The past few years have seen a sharp increase in businesses focusing on LGBT+ inclusion in the workplace. This is most pronounced in the United States, where 93% of Fortune 500 companies have policies prohibiting discrimination based on sexual orientation and 91% prohibit discrimination based on gender identity. But there is an encouraging trend among multinational corporations that are headquartered in emerging markets. A study from Open For Business and BCG found that support for LGBT+ inclusion has doubled among the 100 fastest growing emerging market multinationals, including many Indian corporates.
Rising support for LGBT+ inclusion
There are a number of explanations for this uptick in support for LGBT+ inclusion. For example, the number of laws that criminalize the LGBT+ community has fallen around the world, removing any legal excuses companies may make for not focusing on inclusion.
Additionally, social acceptance of LGBT+ people has increased in 131 countries since 1981.
Perhaps, the most important driver of this trend is the growing body of evidence which shows that LGBT+ inclusive companies outperform their peers. From a purely financial standpoint, research consistently shows that LGBT+ inclusive companies have better share price performance, a stronger return on equity, and higher levels of free cash flow. Companies supportive of LGBT+ inclusion that are headquartered in emerging markets see twice the amount of revenues from international sources than companies that are not inclusive. These companies attribute their ability to better attract and retain talent, to be more innovative, to better orient themselves to diverse consumer segments and their brand strength to their inclusive cultures.
Taking effective action
Many companies understand this business case, and there is a growing number of examples of companies acting in support of LGBT+ rights. While this is encouraging, there is still much more to be done.
Unfortunately, a vast majority of companies hesitate to take a consistent global position on LGBT+ rights. Often this is not out of intentional malice or apathy, but rather a lack of understanding about how to progress in a way that is effective and responsible.
Open For Business has worked with some of the largest companies in the world on advancing LGBT+ rights – from Kenya to Taiwan to Costa Rica – and we have learned three main ingredients for effective action.
- First, there must be a clear directive from the CEO that LGBT+ inclusion is a priority. Ginni Rometty, the CEO of IBM, is a prime example. Last year, she prominently sent a letter to the US Congress on behalf of the Business Roundtable in support of the Equality Act. It should come as no surprise that IBM is one of the most ardent supporters of LGBT+ rights globally. They have supported LGBT+ inclusive policies around the world and have worked to bring clients and peers with them on the journey.
- Second, a data-driven economic case is essential for businesses to speak authoritatively on LGBT+ rights. Supported by our research into the economic benefits of inclusion in Costa Rica, Taiwan and the Czech Republic, companies have felt confident to publicly support marriage equality. We have also seen our economic research start to change the conversation on the decriminalization of same-sex acts in Kenya.
- Lastly, businesses must participate in local networks of their peers and LGBT+ civil society organizations to plan collective action. Companies are building these networks around the world, from Kenya to South Korea, to identify areas of collaboration for advancing LGBT+ inclusion in those societies. These networks ensure that businesses understand the priorities of the LGBT+ community and that activists understand the realities of what companies can and can’t do.
Following this recipe will help companies take authentic action in support of LGBT+ inclusion, both in their workplaces and in the societies in which they operate. These actions do not just benefit businesses; they also help to create a more inclusive world for LGBT+ people to live free and equal lives.