The United Nations Corporate Standards on LGBTQ+ rights (http://unfe.org/standards), I launched in 2017 with the Institute for Human Rights and Business (IHRB), spell out the specific actions companies can take to support the progression of LGBTQ+ freedoms and inclusion globally. LGBTQ+ impact investments are listed among these actions. These are investments made with the intention to generate positive, measurable social impact when it comes to LGBTQ+ issues alongside a financial return.
There evidence that companies with more diverse representation in senior management will likely achieve greater profits such as this 2015 report from McKinsey & Company or another, a year later, from the Peterson Institute for International Economics. Another report from McKinsey, titled “Delivering Through Diversity,” shows that gender diversity in management positions actually increases profitability more than previously thought.
“An opportunity to investors to beat the market while contributing to a new era of LGBTQ+ social impact investing”
Beyond Senior Management, there are other studies that find that hiring a demographically diverse workforce can improve a company’s financial performance.
- Gender-diverse business units in the retail company have a 14% higher average comparable revenue than less-diverse business units (5.24% vs. 4.58%). Gallup
- Gender-diverse business units in the hospitality company show a 19% higher average quarterly net profit ($16,296 vs. $13,702) than less-diverse business units. Gallup
- Companies in the top quartile for gender diversity were 15 percent more likely to have financial returns that were above their national industry median. McKinsey & Company
- Companies in the top quartile for racial/ethnic diversity were 35 percent more likely to have financial returns above their national industry median. McKinsey & Company
- Great Place to Work’s ranking of the 100 Best Workplaces for Diversity in 2019 reveals that companies committed to diverse and inclusive work environments perform well even during recessions. The survey found that while S&P 500 companies experienced a 35.5% decline in stock performance, inclusive and diverse companies posted 14.4% gains. (Great Place to Work)
Regarding corporate Boards this study by McKinsey found that diverse boards perform better,delivering returns on equity that were 53% higher than their non-diverse counterparts. Similarly, this study by Credit Suisse found that large businesses with women on the board outperformed male-only boards. The diverse boards had higher ROEs, lower debt to equity ratios and a higher average net income growth.
Outperform is the LGBTQ+-themed investment product of choice when it comes to impact investing. Its advisory board includes some of the most knowledgeable professionals on diverse workforces and progressive policies. It offers an opportunity to investors to beat the market while contributing to a new era of LGBTQ+ social impact investing.