100% this.
1. Keep secrets in a dedicated secrets store.
2. Read directly from the secrets store in application code. There is no environment, there are no environment variables. Yes, even on local.
It's pretty normal to keep secrets in a dedicated secret store, and then have the service launcher inject them from the secret store into the environment.
It's pretty normal to keep secrets in a dedicated secret store, and then have the service launcher inject them from the secret store into the environment.