Disability Inclusion in Corporate Supplier Diversity Initiatives

Purpose

Since the 1960s, federal and state governments and private-sector companies have used supplier diversity initiatives to ensure their supply chains include businesses owned by traditionally economically disadvantaged or underrepresented groups. Originally concentrated on racial and ethnic minority groups, programs have expanded to include businesses owned by women, veterans, LGBTQ+ individuals, and, in some cases, people with disabilities. This study investigates the extent to which disability is included in supplier diversity initiatives of Fortune 500 companies.

Methods

This paper uses a novel data set created by the authors with information on supplier diversity initiatives and Disability, Equity, and Inclusion (DEI) statements in Fortune 500 companies extracted from public sources. This information is combined with data from Compustat, a corporate financial database published by Standard and Poor’s and additional variables from other sources.

Results

75% of the Fortune 500 companies have supplier diversity programs that express a commitment to diversity yet only 49% of those with such programs include disability-owned businesses (38% of all Fortune 500 companies). Among the largest 100 companies, 89% had supplier diversity programs that included disability, almost 6 times the rate Ball et al. reported in 2005. This study finds disability inclusion varies significantly by company size, industry, and whether the company is a government contractor.

Conclusion

Despite the growth in disability inclusion, the absence of disability as a diversity category in regulations mandating supplier diversity initiatives for government contractors impacts disability inclusion. If we want to align our supplier diversity programs with the Americans with Disabilities Act, the first step is to address the issue in the Small Business Administration and federal contracting requirements.