Thu, January 25, 2018
Considering LGBT issues in investment decision-making is still a relatively new concept, but it is becoming increasingly important, both to support the progress in equal rights and to minimize investment risks arising from discrimination litigation cases.
A study by Denver Investments identified “a long-term trend toward outperformance of companies relative to their respective sector peers after adopting LGBT-inclusive workplace policies.”
In response, more and more businesses have begun to pay attention to LGBT issues. Many companies are making sure that their workplaces are LGBT-friendly in order to attract and retain the best talent. Inclusive work environments are now often seen as a competitive edge that leads to higher job satisfaction and greater commitment from LGBT employees.
But it is also about consumers. The global spending power of LGBT consumers was estimated at $3.7 trillion in 2015, according to the most recent data by LGBT Capital, an investment management and advisory group. LGBT household wealth is estimated at $15 trillion globally, and more than $5 trillion in the U.S. alone. China is estimated to have an LGBT population of more than 80 million. Workplace discrimination toward LGBT people could therefore result in a reputation crisis for the company, potentially translating into significant loss for the business.
The decisions investors make influence business practices. And some investors are pushing forward to identify and leverage investment opportunities in LGBT issues, seeking both positive impact and financial return.
In 2016, Trillium Asset Management released a white paper that outlined an emerging framework to enable impact investors to integrate LGBT issues into investment considerations across a spectrum of asset classes. Furthermore, indices such as Denver Investments’ Workplace Equality Index and the Human Rights Campaign’s Corporate Equality Index identify companies based on indicators that point to supportive and fair workplace policies.
However, the investment sector in the UK has been slow to take up the mantle both in terms of creating specific products for LGBT communities but also in recruiting new LGBT talent and developing policies that are LGBT friendly.
LGBT Great want to change that. We are collating personal stories from LGBT people already in the sector to provide role models and encourage new talent in but we know what a challenge that will be if the sector is willing to go for the ‘pink pound’ but not create an LGBT inclusive culture internally.