A new study conducted by Disability:IN has found that 72% of European Fortune 500 companies include disability in their sustainability or environmental, social and governance reports. In comparison, 65% of U.S. Fortune 500 companies disclose disability in their ESG reports. These numbers are expected to rise as sustainability reporting becomes mandatory in the EU and other jurisdictions starting in 2025.
ESG investing has seen a rise in popularity, with companies releasing annual ESG reports to meet demands from fund managers and investors. While these reports were initially voluntary and left to the company’s discretion, regulations are now being adopted globally with most going into effect in 2025. Despite being voluntary, Disability:IN found that 99% of European Fortune 500 companies participated in some form of ESG reporting, with 72% including disability in their reports.
In the United States, companies must comply with the Americans with Disabilities Act, which prohibits discrimination on the basis of disability. However, while companies may acknowledge compliance with the ADA, only 30% disclose workforce disability participation rates in their ESG reports. This lack of hard data to back up claims indicates a discrepancy in how companies address disability in their reports.
Materiality plays a significant role in the development of ESG and sustainability reporting standards. The US uses a single materiality standard, while the EU has adopted a double materiality standard, considering the interests of shareholders along with stakeholders impacted by the company’s decisions. This has created a conflict of laws for companies operating in multiple jurisdictions, with different approaches to materiality.
Disability:IN analyzed where disability disclosures fit in the European Sustainability Reporting Standards, which were developed under the Corporate Sustainability Reporting Directive. The ESRS categorizes reports into general, environmental, social, and governance categories. Disability reporting should fall under specific ESRS categories related to workforce policies, engagement processes, social protection, incidents, and complaints.
The development of sustainability reporting standards in the U.S. has been limited to climate-related risks, with ESG reporting being voluntary. According to the study, 65% of U.S. Fortune 500 companies include disability in their ESG reports, with only 10% providing data on disability workforce participation rates. While the accuracy of these numbers is in question due to the low reporting rate, the importance of including disability in ESG reporting is highlighted for companies looking to engage in sustainable business practices.
