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.
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