The first-ever World Security Report has revealed that large, global companies suffered a combined loss of $1 trillion in revenue in 2022 due to physical security incidents. The report highlights an alarming increase in economic unrest as the greatest security-impacting hazard in the next 12 months, compared to the previous year.
In addition, the report predicts a surge in threats and hazards such as social unrest, climate change, fraud, and theft. To address these concerns, companies are expected to significantly increase their physical security budgets to ensure the safety of people, property, and assets. Security leaders plan to focus their investments on advanced technology and provide security professionals with additional skills and training.
The report identifies fraud as the biggest external threat in the coming year, with the leaking of sensitive information being the largest internal threat. The dangers posed by hackers, protestors, spies, and economic criminals are expected to skyrocket.
Commissioned by Allied Universal, the world’s leading security and facility services provider, and its international business, G4S, the World Security Report collected insights from 1,775 chief security officers (CSOs) or those in equivalent positions from 30 countries. These CSOs work for large, global companies with a combined annual revenue of over $20 trillion, which represents a quarter of the world’s gross domestic product. The survey participation was independent and anonymous.
Steve Jones, the global chairman and CEO of Allied Universal, emphasized the importance of the report and its relevance during times when organizations are navigating complex security hazards and threats. He highlighted the multidimensional impact of security threats, ranging from productivity disruption to loss of customers and potentially staggering financial consequences.
The report highlights that one in four companies reported a decline in their corporate value following an external or internal security incident in the past year. Furthermore, the impact of security incidents on the value of publicly traded companies was assessed by surveying 200 global institutional investors. On average, these investors estimated a 29% drop in stock price in the aftermath of significant security incidents.
Ashley Almanza, the executive chairman of G4S, emphasized the challenges faced by global businesses, including increased security threats, a tight labor market, and rapidly changing technology that introduces new risks and necessitates different skills. The World Security Report aims to help the industry and the wider business community better understand and operate in the fast-moving security landscape.
Key findings from the report include the increasing concerns about economic unrest as the greatest security-impacting hazard in the coming year. This sentiment rose from 39% in the previous year to 47% in the current report. Climate change events were identified as the second most concerning hazard, with 38% of respondents fearing their impact within the next year. Social unrest, disruption to energy supplies, and war or political instability were also prominent concerns.
The leaking of sensitive information is expected to be the biggest internal threat in the next 12 months, according to 36% of respondents. Misuse of company resources or data was the most common internal incident reported, with 35% of companies having experienced it in the past year. Fraud, on the other hand, was predicted to be the biggest external threat, anticipated by 25% of CSOs. The most common external security incidents experienced in the last year were fraud, phishing, and social engineering.
The report indicates that security budgets accounted for approximately $660 billion (3.3% of global revenue) at respondent companies in 2022. Moreover, 46% of the surveyed companies plan to significantly increase their physical security budgets in the next 12 months. Artificial intelligence (AI) tops the agenda for future physical security technology investments, with 42% of companies intending to invest in AI and AI-powered surveillance over the next five years.
The report also sheds light on the future of security, revealing that cyber threats targeting physical security systems pose challenges to operations according to nine out of ten respondents. The survey highlights a disconnect between physical security incidents and the importance placed on them at the board level. Company leaders are shown to be more concerned about cyber threats than physical security. Additionally, recruitment of security professionals is expected to be challenging in the next five years, with 84% of respondents expressing this concern. Respondents also emphasized that people skills are more important than physical attributes of strength in front-line security professionals.
Overall, the 2023 World Security Report provides valuable insights into the security landscape faced by global companies. With economic unrest and various external and internal threats on the rise, it is crucial for organizations to strengthen their physical security measures and invest in advanced technology and employee training. By prioritizing comprehensive security strategies, companies can safeguard their operations, protect their assets, and mitigate potential financial losses.