Holistic social responsibility includes embracing people with disabilities and disabled-owned businesses in supply chains. Including the appropriate metrics in ESG reporting will meet investor, customer, and marketplace expectations.-BY JEREMIAH PRINCE

Environmental, social, and governance (ESG) reporting addresses various areas of interest to investors and also serves as a check on corporate decision-making. It is a powerful tool that highlights successes and progress toward goals, but it is also an opportunity to identify areas for increasing business value through diversity, equity, and inclusion (DEI). The “S” in ESG is focused on social responsibility, yet reporting often lacks one major element of DEI: disability. Called the “new frontier” in ESG, disability inclusion is crucial to completing the “S” in ESG reporting for many reasons. Disability diversity is not only socially responsible, but also a corporate value driver. Studies by the World Bank, Center for Talent Innovation, and World Economic Forum have demonstrated that including both people with disabilities in the workforce and also businesses owned by people with disabilities in the supply chain increases innovation, revenues, profit margins, and shareholder returns. An increasing number of investors are taking disability inclusion into their ESG assessments of companies for both reasons: higher inclusion rates for people with disabilities for social responsibility reasons, and improved corporate financial performance.

Making a Difference

Despite the barrage of statistics showing that people with disabilities are still largely excluded from the workforce, and that their inclusion drives business value, progress is slow. Just one statistic tells the story. The U.S. Bureau of Labor Statistics reported that 21.3% of persons with a disability were employed in 2022 compared to 65.4% of people without a disability. Hiring people with disabilities is an important aspect of social responsibility. However, investors also know through research that companies hiring people with disabilities have an average of 28% higher revenues, twice the net income, and a 30% better profit margin.

Hiring people with disabilities is also a strategy for managing the labor shortage. Andrew Pulrang, a freelance writer with lifelong disabilities and 22 years of experience as a service provider and executive in a nonprofit disability services and advocacy organization, addressed the disabled persons' labor market. He shared that though there are periods during which there is an uptick in the hiring of disabled people, it often ticks down, too, indicating that employment changes are due more to economic conditions than to initiatives. It is true, he says, that some fluctuating disabilities like diabetes and Crohn’s Disease can be more complex for employers to adapt to, compared to “fixed” disabilities like blindness, paraplegia or deafness. “So one thing many disabled people need in order to be able to work sustainably is flexible jobs that can more easily accommodate fluctuating disabilities and medical conditions. This can include work from home opportunities, varied work schedules, more generous, creative time off provisions, and a wider variety of seasonal and part-time jobs,” says Pulrang. Workplace accessibility and bias in job screening and hiring continue to prevent hiring fully qualified persons.

Investors are looking at the total picture of companies, and so are customers and the marketplace in general. They want to see a full expression of social responsibility, leaving no room to continue discriminating based on disability. The reasons for not hiring people with disabilities are disappearing due to awareness and technology.

Reasons to Include Disability in ESG Reporting

Including disability in ESG reporting is crucial for several reasons. Firstly, it is a matter of social justice and equality. People with disabilities face various societal barriers, including discriminatory attitudes and lack of access to education, employment, healthcare, and other essential services. By including disability in ESG reporting, companies can demonstrate their commitment to social responsibility and inclusion, and also highlight their efforts to remove these barriers.

Secondly, disability inclusion is also good for business. People with disabilities represent a significant and growing market segment which is often overlooked by companies. By including disability in ESG reporting, companies can show their potential investors and customers that they are both aware of this market opportunity and taking steps to capitalize on it. Finally, including disability in ESG reporting can also help companies identify and address internal barriers to disability inclusion. By tracking and reporting disability-related metrics, companies can monitor their progress toward becoming more accessible and inclusive workplaces. This can help them attract and retain talented employees with disabilities and improve their overall business performance.

Disability reporting in ESG includes reporting on workforce diversity, equity, and inclusion and supply chain diversity.

ESG Reporting of Disability Inclusion Remains a Work in Progress

Valuable 500 is a global business partnership of 500 organizations working to end the exclusion of people with disabilities. Standardized reporting of disability inclusion Key Performance Indicators promotes better oversight and comparison of company performance among peers. In fact, Valuable 500 believes that standardization of publicly disclosed data is essential for investor and stakeholder decision-making. The recommendation in the Valuable 500 white paper ESG and Disability Data is to adopt and disclose 5 KPIs. They are workforce representation, training on disability inclusion, goals specific to disability inclusion and how leaders are held accountable for meeting goals, disability-specific Employee Resource Group with executive sponsorship, and digital accessibility. “The exclusion of disability and related topics such as accessibility from investor-grade environmental, social and governance (ESG)9 data has far-reaching implications across the landscape of global business because of the sheer size and scale of the population with disabilities,” said the report authors.

Investors, customers, and the marketplace are taking a more holistic view of companies, meaning financial and non-financial metrics are important. Disability reporting also includes the supply chain. Recommendations for updating the 2016 GRI Universal Standards for disability reporting were made in 2021, and these are now enhanced universal standards for procurement practices and supplier social assessment through the disability lens, among many other standards.

For example, the GRI 204: Procurement Practices 2016 recommended update says, “Report the percentage of procurement budget used for significant locations of operation that is spent on local suppliers that are owned by or staffed with persons with disabilities.” GRI 414: Supplier Social Assessment 2016 has two sections. One update says to report on new suppliers and include “whether the social criteria include the promotion of and respect for the rights of persons with disabilities, for example, in terms of accessibility or employment for persons with disabilities or whether they are committed to disability and inclusion.” Another standard on the negative social impacts in the supply chain now asks companies to “Report whether the actual and potential negative social impacts identified in the supply chain affect the rights of persons with disabilities, for example, in terms of accessibility or employment for persons with disabilities to ensure discrimination in the workplace does not occur and the mechanisms put in place to mitigate these impacts” Disability Hub Europe officially updated the Disability in Sustainability Reporting guide to include the recommendations for adding disability to the GRI Universal Standards. The report shows the new 2021 disclosures by section, the suggestion on including disability, and the previous disclosure standards from 2016.

Achieving Holistic Social Responsibility

Achieving holistic social responsibility is only possible through holistic inclusion. Excluding tens of millions of people from employment and businesses from supply chains does not make sense. The GRI offers one set of standards, but corporations can choose from various options. However, it is time to ensure disability metrics are included for any company serious about diversity, equity, and inclusion. Including an important qualified source of labor and innovative suppliers in ESG planning and reporting brings enormous benefits to any organization.