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 creates the progress of where we've been and the goals for where we are going.


Environmental

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.

Environmental Impact

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. 

 

Environmental management system certifications

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.

ISO 14001:2015 (environmental management system) certification 2020  2021
# of principal production, assembly & distribution sites  30 29
# of principal production, assembly & distribution sites certified 5 11 11
% of sites certified 5  37% 38%

5 Based on the sites listed in "Item1: Business" of the company's Form 10-K for the related year. 


Social

Employee Safety

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. 

Safety management system certification

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  27% 28%

6 Based on the sites listed in "Item1: Business" of the company's Form 10-K for the related year. 

Product quality and safety

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).

Standards and milestones

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Completed a comprehensive review of current processes in order to draft a uniform global product safety recall policy.

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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.

Supplier management

Allegion is committed to maintaining responsible sourcing standards for supplier selection across all businesses, including to:

  • Continually reduce our supplier risk profile through supplier auditing, supplier performance management, supply design development, alternate supplier identification, geographical diversification and monitoring of financial, geopolitical, economic, legal, cybersecurity and other risk categories.
  • Improve visibility throughout our supply chain tiers to manage risk and supply continuity, globally. 
  • Educate managed suppliers and spread awareness of our policies on modern day slavery and anti-human trafficking. 

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.

Standards and milestones

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Established a Sourcing Council to govern and manage supplier risk, supply continuity, and mitigating actions, 2020.

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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).

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Added privacy impact assessments in the standard work for procurement of services that process personal data of our customers or employees.

For more on privacy milestones, click here.

Supplier diversity

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.

Standards and milestones

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Established governance and a Supplier Diversity Council, chartered to make our aspirations operational, 2020.

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Launched the Supplier Diversity Program in the U.S., 2021.

Board diversity

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%

Employee engagement, equity, inclusion and diversity

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.)

Employee engagement GrandMean percentile

Progress toward 75th percentile 9

Safe Exit

9 Percentiles are based on Gallup’s Q12 Manufacturing Company Database and the Q12 Overall Company Level Database from the survey year. GALLUP is a registered trademark of Gallup, Inc. and the property of its owner.
x 2017 pulse survey, a representative sample rather than the full census.

Employee participation rate

Allegion engagement census, 2022

Safe Exit

Governance

Allegion strives to sustain good corporate governance practices that promote the long-term interests of our shareholders, as described in our goals below.

Enterprise risk management

  • Maintain Board 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. 
  • Ensure risk management strategies, programs, and policies are reviewed at least annually. 

Standards and milestones

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Allegion's cross-functional ESG Council was established, 2020.

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Risk management strategies, programs, and policies are reviewed at least annually.

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A mature incident and crisis preparedness system is in place, led by the Incident Response Steering Committee.

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The Board has an independent lead director and all three Board committees and committee chairs are independent.

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The Board of Directors refreshment plan reviewed, periodically.

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The ESG Materiality Matrix, completed in 2021, is based on input from various stakeholders, including investors, customers, suppliers, architects and builders, and community partners.

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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.

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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.

Ethics, compliance, privacy and cybersecurity management

  • Annually deliver code of conduct training to salaried employees.
  • Regularly deliver sexual harassment training to salaried employees, consistent with local requirements. 
  • Encourage all employees, contingent workforce, suppliers and other business partners to report violations of our code and provide multiple means for them to do so, including anonymous reporting in multiple languages.
  • Maintain a multi-faceted and comprehensive cybersecurity training program throughout the year, that addresses the needs of all necessary personnel.
  • Maintain compliance in the continuously changing environment of global privacy and cybersecurity laws and regulations.

Business ethics, compliance and political influence

Standards and milestones

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Our ethics and compliance program extends to all employees, the contingent workforce, and our suppliers and business partners.

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We deliver code of conduct training to all salaried employees annually (offered in 9 languages), and achieved a 92% completion rate in 2021.

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We deliver code of conduct training to all new hires, and achieved a 98% completion rate among salaried employees in 2021.

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No direct corporate political donations have been made over the past 5 years (2017-2021), and we do not have a political action committee.

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There was a low amount of corporate lobbying expenditures over the past five years (2017-2021), less than $150,000 annually.

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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.

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In 2021 the ethics helpline:

  • Received 26 total number of allegations / complaints; and  
  • By the end 2022, all allegations/complaints will be resolved in an average of 60 days.
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We do not tolerate retaliation against anyone who asks questions or raises ethical concerns; legal protection is provided for those who report violations (whistleblowers).

Privacy

Standards and milestones

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Allegion uses a digital platform to manage our Global Privacy Program to achieve compliance more quickly through automation and enhanced decision-making.

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We are using privacy engineering techniques throughout our enterprise systems and our products solutions to drive GDPR and CCPA compliance.

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We have integrated privacy-by-design into product development and R&D processes.