Disability Inclusion in Business: A Value-Creating Strategy
By Robert Ludke, Contributing Author/ September 26, 2023
Over his career Bob Ludke has advised policymakers in the U.S. Senate and House of Representatives, taught at the United States International University in Nairobi, Kenya, and provided counsel on sustainability, corporate governance, supply chain management, and environment, social, and governance (ESG) strategies for companies in the retail, oil and gas, transportation, and finance sectors.
He is the author of Transformative Markets, a book about the role of markets in fostering a more sustainable society (published in April 2020 through the Creator Institute of Georgetown University), and the creator of the Voices of Nature podcast in partnership with Global Conservation Corps.
Bob is a Senior Fellow at The Harkin Institute for Public Policy & Citizen Engagement. His work at The Harkin Institute focuses on research and engagement with the disability community, investors, and the private sector to facilitate ESG investment practices being used as a catalyst for achieving competitive, integrated employment of persons with disabilities.
A Value-Creating Strategy
In recent years, I have published a number of papers and articles emphasizing that disability inclusion is a value-creating strategy that must be incorporated into environment, social and governance (ESG) approaches used by investors and corporate leaders alike.
In a 2020 paper I argued that the “S” in ESG is quickly becoming “Ground Zero” for making the connection between human capital and business performance. I stated that ESG “represents an opportunity to permanently change the dynamic around the hiring, training, and retention of people with disabilities and to foster a complete reimagining of how people with disabilities work and advance their careers.”
In a more recent paper published in June 2022, I made the case that an ESG mindset is critical to unlocking the innovative potential of persons with disabilities in every sector of the economy. Companies able to seize upon that opportunity stand to benefit by increased access to the global disability population – an estimated 3.4 billion people with a spending power roughly the size of the European Union’s GDP.
However, the recent criticisms of ESG require reevaluating the merits of connecting disability inclusion to ESG strategies.
ESG is Not Wrong…But It Has Lost Its Way
It is one thing for Elon Musk to call ESG a “scam” or publicity-seeking Republican politicians to jump on the anti-ESG bandwagon to appease voters as sufficiently “anti-woke”. But when Larry Fink of BlackRock claims he is “ashamed” to be part of the ESG debate and no longer will be using the term, support for the concept of ESG is on thin ice.
In its inception ESG is a management approach that integrates environment, social, and governance considerations into short and long-term business and investment strategy. That approach still has a great deal of merit. When done right, ESG helps future proof businesses and investment decisions. Unfortunately, ESG too frequently has strayed from its original intent and morphed into a marketing approach designed to bolster corporate brand and reputational campaigns.
How Disability Inclusion Can Avoid Falling into the ESG Trap
One reason ESG became an easy target for critics is because measuring ESG impacts and outcomes – especially those tied to core business metrics – is extraordinarily difficult. That challenge is especially acute in the “S” aspects of ESG.
It is very difficult to assign a financial figure to human talent. It is even more difficult to draw a straight line from investing in people and fostering an inclusive workforce to definable outcomes such as market share, profits, and product innovation.
Yet, a disability-inclusive approach to innovation has time and again demonstrated its virtues. Consider just a few of the products innovated either by persons with disabilities or for persons with disabilities: the typewriter, cruise control on vehicles, and the voice activation feature on your smartphone.
And don’t forget the widespread adoption of curb cuts on sidewalks in cities and neighborhoods around the world. Every parent pushing a stroller or traveler with a roller bag suitcase has taken advantage of a disability-driven innovation.
Each of these innovations has had a positive benefit to most every person – disabled or not – and created billions of dollars in market value.
Because disability inclusion is a business imperative, we must not let the challenges of complexity stop us from aligning the value of inclusion with the value of companies.
For it to avoid the same fate of ESG we must acknowledge disability inclusion for what it is – a transformative strategy that brings together people with different abilities and lived experiences to innovate and grow market share.
Disability Inclusion is About Value, Not Values
Disability inclusion is not about imposing one’s values on a company or an investment decision. It is about making an organization better and more innovative so that it creates lasting value.
A critical step is for corporate leadership – especially the board of directors – to acknowledge the value disability inclusion brings to the organization. Doing so not only emphasizes the importance of disability initiatives within the organization but it also makes the connection between disability inclusion, strategy, and value creation. Such an acknowledgement demonstrates that disability inclusion is material to the business – something every good shareholder will appreciate.
In comment letters to the U.S. Securities and Exchange Commission I outlined a series of metrics companies can use to measure the value creation of disability inclusion. Each requires an organization-wide commitment, and none will be implemented overnight. However, these concepts serve as a roadmap for how to tie disability inclusion to business outcomes.
No matter how the debate about ESG plays out, the merits of disability inclusion are clear. Disability inclusion is a business strategy that is material to shareholders and stakeholders alike because it allows companies to seize market opportunity and mitigate risk.