Have you ever wondered about the financial impact LGBT+ inclusion could have on your company?
Well, wonder no more. This week, Open For Business – a coalition of global companies promoting LGBT+ inclusive societies – published the first-ever quantitative analysis of the financial impact of LGBT+ inclusion on emerging-market companies.
The groundbreaking new report, “New Global Champions: Why fast growing companies from emerging markets are embracing LGBT+ inclusion”, highlights the direct relationship between an emerging-market company’s support for LGBT+ inclusion and its ability to more effectively connect with global markets and supply chains.
The findings from this report have far-reaching implications for emerging-market companies looking to expand internationally. LGBT+ inclusion is increasingly becoming a key growth catalyst to achieve global ambitions with fears of reputational and revenue damage from support of LGBT+ inclusion (which are common in markets where LGBT+ rights are challenged) proving to be unfounded. Open For Business carried out the analysis with Boston Consulting Group (BCG) – together analysing the impact of LGBT+ inclusion on the financial performance of 96 of the fastest growing companies headquartered in emerging markets.
The key findings were:
- Companies that explicitly prohibited discrimination based on sexual orientation and/or gender identity (referred to as “Tier 1”) saw a much higher proportion of revenue coming from international sources than companies that did not have non-discrimination policies
- Tier 1 companies did not suffer any negative impacts on their revenue growth or earnings before interest and taxes margins, even though they publicly supported LGBT+ inclusion in countries where the human rights of LGBT+ people are challenged
“This new research highlights the business imperative of LGBT+ inclusivity for companies looking to succeed on a global scale,” said Elliot Vaughn, managing director and partner at Boston Consulting Group. “We hope this new data will encourage more companies to start thinking about incorporating LGBT+ inclusion into their core strategy. They can play a key role in advocating for greater LGBT+ inclusion in countries where it might be challenging for the LGBT+ community, whilst also harnessing the business benefits that come with it.”
Jon Miller, founder of Open For Business said: “Most crucially, this report focuses on the regions of the world where support is currently most needed – the global south. Many of these companies are being progressive on LGBT+ issues despite being based in countries where LGBT+ rights are challenged – and that’s real leadership. We think of these companies as the new global champions for LGBT+ inclusion. This report shows why LGBT+ inclusion is rising to the top of their agendas. It sends a clear message that companies are not realizing their full potential if they procrastinate on LGBT+ inclusion.”
The analysis yielded six dimensions in which LGBT+ inclusion is linked to business performance:
- Financial performance: High-potential emerging-market companies which openly support LGBT+ inclusion suffer no negative impact on revenue growth or earnings before interest and taxes.
- Global markets and supply chains: LGBT+ inclusion allows the high-potential emerging-market companies to more effectively tap into global markets and supply chains.
- Talent acquisition and retention: High-potential emerging-market companies which openly support LGBT+ inclusion are better able to attract and retain talent.
- Brand strength and customer orientation: High-potential emerging-market companies which openly support LGBT+ inclusion see stronger brands and better customer orientation.
- Corporate governance: LGBT+ inclusive policies can be taken as an indicator of stronger corporate governance.
- LGBT+ inclusive cities: LGBT+ inclusive cities can provide a supportive environment to help boost the competitiveness of high-potential emerging-market companies.