Diversity and inclusion is area of increasing interest for investors, and one of the key themes of engagement for 2021 at Ethical Partners.
The recent World Down Syndrome Day in March, and some conversations with interested clients have provided us with a significant moment for us to reiterate our strategic focus on diversity and inclusion, specifically disability inclusion for corporate Australia.
Globally, 15% of the population are persons with disabilities and there are approximately 1 in 1,000 people born with Down syndrome every year. The labor force participation rate globally for people with disabilities sits at 32.8% compared to 77.1% for those without disabilities.
We believe it is imperative that investors use their shareholder voice to raise the awareness of this important diversity issue and help companies to improve their inclusion.
Addressing disability inclusion is also imperative to a company addressing the SDG’s – in fact 7 targets of the Sustainable Development Goals explicitly refer to persons with disabilities. In particular, Goal 8, to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all, the international community aims to achieve full and productive employment and decent work for all, including those with disabilities. This additionally relates to Goal 4 on inclusive and equitable quality education and promotion of life-long learning opportunities for all, including persons with disabilities.
At Ethical Partners, our EPORA process includes assessing how companies address Diversity and Inclusion, including Disability Inclusion, both within their own workforce and operations, and also within their areas of corporate impact. We also have a deep commitment to, and active program of, engaging with portfolio companies on Diversity and Inclusion, and as such we are a signatory to the Joint Investor Statement on Corporate Disability Inclusion.
Through an in-depth analysis of our portfolio, we found that only 32% of companies have a specific policy or procedure articulating their disability inclusion work. This highlighted the need for further focus on our engagements in this area. There are however a number of our portfolio companies that have made great strides in the space of disability inclusion.
Firstly, Mirvac have implemented a National Disability Day and the Valuable 500 Program. Both of these have helped to build an understanding of those living with a disability and putting disability inclusion on their internal leadership agenda. For example, National Disability Day is an immersive experience where leaders spend a day in a wheelchair. Last year, the feedback from leaders highlighted the need to adjust the opening mechanism on the doors to bathrooms throughout the office.
Medibank is also one of Australia’s top performing companies in terms of their disability access and inclusion. In 2019, Medibank developed their first Accessibility & Inclusion Plan to help create a more inclusive culture. Similar to Mirvac, leaders took part in an immersive experience to highlight the opportunities for improving access across the business. This resulted in commitments to improving accessibility in stores and offices as well as helping the contact centre team to better assist customers with communication challenges. They have articulated a range of targets and strategies to improve on their accessibility and inclusion for customers as well as for staff with disabilities.
Lastly, Commonwealth Bank have a comprehensive 2021-2023 Accessibility and Inclusion Plan as well as strong progress on their 2017-2020 plan. These plans have in-depth targets and plans Commonwealth Bank aim to achieve over the next couple of years including the communication and accessibility for customers and looking at the recruitment process and workplace adjustment process for employees with a disability. Some of the projects that Commonwealth Bank have implemented over the past couple of years includes:
• An app that aims to enhance the financial wellbeing of participants and service providers in the NDIS by using block chain-based smart money system.
• For all new digital products, usability testing will be conducted including people from a range of disability groups.
• Design for Dignity worked with the Australian Network for Disability to guide organisations on how to best design retail branches that people with a disability can access in a safe and dignified way. New branches have been designed with simplified signage; switching to matte surfaces as it can difficult to read signs on shiny surfaces; adding braille signage; incorporating hearing loops; and adding height-adjustable desks.
And not only is disability inclusion and diversity a crucial ESG issue, it is evident that diversity and inclusion is important for the businesses themselves. For example, 67% of job seekers consider workplace diversity an important factor when considering employment opportunities and more than 50% of current employees want their workplace to do more to increase diversity.
Diverse teams are also better positioned to unlock innovation that drive market growth. According to a Harvard Business Review study, companies with higher-than-average diversity had 19% higher innovation revenues. An Accenture report has found that companies that offered inclusive working environments for employees with disabilities achieved an average 28% higher revenue, 30% greater economic profit margins and two times net income of industry peers.
Companies first and foremost need to look at disclosure and encourage diversity. The next phase to capitalise on the benefits of a diverse workforce is to encourage inclusivity with equitable employment practices, integrate differences and enable inclusive decision making.
We know that the shareholder voice is a powerful influence, and thus we feel it is our responsibility to advocate on this issue.
As such, Ethical Partners have written to 25 our portfolio companies about this issue, and will be engaging with them to more aggressively look at their disability diversity policies and practices within their operations such as:
• The introduction or updating of flexible work practices with a specific focus on employees with disabilities.
• Keep harassment and discrimination policies updated and ensure there are viable complaint and formal investigation processes in place.
• Strengthen leadership accountability and capabilities for disability diversity and inclusion.
• Enable equality of opportunity through fairness and transparency.
We look forward to keeping you updated on the progress of these engagements and how companies are increasingly moving the needle on disability diversity and inclusion across the ASX200.
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