According to a Deloitte survey on millennial buying patterns, 42% of this generation indicates that they would exhibit greater loyalty towards a company if they believed it had a positive societal impact.
In January 2004, the genesis of ESG (Environmental, Social, and Governance) investing unfolded.
The former UN Secretary General, Kofi Annan, reached out to over 50 CEOs of prominent financial institutions, urging their participation in a collaborative initiative supported by the UN Global Compact, the International Finance Corporation (IFC), and the Swiss Government. The primary objective of this initiative was to explore ways to integrate ESG factors into capital markets.
A year later, the initiative yielded a comprehensive report titled 'Who Cares Wins,' authored by Ivo Knoepfel. The report effectively argued that the incorporation of environmental, social, and governance considerations into capital markets not only makes good business sense but also fosters the development of more sustainable markets and delivers better outcomes for societies at large.
Today, with global initiatives such as the United Nation's 2030 Agenda for Sustainable Development and the aggravating climate crisis, the commitment to sustainable practices and ESG as a whole has become essential.
Companies are now expected to strive for targets that align with the triple bottom line: people, planet and profit.
While ESG has been recognised as a key concept for a few years, its influence in the security and surveillance sector has been gradual.
To flourish as a business within this industry, ESG needs to be at the forefront of operations with initial actions involving creating awareness about existing challenges as well as urging companies to enhance their products and services to align with the principles of environmental sustainability, social responsibility and sound governance practices.
Environmental Responsibility
Environmental sustainability denotes how companies manage their environmental footprint on society without undermining ecological integrity. This involves addressing critical climactic concerns such as biodiversity loss and pollution.
Typical initiatives that businesses are implementing to combat these issues cover cutting CO2 emissions, lowering energy usage and reducing waste.
With net zero becoming a prominent buzzword in recent years, renewable energy solutions and products are also gaining traction.
As an example, Dahua Technology has actively adopted solar power system design in various application scenarios which not only reduces the energy consumption of the product itself but also decreases the use of installation materials and long cables needed, reducing the carbon footprint in the process of product use.
Similarly, Sunstone Systems is seeing significant achievements within the solar-powered CCTV sector. In October 2022, the company secured an additional £1 million in equity finance to fund the expansion of its wireless surveillance solutions using renewable energy.
Social Impact
Social sustainability pertains to the impact of business practices on people and society as a whole.
In the security industry, the widespread adoption of advanced technologies such as artificial intelligence (AI), the Internet of Things (IoT) and big data are seeing greater adoption in a large number of vertical markets.
According to Omdia, their growth will accelerate so much that revenues associated with AI processes will double between 2022 and 2026.
With this in mind, addressing concerns related to the ethical and responsible use of these technologies is of utmost importance.
In an effort to improve lives and inspire communities around the world, Honeywell has used its technology to deliver STEM programmes globally since 2004. For instance, teachers in the Atlanta area have received computational and coding training at the Honeywell-sponsored STEM Teacher Leadership Programme at the Georgia Institute of Technology.
Dahua Technology also keeps fulfilling its social responsibility by not purchasing and using conflict materials in the supply chain. Through carrying out periodic investigations on the suppliers, the company can guarantee supply from conflict-free smelters.
Corporate Governance
Corporate governance relates to the very heart of the organisation - how it is run, its transparency and integrity.
Arguably, it is the most relevant component when it comes to the security and surveillance industry given that information security and compliance with data protection regulations are crucial to maintain customer trust and prevent potential legal and reputational risks.
For example, at the end of 2022, Axis introduced a dedicated private bug bounty programme strengthening their commitment to building professional relationships with external security researchers and ethical hackers and reinforcing their ability to proactively identify, patch and disclose vulnerabilities in AXIS OS.
Motorola Solutions is also committed to solid corporate governance as seen through its Motorola Solutions Technology Advisory Committee (MTAC), which conducts risk assessments for new technologies, testing them against the company's purpose and ethics.
Conclusion
Companies operating in the security and surveillance field may meticulously plan their operations, aiming to generate quarterly returns and develop strategies for the long term.
However, if they disregard the potential erosion of their social license or in other words, fail to comply with ESG standards, their forecasts and their core strategies may not be achievable at all.
Ultimately, the goal is to ensure the enduring success of the business, with societal support, in a sustainable and environmentally responsible way.
