentile 9
Allegion engagement census, 2022
Employee mentoring and coaching programs are offered globally.
Annual individual performance reviews for all salaried employees.
An open feedback culture supports ongoing dialogue on performance and career development.
Employee feedback is also provided through the employee engagement census.
Allegion strives to sustain good corporate governance practices that promote the long-term interests of our shareholders, as described in our goals below.
Allegion's cross-functional ESG Council was established, 2020.
The ESG Materiality Matrix, completed in 2021, is based on input from various stakeholders, including investors, customers, suppliers, architects and builders, and community partners.
Risk management strategies, programs, and policies are reviewed at least annually.
A mature incident and crisis preparedness system is in place, led by the Incident Response Steering Committee.
The Board has an independent lead director and all three Board committees and committee chairs are independent.
The Board of Directors refreshment plan reviewed, periodically.
Participation in a number of industry sustainability initiatives to support product design and lifecycle management. See more in the Environment: Sustainable building and CDP report sections or by reviewing the Business model & innovation section of the SASB reference table.
The Board and its committees have oversight of our risk management system, including: information technology, cybersecurity, privacy, and disruptive technology matters; our ESG system and issues; and the ethics and compliance program.
Allegion conducts periodic enterprise risk management surveys to identify the company’s key risks and resiliency. Subject matter experts from Allegion’s executive leadership team are designated to implement risk monitoring and mitigation strategies and actions for each key risk.
Our ethics and compliance program extends to all employees, the contingent workforce, and our suppliers and business partners.
We deliver code of conduct training to all salaried employees annually (offered in 9 languages), and achieved a 92% completion rate in 2021.
We deliver code of conduct training to all new hires, and achieved a 98% completion rate among salaried employees in 2021.
No direct corporate political donations have been made over the past 5 years (2017-2021), and we do not have a political action committee.
There was a low amount of corporate lobbying expenditures over the past five years (2017-2021), less than $150,000 annually.
The Allegion ethics helpline, supported by a third-party, is available 24 hours a day, 7 days a week, and supports 200 languages, and provides the option to report violations of our code anonymously.
In 2021 the ethics helpline:
We do not tolerate retaliation against anyone who asks questions or raises ethical concerns; legal protection is provided for those who report violations (whistleblowers).
Allegion uses a digital platform to manage our Global Privacy Program to achieve compliance more quickly through automation and enhanced decision-making.
We are using privacy engineering techniques throughout our enterprise systems and our products solutions to drive GDPR and CCPA compliance.
We have integrated privacy-by-design into product development and R&D processes.
