London — In a groundbreaking report published on Thursday, it has been revealed that LGBTQIA+ corporate inclusion is not just a social responsibility but a potential catalyst for higher profitability. “The Investor Guide to LGBTQIA+ Inclusion” suggests that transparency about LGBTQIA+ inclusion and staffing correlates with better financial performance, with top-scoring companies being 2.3 times more profitable than their counterparts in the bottom 25.
The report, conducted by Open for Business, a global coalition advocating for inclusive and diverse societies as beneficial for business and economic growth, analyzed the ESG (environmental, social, and governance) strategies and reporting of the 290 largest listed companies in the United States, Britain, Germany, and Australia.
Dominic Arnall, Chief Executive of Open For Business, emphasized the findings as a “clear link between LGBTQ+ inclusion and higher returns for investors.” The report’s focus on LGBTQIA+ reporting and inclusion provides valuable insights into the tangible impact of fostering diverse and inclusive workplaces.
Despite the positive correlations revealed in the report, LGBTQIA+-friendly companies have faced challenges, particularly in some markets and amid advertising campaigns. Notably, Budweiser faced criticism for a Bud Light ad campaign featuring transgender woman Dylan Mulvaney, and U.S. retailer Target experienced backlash over Pride-themed merchandise, leading to a 5.4% drop in three-month sales.
However, Ken Janssens, former Chief Data Officer at JP Morgan and one of the report’s authors, highlighted research suggesting that LGBTQIA+-friendly marketing could yield positive results. He cited a 2023 survey by Bospar and Propeller Insights, indicating that 59% of consumers are more likely to buy from brands launching campaigns focused on diverse communities, including the LGBT community.
Janssens, now Head of Social Impact at Windō, pointed out that the report focused on LGBTQIA+ reporting and inclusion rather than marketing trends. He also emphasized that the covered period did not include events from 2023
Investor demand for LGBTQIA+ funds remains high, particularly among younger investors. “Sixty-seven percent of Gen Z investors want investment products and strategies that advance LGBT inclusion,” noted Janssens, referencing a recent Morgan Stanley report.
The Open for Business report challenges the perception that ESG is politically motivated. It contends that many ESG issues directly impact the bottom line, making corporate LGBTQ+ inclusion not just symbolic with Pride flags and rainbow logos but integral to running a successful business.
This report underscores the business case for LGBTQIA+ inclusion, demonstrating that fostering diverse and inclusive workplaces is not only morally right but also commercially imperative for companies striving for sustained success and profitability.
