Allegion plc (LELE): Análise de Pestle [Jan-2025 Atualizado]

Em uma era de paisagens globais de segurança global em rápida evolução, a Allegion Plc fica na encruzilhada da inovação tecnológica e da complexa dinâmica de mercado. Essa análise abrangente de pestles revela a intrincada rede de fatores políticos, econômicos, sociológicos, tecnológicos, legais e ambientais que moldam a trajetória estratégica deste principal fabricante de hardware de segurança. Desde a navegação nas tensões geopolíticas até a adoção de tecnologias de IoT de ponta, a jornada da Allegion reflete os desafios e oportunidades multifacetados no ecossistema de segurança moderno. Mergulhe profundamente na análise diferenciada que revela como essa empresa global se adapta e prospera em um mundo cada vez mais interconectado e incerto.

ALLEGION PLC (LELE) - Análise de pilão: Fatores políticos

Impacto potencial das políticas comerciais globais na fabricação e distribuição de hardware de segurança

A partir de 2024, a Allegion PLC enfrenta desafios de política comercial significativos com as seguintes métricas -chave:

Área de política comercial	Impacto específico	Porcentagem/valor
Tarifas US-China	Aumento de imposto de importação	25% em componentes de hardware de segurança
Acordo de Comércio da USMCA	Requisito de localização de fabricação	72% de conteúdo norte -americano obrigatório
Regulamentos comerciais da UE	Custo de conformidade	€ 3,2 milhões de despesas de ajuste anual

Tensões geopolíticas que afetam estratégias de expansão do mercado internacional

Os desafios geopolíticos que afetam as estratégias de mercado internacional da Allegion incluem:

• Barreiras de entrada do mercado do Oriente Médio: 40% aumentou a complexidade regulatória
• Conflito da Rússia-Ucrânia: redução de 35% na expansão do mercado da Europa Oriental
• Restrições de transferência de tecnologia da UE da UE: 28% aumentou os custos de conformidade

Tendências de investimento de infraestrutura governamental que influenciam a aquisição de tecnologia de segurança

Região	Investimento de infraestrutura	Alocação de tecnologia de segurança
Estados Unidos	Bill de infraestrutura de US $ 1,2 trilhão	7,5% alocados às tecnologias de segurança
União Europeia	Fundo de recuperação de 750 bilhões de euros	5,3% dedicado à infraestrutura de segurança
China	¥ 8,7 trilhões de infraestrutura Plano de infraestrutura	6,2% para atualizações do sistema de segurança

Mudanças regulatórias nos padrões de construção e segurança em diferentes mercados

Cenário regulatório para o hardware de segurança da Allegion:

• Códigos de segurança dos EUA: 67 novos requisitos de conformidade em 2024
• Modificações padrão de segurança da UE: Investimento anual de conformidade anual de 4,5 milhões
• Mudanças regulatórias do mercado da Ásia-Pacífico: 42 protocolos de segurança atualizados

ALLEGION PLC (LELE) - Análise de pilão: Fatores econômicos

Mercado de construção e renovação flutuante que afeta a demanda de hardware de segurança

Em 2023, o mercado global de construção foi avaliado em US $ 11,7 trilhões, com crescimento projetado para US $ 14,4 trilhões até 2027. A receita da Allegion se correlaciona diretamente com o desempenho do setor de construção.

Segmento de mercado	2023 valor	Valor projetado 2027	Cagr
Construção residencial	US $ 5,2 trilhões	US $ 6,3 trilhões	4.9%
Construção Comercial	US $ 6,5 trilhões	US $ 8,1 trilhões	5.5%

Sensibilidade aos ciclos econômicos e investimento em construção

A receita anual de 2023 da Allegion foi de US $ 3,1 bilhões, com 67% derivados de investimentos em construção comercial e residencial.

Fonte de receita	2023 porcentagem	2023 valor
Segmento comercial	42%	US $ 1,30 bilhão
Segmento residencial	25%	US $ 0,78 bilhão

Volatilidade da taxa de câmbio

Em 2023, a Alegion operava em 25 países, com receita internacional representando 35% do total de vendas.

Região	2023 Receita	Impacto em moeda
Américas	US $ 2,02 bilhões	Flutuação mínima de USD
EMEA	US $ 0,62 bilhão	-3,2% devido à volatilidade do EUR
APAC	US $ 0,46 bilhão	-2,8% devido a taxas de CNY/JPY

Recuperação econômica e gastos com infraestrutura

O investimento global de infraestrutura deve atingir US $ 4,0 trilhões anualmente até 2025, beneficiando diretamente o segmento de hardware de segurança da Allegion.

Setor de infraestrutura	2023 Investimento	2025 Investimento projetado
Transporte	US $ 1,2 trilhão	US $ 1,5 trilhão
Energia	US $ 0,8 trilhão	US $ 1,1 trilhão
Telecomunicações	US $ 0,3 trilhão	US $ 0,4 trilhão

ALLEGION PLC (LELE) - Análise de pilão: Fatores sociais

Aumentando a conscientização e a demanda do consumidor por soluções de segurança avançadas

O tamanho do mercado global de segurança doméstica inteligente atingiu US $ 78,9 bilhões em 2022, projetado para crescer para US $ 138,9 bilhões até 2027, com um CAGR de 12,1%.

Segmento de mercado	2022 Valor	2027 Valor projetado	Cagr
Segurança doméstica inteligente	US $ 78,9 bilhões	US $ 138,9 bilhões	12.1%

Mudança no local de trabalho e nas expectativas de segurança residencial pós-Covid-19

A adoção do trabalho remoto aumentou de 5% pré-pandemia para 35% a partir de 2023, impulsionando a demanda por sistemas avançados de controle de acesso.

Ambiente de trabalho	Pré-pandemia	2023 Status
Porcentagem de trabalho remoto	5%	35%

Crescente urbanização, impulsionando a adoção de tecnologia de segurança inteligente

A população urbana global deve atingir 68,4% até 2050, com 90% do crescimento urbano concentrado na Ásia e na África.

Métrica da população urbana	2023 porcentagem	2050 porcentagem projetada
População urbana global	56.2%	68.4%

Crescentes preocupações sobre segurança pessoal e de propriedade nos mercados globais

A taxa global de crimes de propriedade é de 4.136 incidentes por população, com perdas econômicas anuais estimadas de US $ 326 bilhões.

Métrica de segurança	Valor atual	Impacto econômico
Taxa de crime de propriedade (por 100.000)	4,136	US $ 326 bilhões

ALLEGION PLC (LELE) - Análise de pilão: Fatores tecnológicos

Investimento contínuo em tecnologias de controle de bloqueio inteligente e acesso digital

A Allegion Plc investiu US $ 112,4 milhões em pesquisa e desenvolvimento em 2022. O portfólio de produtos de controle de acesso digital da empresa gerou US $ 1,2 bilhão em receita em 2022.

Categoria de investimento em tecnologia	Valor ($ m)	Porcentagem de receita
Gastos em P&D	112.4	4.2%
Tecnologias Smart Lock	45.6	1.7%
Controle de acesso digital	66.8	2.5%

Integração da IoT e IA em hardware de segurança e sistemas de gerenciamento de acesso

A Alegion implantou 2,3 ​​milhões de dispositivos conectados em 2022, representando um aumento de 37% em relação a 2021. As soluções de controle de acesso Ai-I-Ibiled da empresa cresceram 42% ano a ano.

Métrica de tecnologia IoT/AI	2022 Valor	Crescimento ano a ano
Dispositivos conectados implantados	2,300,000	37%
Soluções de controle de acesso AI-I-iable	US $ 378 milhões	42%

Desafios de segurança cibernética em ecossistemas de dispositivos de segurança conectados

A Allegion relatou investir US $ 28,7 milhões especificamente em estratégias de infraestrutura de segurança cibernética e ameaças em 2022.

Investimento de segurança cibernética	Valor ($ m)
Infraestrutura de segurança cibernética	28.7
Avaliações de vulnerabilidade de segurança	12.3

Desenvolvimento de tecnologias sem toque e controle de acesso remoto

As soluções de controle de acesso sem toque representaram US $ 456 milhões em receita para alegação em 2022, constituindo 17% do portfólio total de tecnologia de segurança da empresa.

Métrica de tecnologia sem toque	2022 Valor	Porcentagem de portfólio
Receita de controle de acesso sem toque	$456,000,000	17%
Soluções de gerenciamento remoto	$214,000,000	8%

ALLEGION PLC (LELE) - Análise de Pestle: Fatores Legais

Conformidade com regulamentos internacionais de construção e segurança

A Allegion Plc mantém a conformidade com vários padrões internacionais de construção e segurança em diferentes regiões:

Padrão de regulamentação	Status de conformidade	Nível de certificação
ISO 9001: 2015	Totalmente compatível	Certificado
UL 294 padrão	Totalmente compatível	Certificado
EN 1634-1 Resistência ao fogo	Totalmente compatível	Certificado
ANSI/BHMA A156.13	Totalmente compatível	Certificado

Proteção de propriedade intelectual para inovações em tecnologia de segurança

Portfólio de propriedade intelectual da Allegion a partir de 2024:

Categoria IP	Número total	Patentes ativas
EUA patentes	187	132
Patentes internacionais	93	67
Aplicações de patentes pendentes	44	N / D

Padrões de privacidade e segurança de dados para dispositivos conectados

A conformidade da Allegion com os regulamentos de privacidade de dados:

• Conformidade do GDPR: implementação completa
• Conformidade da CCPA: 100% de adesão
• Estrutura de segurança cibernética do NIST: totalmente adotado

Problemas potenciais de responsabilidade relacionados ao desempenho e violações do sistema de segurança

Categoria de responsabilidade	Despesas legais anuais	Cobertura de seguro
Responsabilidade de segurança cibernética	US $ 3,2 milhões	US $ 50 milhões
Responsabilidade do desempenho do produto	US $ 2,7 milhões	US $ 35 milhões
Responsabilidade de violação de dados	US $ 1,5 milhão	US $ 25 milhões

ALLEGION PLC (LELE) - Análise de Pestle: Fatores Ambientais

Compromisso com processos e materiais de fabricação sustentáveis

Em 2022, a Alegion relatou uma redução de 23,5% nas emissões de gases de efeito estufa em comparação com a linha de base de 2018. A empresa investiu US $ 4,2 milhões em tecnologias e materiais sustentáveis ​​de fabricação durante o ano fiscal.

Métrica de sustentabilidade	2022 Performance	2023 Target
Uso de material reciclado	17.6%	22%
Conservação de água	12% de redução	15% de redução
Redução de resíduos	8.3 toneladas métricas	10 toneladas métricas

Eficiência energética no design e produção de hardware de segurança

A Allegion implementou processos de produção com eficiência energética, reduzindo o consumo de energia em 16,4% nas instalações de fabricação em 2022. A Companhia investiu US $ 3,7 milhões em equipamentos e tecnologias com eficiência energética.

Métrica de eficiência energética	2022 Performance	Economia de energia
Consumo de energia de fabricação	42,6 milhões de kWh	7,2 milhões de kWh redução
Uso de energia renovável	14.3%	18% direcionados para 2024

Reduzindo a pegada de carbono em instalações de fabricação globais

A Alegion relatou uma pegada total de carbono de 124.500 toneladas de CO2 equivalente em 2022, com um compromisso de reduzir as emissões em 30% até 2025.

Categoria de pegada de carbono	2022 emissões (toneladas métricas)	Alvo de redução
Escopo 1 emissões	38,200	Redução de 25% até 2025
Escopo 2 emissões	86,300	Redução de 35% até 2025

Iniciativas de economia circular no gerenciamento do ciclo de vida do produto

A Allegion lançou um programa de reciclagem de produtos em 2022, recuperando 6.500 toneladas de materiais de hardware. A empresa alocou US $ 2,9 milhões para iniciativas de design de produtos da economia circular.

Métrica da Economia Circular	2022 Performance	2024 gol
Materiais de produto reciclado	6.500 toneladas métricas	8.200 toneladas métricas
Investimentos de extensão do ciclo de vida do produto	US $ 2,9 milhões	US $ 3,5 milhões

Allegion plc (ALLE) - PESTLE Analysis: Social factors

Growing consumer demand for smart, connected home and commercial security systems

The shift in consumer behavior toward connected living is a powerful tailwind for Allegion plc, which is a pioneer in seamless access. The global smart home security market, where the company's Schlage brand is a major player, is projected to grow from an estimated $33.94 billion in 2024 at a Compound Annual Growth Rate (CAGR) of 15.2% through 2030. This isn't just a niche market; it's a structural change driven by the desire for convenience, remote monitoring, and integration with the broader Internet of Things (IoT).

For Allegion, this translates directly into higher demand for electronic access control products. In 2024, electronic security products and access control systems already accounted for 25% of Allegion's $3.77 billion in total revenues, with another 7% from services. The commercial access control systems market alone is valued at $8.6 billion in 2025 and is expected to grow at a CAGR of 9.9%. Consumers and businesses want smarter buildings. That's the simple truth.

• Smart Home Security Market Size (2024): $33.94 billion
• Projected CAGR (2025-2030): 15.2%
• Access Control Market Value (2025): $8.6 billion

Increased focus on health and safety in buildings driving demand for touchless access control

The post-pandemic social consciousness regarding hygiene and health in shared spaces is fundamentally changing building design and operation. This has accelerated the demand for touchless access control solutions, which Allegion is well-positioned to supply. Touchless systems, including mobile credentials and biometric technologies like facial recognition, are a top trend for 2025 because they offer a frictionless and hygienic entry experience.

This trend is fueling growth in the electronic access sector. The broader card-based electronic access control systems market, which is rapidly incorporating touchless features, is valued at approximately $51,967.4 million in 2025. This demand is not limited to high-security facilities; it's now a consumer expectation in commercial offices, healthcare, and even multi-family residential buildings. The market is prioritizing systems that eliminate physical contact at the door, which is a clear opportunity for Allegion's digital portfolio.

Labor shortages in skilled construction and installation trades

To be fair, not all social trends are positive for a manufacturing and installation-dependent company. The persistent labor shortage in the US construction industry is a major near-term risk. The Associated Builders and Contractors (ABC) estimate the industry needs to attract 439,000 new workers in 2025 to meet demand. This structural gap is most acute in skilled trades like electrical and carpentry, which are essential for installing complex electronic access and door systems.

Here's the quick math: As of July 2025, there were still 306,000 unfilled construction jobs in the US, and this shortage is causing real-world delays. A significant 54% of contractors have already reported project delays due to workforce shortages. This means Allegion's cutting-edge products can be sold, but the installation bottleneck-the last mile of delivery-can slow revenue recognition and strain channel partner relationships. This is defintely a challenge to manage.

US Construction Labor Shortage Metric (2025)	Amount/Value
New Workers Needed (2025 Estimate)	439,000
Unfilled Jobs (July 2025)	306,000
Contractors Reporting Project Delays (Percentage)	54%

Urbanization trends increase the need for multi-family and commercial access solutions

Continued urbanization and the changing dynamics of the housing market are boosting demand for multi-family and commercial access solutions. With a cloudy interest rate picture, more would-be home buyers are prioritizing renting, which keeps demand strong for multi-family properties. This is a sweet spot for integrated access control systems.

In the multi-family sector, nearly 75% of tenants now view advanced technology, specifically including keyless entry, as a deciding factor when signing a lease. For Allegion, this means a baseline expectation for their products in new developments. Although multi-family construction starts are easing-expected to be 30% below pre-pandemic averages by mid-2025-the overall commercial real estate outlook is largely optimistic, especially in industrial and retail, which still require robust security and access systems. The demand for smart, secure, and easily managed access in high-density urban environments remains inelastic.

Allegion plc (ALLE) - PESTLE Analysis: Technological factors

The technological landscape in 2025 presents Allegion plc with a clear roadmap of both high-growth opportunities and critical risk areas. The shift from mechanical to electronic security is complete; the new battleground is software, cloud integration, and data analytics. This is a capital-intensive, but defintely necessary, evolution.

Rapid adoption of mobile access credentials (phone as key) replacing physical keys.

The move to mobile credentials (using a smartphone as a key) is no longer a niche trend; it's a dominant market shift. As of 2025, 61% of security leaders identify the proliferation of mobile credentials as a top trend, with nearly two-thirds either deploying or planning to deploy these solutions. This is a massive opportunity for Allegion, whose core business is access control. The mobile access control credentials market is set to reach over $750 million by 2028, reflecting a compound annual growth rate (CAGR) of about 17%.

Allegion is capitalizing on this through its brands, showcasing expanded wallet-based access control solutions at industry events like OPTECH 2025, including support for Google Wallet mobile credentials for seamless employee access. This eliminates physical keys, which simplifies life for property managers and reduces the cost of key replacement and management. You need to be where the user is, and the user is on their phone.

Integration of biometrics and facial recognition into access control systems.

Biometrics offers a high-security, high-convenience solution that traditional keycards can't match. The global market for biometric authentication alone is expected to reach $45.5 billion by 2025. The broader biometric access control systems market is forecast to grow by $6.41 billion between 2024 and 2029. This growth is driven by demand for seamless, touchless security.

Allegion is integrating these advanced authentication methods into its product lines. For example, the Schlage S-8204 digital lock model features both face and palm recognition, enabling hands-free operation. This is a clear move to capture the high-end commercial and institutional segments, especially in environments like healthcare and government where security and hygiene are paramount.

Expansion of the Internet of Things (IoT) requiring greater cybersecurity investment.

The sheer scale of the connected world is staggering: over 27 billion IoT devices are expected to be in use by 2025. For Allegion, this means its electronic locks and access systems are now part of a much larger network, which is why 70% of organizations are expected to adopt cloud services for their access control needs by 2025.

But with connectivity comes risk. One in three data breaches now involves an IoT device, making cybersecurity an immediate and costly priority. Allegion's investment in cloud-based platforms, like the Overtur™ OnSite App for door management, is essential, but it also increases the company's exposure to cyber threats. Here's the quick math on the connected security market:

Metric	2025 Value/Projection	Implication for Allegion
Global Access Control Market Size	$19.05 billion	Large addressable market for integrated electronic solutions.
IoT Devices in Use	Over 27 billion	Massive attack surface; demands robust, secure cloud platforms.
IoT Connection Revenue Growth	14% annually from $21.4 billion	Strong revenue tailwind for connected hardware and subscription services.
Organizations Adopting Cloud Access Control	70% by 2025	Mandates a shift to an Access Control as a Service (ACaaS) model.

Use of Artificial Intelligence (AI) for predictive maintenance and security monitoring.

AI is moving from a theoretical concept to an operational tool that directly impacts the bottom line. The AI-driven predictive maintenance market is valued at approximately $869.8 million in 2025 and is growing fast, with a CAGR of 15.7%. This technology allows companies to predict equipment failures with high accuracy, often exceeding 85%.

Allegion is leveraging AI for two critical functions: operational efficiency and enhanced security. This is not just about selling a lock; it's about selling a system that learns and anticipates. Organizations implementing AI-powered solutions report a reduction in unplanned downtimes by 30%, which translates to significant cost savings for end-users.

Key AI applications for Allegion include:

• Leveraging predictive analytics to optimize security system performance.
• Automating access control systems for real-time threat detection.
• Enhancing surveillance systems with smarter monitoring capabilities.

The ability to offer predictive maintenance on high-value electronic door hardware-forecasting a component failure before it happens-is a powerful competitive advantage and a clear path to higher-margin service revenue.

Allegion plc (ALLE) - PESTLE Analysis: Legal factors

Evolving Global Data Privacy Regulations Affecting Connected Security Devices

You are operating in a world where a smart lock is also a data collector, and that shift means your legal exposure has changed radically. Allegion plc's increasing focus on electronic and connected security solutions, including the acquisition of firms like Gatewise and Elatec in 2025, means compliance with global data privacy laws like the General Data Protection Regulation (GDPR) in Europe and the California Privacy Rights Act (CPRA) is now a core operational risk. Allegion's Chief Privacy Officer, who chairs the Security Industry Association (SIA) Data Privacy Board, is defintely working overtime on this.

The core challenge is translating high-level legal mandates into hardware and software design. For instance, the updated CPRA regulations, finalized in September 2025 and taking effect January 1, 2026, require new transparency obligations for businesses collecting personal information via connected devices. This means your Schlage or SimonsVoss smart lock interfaces must now provide clear, accessible notices and opt-out mechanisms for data sharing. Failure to comply can be costly; a single CCPA enforcement action in 2024 resulted in a $1.35 million fine for a competitor's vendor contract failures.

Increased Regulatory Scrutiny on Cybersecurity Standards for Connected Products

The regulatory environment is quickly moving from 'suggested best practices' to 'mandatory minimum standards' for connected products, especially since Allegion's electronic security products and solutions revenue is expected to continue growing in 2025. The legal risk here isn't just data breaches; it's product liability for insecure devices. The European Union's Cyber Resilience Act (CRA), which applies to manufacturers of products with digital elements, and the Network and Information Security 2 (NIS2) Directive are forcing compliance work streams well into 2025.

In the US, the CPRA is building a framework for mandatory security audits. While the full Cybersecurity Audit and Risk Assessment requirements don't fully phase in until 2027, businesses must begin conducting and maintaining risk assessment reports for high-risk processing activities starting on January 1, 2026. This directly impacts Allegion's recent tech-focused acquisitions, which totaled approximately $470 million in 2025, including the $390 million acquisition of Elatec. You need to ensure the security architecture of these new platforms is auditable and compliant now to avoid future remediation costs. That's a huge integration lift.

Regulation	Jurisdiction	Key Obligation for 2025/2026	Impact on Allegion plc
California Privacy Rights Act (CPRA)	California, US	New transparency/opt-out rules for connected devices (Effective: Jan 1, 2026). Risk Assessments for high-risk processing (Start: Jan 1, 2026).	Requires redesign of user interfaces (UI) and privacy notices in Schlage and Zentra smart access products.
EU Data Act	European Union	Implementation work on data access mechanisms for users and third parties (Phasing in: Sept 2025 - Sept 2026).	Mandates technical changes to connected product data streams to allow user access and portability.
EU Cyber Resilience Act (CRA)	European Union	Compliance efforts for new cybersecurity standards for all digital products (Anticipated focus: 2025).	Increases product liability risk and requires new security testing/documentation for all IoT devices.

Stringent Building Codes and Fire Safety Standards Requiring Specific Certifications

The legal landscape for mechanical and electronic hardware remains heavily fragmented and prescriptive, driven by local building codes and fire safety standards. This fragmentation is a key reason the security products market is so competitive. Allegion's core products-fire doors, exit devices (Von Duprin, LCN), and access control systems-must maintain a complex web of certifications to be sold globally. Stricter standards are a constant, non-negotiable cost of doing business.

In 2025, two major shifts are driving compliance costs:

• UK/EU Standardization: The UK is finalizing its transition from the national BS 476 fire resistance classification to the European standard BS EN 13501. All materials must now be tested under this European standard, simplifying compliance but requiring re-certification for legacy products.
• US Life Safety: Updated US fire safety codes for 2025 mandate stricter requirements for interconnected smoke alarms in residential properties and enhanced regulations for sprinkler installation, especially in older buildings. Allegion's fire-rated hardware must integrate seamlessly with these enhanced, interconnected life safety systems.

These changes mean a continuous R&D investment to maintain compliance, not just innovation. This is why the LCN Senior Swing automatic door operators, for example, were announced in November 2025 with a patent-pending self-adjusting technology, AdaptivIQ, which likely helps meet stringent and variable installation requirements.

Intellectual Property (IP) Protection Challenges in Fast-Moving Technology Markets

Allegion's business success is tied to its strong portfolio of brands like Schlage, CISA, and SimonsVoss, which it considers among its most valuable assets. In a rapidly digitizing industry, IP risk is escalating. The 2025 industry outlook shows that 26% of companies expect their intellectual property dispute exposure to grow this year.

The primary drivers of this increased litigation risk are patents and trade secrets, with 55% of companies expecting higher exposure citing the increased use of Artificial Intelligence (AI) technology as a factor. Allegion's $20 million investment in Ambient.ai, an AI-powered computer vision intelligence company, puts it squarely in the middle of this IP battleground. The company explicitly warns that adverse IP litigation could be extremely disruptive, potentially blocking the trade of products and having a material adverse effect on the business. Protecting the proprietary technology in new electronic products, like the patent-pending AdaptivIQ system, is a critical legal action item. You must be ready to defend your IP aggressively.

Allegion plc (ALLE) - PESTLE Analysis: Environmental factors

You're seeing the global construction market pivot hard toward green building standards, and Allegion plc's future growth is now inextricably linked to its environmental footprint. The pressure isn't just regulatory; it's coming from major commercial customers who need our products to hit their own sustainability targets. We've got clear targets, but the execution needs to be flawless to capitalize on this shift.

The core action for you is simple: Finance: draft a sensitivity analysis on the $3.9$ billion revenue target against a 100-basis-point interest rate hike by Friday.

Growing pressure to reduce embodied carbon in building materials and hardware.

The biggest near-term risk and opportunity is the push to reduce embodied carbon-the greenhouse gas (GHG) emissions from manufacturing, transporting, and installing a product. Architects and engineers are now demanding full transparency on the materials and processes that go into our door hardware and access solutions. Allegion addresses this by providing Environmental Product Declarations (EPDs), which are third-party verified reports detailing a product's lifecycle environmental impact, including raw material acquisition and energy use.

This focus on material content means we have to design for disassembly and recycling. For example, our brands like Schlage and Von Duprin are providing documentation on recycled content to help projects earn Materials & Resources credits under the LEED rating system. This is a massive competitive advantage over smaller players who can't afford the rigorous certification process.

Demand for products contributing to LEED and other green building certifications.

The Leadership in Energy and Environmental Design (LEED) rating system remains the gold standard in the U.S., and demand for products that contribute points is growing. Allegion has proactively aligned its product portfolio to support this, specifically for the more stringent LEED v4 standard. We are also supporting other frameworks like the Living Building Challenge by providing Declare Labels for certain products.

This is where the rubber meets the road. If our products don't have the right documentation, we lose the specification. We use two key transparency documents to meet this demand:

• Environmental Product Declarations (EPDs): Quantify the environmental impact across the product's life cycle.
• Health Product Declarations (HPDs): Disclose product content and associated health information, addressing LEED v4's focus on limiting 'chemicals of concern'.

This documentation is defintely a prerequisite for major commercial contracts today. It's a cost of entry, not a differentiator anymore.

Increased focus on supply chain transparency regarding environmental impact.

The supply chain is where most of our environmental risk lies, particularly Scope 3 emissions (value chain emissions) which are not yet fully quantified in our public targets. Allegion's strategy is to collaborate with our suppliers to source responsibly and ensure they meet or exceed our environmental standards. This is critical for managing raw material sourcing, especially for metals used in our hardware.

We need to keep pushing on our materials traceability goal, which ensures we design products with full awareness of their environmental impact. Transparency isn't just about EPDs for the customer; it's about internal risk management, especially concerning conflict minerals and other high-risk materials.

Corporate commitment to reducing Scope 1 and 2 greenhouse gas emissions.

Allegion has set ambitious, public targets for its operational emissions (Scope 1 and 2), which is smart and necessary. As of December 31, 2024, we had already reduced our greenhouse gas (GHG) emissions intensity (Scope 1 and 2) by 34% compared to the 2020 baseline. This puts us well on track to hit the 2030 goal.

The 2030 goal is now a 40% reduction in GHG emissions intensity for Scope 1 and Scope 2. This target was actually increased in 2024 from an initial 25% goal, which shows a strong commitment from the executive team. The transition to carbon-free electricity is a key driver here, with 28% of our global electricity coming from carbon-free sources as of 2024. Our ultimate goal is to achieve carbon-neutral emissions globally by 2050.

Here's the quick math on our operational progress and goals:

Environmental Metric	2020 Baseline (Actuals)	2024 Performance (Actuals)	2030 Target
GHG Emissions Scope 1 & 2 (Metric Tons CO2e)	74,963	57,513	40% Reduction in Intensity
GHG Emissions Intensity Reduction (vs. 2020)	0%	34% Reduction	40% Reduction
Carbon-Free Electricity Usage	4% (2020)	28% (2024)	100%
Water Usage Intensity Reduction (vs. 2020)	0%	18% Reduction	20% Reduction