The Access Control ESG Story and Opportunity
Building access expert Lee Odess recently wrote about ESG+R and the physical access control industry opportunity in his monthly Access Control Executive Brief. It received great feedback, so Lee created an abbreviated version to share with CREtech. Please sign up for the Access Control Executive Brief here if you want a more in-depth understanding, just like the writing, or are interested in the access control industry.
We can apply this Access Control and ESG story to the broader physical security industry. But for this article, Lee will stick to the opportunity related to the physical access control industry. Most of you are familiar with ESG (frankly, according to Lee, most of you are far more familiar with it than he is), so he skip's the background and gets right to it.
Lee has a thesis about a missed opportunity within the access control industry concerning ESG, which trickles down to a missed opportunity in the commercial real estate industry.
He also has a call to action for both industries. It is simple for the access control industry - please do something about it. And for the commercial real estate industry - please expect more from your access control systems.
Below is a summary of Lee's thesis:
- The access control industry's ultimate customers, enterprise and commercial real estate developers/operators, are focused on ESG or will be soon.
- The few companies in the access control industry that focus on ESG are too focused on the materials used, how they interact with suppliers, and corporate governance. This narrow focus misses a massive piece of the story the industry should be telling.
- When the access control industry tells a product and solutions story, they focus on the technical and total cost of ownership (TCO) but miss the return on investment (ROI) story that ESG supports.
- The access control industry needs to focus on ESG as it relates to its solution's impact on society, such as safety and security, resulting in positive economic effects (e.g., GDP).
- The S of ESG is the access control industry story and our opportunity. No other industry has the permission or prospect that the access control industry does.
- How the access control industry quantifies it and tells a G still needs to be determined (this is where associations, such as the Security Industry Association, come in).
- And while we are at it, the access control industry should add the R, or as some call it, ESG+R because that is also right in their wheelhouse.
- But Lee take's a solid S and G right now, so let's focus on that.
With the increased focus and importance of ESG, let's look at the opportunity and why the access control industry should care and the commercial real estate industry should expect more from them.
Outside of being a board-level initiative of public and private companies, which makes it a C-Suite and middle management expectation and focus, a majority believe that an ESG focus is good for the environment, society, and people. So, putting aside the intrinsic benefits, Lee summarizes why we should care like this:
It is vital to the access control industry customers (not the access control industry dealers if you are a manufacturer but the access control industry customer's customers) as this is how they are or will be governing their companies. So the access control industry should deliver a message that resonates and supports this initiative. Plus, having safe cities or spaces is typically something everyone can rally around, and the access control industry is critical in delivering safe cities and spaces.
So why not play to the strength?
Think about it like this; the access control industry is already doing it, so why are they not talking about it?
But it will take more than just some marketing or talk to capitalize on the opportunity entirely. The access control industry will need to unite and create the G part, the governance, so there are measured, credible, and easy-to-communicate results behind the high-level messaging. From what Lee is reading and told, the S is not easily understood and is not easy to measure. So the access control industry needs to jump on this fast and start at the beginning. The G is the opportunity associations, such as SIA, have to drive standards and reporting criteria. As Sal D'Agostino, CEO at IDmachines and Co-Founder of Zero Public Network, said at SIA's Securing New Ground conference in October when we were discussing the security industry and Proptech, "A lot of focus on the E, we have a story for S, and a good place to start w G." Well said, Sal.
So let's assume you agree there is an opportunity. But why should you care? You are full of potential initiatives. So, why this one?
Keeping it simple: It just hits differently. If you don't, plenty of companies inside and outside the access control industry will. If you work with an access control company with no ESG+R strategy, they won't be your long-term partner, and you will ultimately be looking for a new one. So why not start expecting it now?
Here are two examples of companies outside the access control industry starting to drive a larger value-add story beyond locking and unlocking or keeping bad people out (typical access control story), including ESG. It took about 5 minutes to find by Googling.
"Infogrid installed discrete door monitors on approximately 8,000 fire safety doors on apartments for one client, ensuring they weren't being propped open for large periods of time. This improves fire safety for occupants. Door sensors can also help monitor security concerns such as tailgating and unauthorised access to ensure certain areas are kept secure. Similarly, sensors can monitor the opening and closing of windows. All of this contributes to a safer environment."
Who is Infogrid? They are an intelligent building tech company focusing on "healthy, efficient, and sustainable" buildings. What they wrote sure sounds a lot like the access control value proposition story.
As another example (which Lee has no inside information on), he would bet the house that Microsoft will integrate their ESG solutions with their Connected Workplace offerings and their RealEstateCore, a smart building ontology for digital twins offering. The Microsoft example is just one of many that you can connect dots on that represent the "easy" lift to surrounding our opportunity and running away with it.
There are countless examples to showcase how easily the bridge can be built where the pressures of these solutions will either do a value arbitrage and commoditize the access control industry or drive specifications earlier in the customer funnel, and the access control industry will be left responding versus driving.
Leading Lee to the question, if the access control industry is not focused on ESG, what are we focused on?
Lee gets it and is empathetic: There is a ton to do and focus on. There are priorities and plenty of opportunities. But if you or your access control provider are a company focused on today and tomorrow, you must recognize this as an opportunity that needs to be worked on today. And as an industry, just like the Infogrid story above shows, someone will if the access control industry doesn't. So the access control industry has the permission and opportunity to tell its own story as an industry. The access control industry is the safety and security people.
OK, here are some suggestions on what to do as an industry, manufacturer, distributor, dealer, individual, and customer.
Curiosity: Make it a point of discussion at your company or with the company you work with. No matter your position. Hold your leadership and your supplier accountable by asking about their point of view on ESG.
Empower: If not you, make it a priority for someone on your team to create a strategy and overview presentation.
Ecosystem: Learn from others, even your competitors. ESG is an "all boats rise" opportunity. Look for best practices from other industries.
Associations: Turn to our associations. Ask for help. Get involved.
Experts: Bring in ESG expert consultants (so there is no confusion… Lee is not one of them. He'd start with talking to James Dice).
Here is where we can get to. Amazon has a well-documented "working backward method" in product development. In that process is writing the press release so you can imagine what the success story will look like.
Here are three of mine:
"The access control industry contributes roughly 5% of global GDP output, making it larger than other industries such as the automobile industry."
"The access control industry and its impact on delivering a safer society have resulted in an increased level of innovation that has increased global productivity year over year by 1%, making it one of the most influential levers we have across the globe."
"The access control industry has helped 92% of the commercial real estate industry achieve its goals of a rating above 70 by impacting the Social portion of ESG ratings for the companies who have prioritized safety and security as a pillar to their ESG initiatives."
What are yours?
Let's make this happen. Let's expect more as an industry and as a customer base. It's 100% in our control and wheelhouse. Lee is happy to help lead, but it will take the community to get it done.