INTRODUCTION
Allegion believes businesses have a central role to play in respect for human rights, combating modern slavery and human trafficking. In staying true to one of our core values “Do the right thing” we prohibit and have zero tolerance for all forms of modern slavery, human trafficking and child exploitation throughout our global organization, operations and supply chains.
We are strongly committed to fair labor practices and the protection of workers against labor rights violations. Allegion will continue to maintain and improve processes while reviewing, updating and implementing systems and controls to ensure that our business and supply chains across the globe are free of such practices.
This statement constitutes our modern slavery and human trafficking statement for the fiscal year ended 31 December 2022 and is made pursuant to Section 54 of the UK Modern Slavery Act 2015, Part 2 of the Australian Modern Slavery Act of 2018, and the California Supply Chains Act of 2010 (SB 657). These Acts require Allegion to disclose our efforts to combat modern slavery and human trafficking and detail the steps Allegion has taken to ensure such practices are not taking place in our business and supply chains. We will continue to review and publish this statement annually for Allegion plc, Allegion (UK) Limited, Allegion Investments (UK) Limited and Allegion (Australia) Pty Ltd.
ORGANIZATIONAL STRUCTURE
Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, businesses, schools and institutions.
Allegion had $3.3 billion of revenue in 2022, and its security products are sold around the world.
Our global headquarters is located in Dublin, Ireland. We have two operating segments, Allegion Americas and Allegion International. To learn more about our business, or to review our annual report, please visit www.allegion.com.
SUPPLY CHAIN
Allegion is in the Security Industry and while mechanical hardware is the foundation of our business, Allegion also provides digital, mobile and interconnected electronic solutions to global markets. Specializing in security around the door, Allegion manufactures electronic and mechanical locks, door closers, exit devices, steel doors and frames among other products, and creates practical safety solutions including wireless connectivity and cloud technology.
With over 30 manufacturing sites around the world and multiple distribution centers spread across five continents, our Global Supply Management team is responsible for purchasing products and services from external partners used to manufacture products, deliver those products to our customers and run the day-to-day operations of our business.
Allegion’s supply chain includes suppliers in Americas, Europe, Middle East and Asia Pacific regions. Activities involve the transformation of zinc, brass, steel and other materials into parts used to build Allegion products and include various manufacturing processes to create supplementary components and key electronic mechanisms.
Allegion’s supply chain structure supports the complexities of global supply and manages associated risks, including compliance with regulatory directives and monitoring suppliers’ performance and financial stability. The supply chain structure includes a strategic sourcing team of commodity managers responsible for managing purchased components. Commodity managers create and execute commodity playbooks, select suppliers, manage supplier relationships and performance, and lead commercial activities (agreements, pricing, payment terms, etc.).
ORGANIZATIONAL POLICIES
Our commitment to ethical behavior and compliance can be found throughout our policies and our Allegion Code of Conduct. We believe that the fundamental values set forth in these policies and our Code of Conduct serve as our global minimum business standard. For example, Allegion has policies and procedures in place to ensure the procurement of goods and services is conducted in an honest, competitive, fair and transparent manner that delivers the best combination of quality, value and risk from our suppliers in support of Allegion’s global enterprise goals.
To ensure our policies and guidelines reflect industry best practices, Allegion is a member of Gartner Legal & Compliance, a global research and advisory firm providing information and guidance for the continued development of compliance and ethics related programs. We also actively participate in CTPAT (Customs Trade Partnership against Terrorism) and the AEO (Authorized Economic Operator) programs to help facilitate best supply chain security standards. Further, Allegion is a voting member of the Social Responsibility Alliance and participate on the Slavery & Trafficking Risk Template (STRT) Development Committee, the organization that maintains the standardized STRT used globally by companies in their supply chain transparency programs.
As defined in our Allegion Code of Conduct for Business Partners, Allegion also expects that our business partners, including our suppliers, vendors, consultants and contractors adopt and enforce standards similar to those defined in our policies which are included as links below.
Allegion Code of Conduct and Corporate Governance Documents:
https://www.allegion.com/corp/en/about/corporate-governance.html
Allegion Code of Conduct for Business Partners and supplier documentation:
Allegion Code of Conduct for Business Partners.pdf
https://www.allegion.com/suppliers
Corporate Social Responsibility and ESG:
https://www.allegion.com/csr
Allegion Conflict Minerals Policy:
https://www.allegion.com/corp/en/about/csr/sustainability-and-safety/conflict-minerals.html
Global Human Rights Policy:
https://www.allegion.com/corp/en/about/ESG/governance/corporate-governance.html#human-rights
VERIFICATION AND DUE DILIGENCE
Allegion has partnered with a third-party provider, Assent, to assist with the identification and risk mitigation of modern slavery and human trafficking practices throughout our global supply chain. Allegion uses the Global Slavery Index (GSI) and the U.S. Department of State Trafficking In Persons Report (TIP) to identify geographical high-risk areas where direct spend suppliers are located. After establishing the supplier subset, an email campaign is launched to request the suppliers complete a self-assessment. The self-assessment evaluates the risk of slavery and human trafficking using an industry standard survey, the Slavery & Trafficking Risk Template (STRT) available at www.sraglobal.org. In 2022, we campaigned on the updated version 3.1 of the STRT. The revisions to the updated STRT were designed to assess commodity specific risks and allow flexibility to select between focusing on modern slavery and/or child labor topics, along with identifying specific locations relevant to human rights concerns.
Our approach enables us to assess the strength of the supplier’s risk mitigation activities in relation to their risk exposure based on geographical location, industry, use of labor brokers and workforce characteristics, and it serves as the initial assessment of potential risk within our supply chain. Engagement of the suppliers in completing the risk assessment process and providing supporting documentation enables us to raise supplier awareness, foster constructive dialogue and engage their support in helping us maintain our commitment to combat and mitigate slavery and trafficking risk in the supply chain. Allegion has continued to expand our survey range and repeat supplier assessments to monitor for status change.
The risk related to human trafficking and modern slavery is escalated as part of our commodity management risk process. The Allegion supplier risk management process is designed to improve the performance levels of our suppliers and reduce or eliminate risk to plant operations. The measured risks include financial, economic, legal, regulatory, geopolitical, availability, geographical and contract. A sourcing council manages the supply risk process and risk mitigation plans.
The Uyghur Forced Labor Prevention Act (signed into law Dec. 23, 2021) effectively deemed all goods mined, produced, or manufactured in the Xinjiang Uyghur Autonomous Region (“XUAR”) to be produced by forced labor in China. Under the law, the United States bans importation of all goods made in whole or in part from the Xinjiang Uyghur Autonomous Region in China. As a result, we have taken steps to evaluate our risk in the Xinjiang Region. Review and analysis of our suppliers did not identify any confirmed links to the Xinjiang Uyghur Autonomous Region. To discover any potential supplier connections to the XUAR, our team reached out to strategic suppliers operating in China and received affirmative confirmation from such suppliers that their operating and sourcing locations were all outside of the XUAR. Additionally, we have expanded our due diligence processes to include investigation of any potential links to the Xinjiang Uyghur Autonomous Region.
Allegion’s Code of Conduct reinforces our commitment to following the law in all places where we do business, and it applies to all of our officers, employees and directors. Our Code guides our business relationships with customers and suppliers and emphasizes Allegion expectations from shareholders, government regulators and the communities we serve.
All Allegion employees must integrate our Code into their work for the Company. Violation of the Code of Conduct may result in discipline, up to and including, termination of employment and/or reporting of the misconduct to the relevant government authorities.
Allegion is committed to working with our suppliers to both mitigate and address any identified risk. As part of our terms and conditions of purchase, we require all suppliers to comply with applicable local law and regulations.
Additionally, our terms and conditions state that our suppliers will not utilize child, slave, prisoner or any other form of forced or involuntary labor, or engage in abusive employment or corrupt business practices.
Our terms and conditions also require all suppliers to follow our Business Partner Code of Conduct, the violation of which may result in termination of the supplier relationship and/or reporting of the misconduct to the relevant authorities.
Allegion has an established Helpline to help ensure concerns regarding lawful and ethical behavior are reported and to maintain compliance with Allegion’s Code of Conduct and ethical sourcing policies and guidelines.
This confidential, non-retaliatory resource is available for any internal and external stakeholder to inform Allegion of concerns or report findings of non-compliance by sending an e-mail or by using our third-party hotline.
Reports can be made anonymously and will be kept confidential to the extent practicable and allowed by law.
Email: EthicsandCompliance@allegion.com
Phone: 800 461 9330 (United States and Canada)
TRAINING AND CAPACITY BUILDING
Training on modern slavery and anti-human trafficking and related regulations is available through our third-party provider, Assent. With this training platform, both internal personnel and suppliers can build their capacity to identify and respond to slavery and human trafficking risks. Annually, we review internal personnel with responsibility for supplier relationships in order to assign training and ensure awareness of relevant human rights concerns.
In addition to training, continuing education webinars for our supply chain team are provided through Assent to help us better understand identification of, and risk mitigation of, any violations.
CLOSING/ RESPONSIBILITY
The Allegion Board of Directors has overall responsibility for ensuring this statement complies with our legal and ethical obligations, and that all those under our control comply with it.
This statement was approved by the Board of Allegion plc on June 8, 2023.
By: /s/ John H. Stone
John H. Stone
President and Chief Executive Officer
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