A new “landmark” report from Allied Universal has found that large, global companies lost a combined $1 trillion in revenue in 2022 due to physical security incidents.

The report was compiled from an independent, anonymous survey of 1,775 Chief Security Officers (CSOs), or those in equivalent roles, from companies in 30 countries and with a combined annual revenue of more than $20 trillion in 2022.

The future for physical security

The report also found that companies anticipate a surge in threats and hazards like social unrest, climate change, fraud and theft.

As a result, physical security budgets are predicted to increase significantly to keep people, property and assets safe.

Security leaders intend to focus investments on advanced technology and providing security professionals with additional skills and training. 

The report says that fraud is also likely to be the biggest external threat over the coming year and the leaking of sensitive information is predicted to be the biggest internal threat.

Dangers posed by hackers, protestors, spies and economic criminals are expected to soar.    

Other key findings

According to the new report, one in four (25%) companies reported a drop in their corporate value following an external or internal security incident during the last 12 months.

In addition to CSOs, the report also surveyed 200 global institutional investors to understand the impact of security incidents on the value of publicly traded companies.

Investors estimated an average 29% drop in stock price in the wake of a significant internal or external security incident in the last 12 months.

Additionally, economic unrest was reported by 47% of survey respondents as the greatest security-impacting hazard in the next 12 months – up from 39% in the previous year.

Climate change events are on the rise and the second most concerning hazard for physical security, with 38% saying they may be impacted in the next year.

This was followed by social unrest (35%), disruption to energy supplies (33%) and war or political instability (32%).

Furthermore, 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 with 35% of companies having experienced this already over the last 12 months.

Fraud and phishing and social engineering were found to be the most common external security incidents experienced in the last 12 months (23%).

Security budgets

The report also found that security budgets represented approximately $660 billion (3.3%) of global revenue at respondent companies in 2022.

Meanwhile, physical security budgets at 46% of respondent companies are set to significantly increase in the next 12 months.

AI is top of the agenda for future physical security technology investment, with 42% intending to invest in AI and AI-powered surveillance over the next five years.

“As the world’s leading security company, we commissioned this report for the benefit of the entire industry and the companies we protect,” said Steve Jones, Allied Universal’s Global Chairman and CEO.

“It comes at a time when organizations across the globe are increasingly navigating more complex security hazards and threats.

“The research shows the impact of security threats on organizations is multidimensional​ – from the disruption of productivity to the loss of customers, to the potentially staggering financial impact.”