A growing body of research has in recent years shown that companies promoting gender and racial diversity tend to , but fresh analysis out of Finland now provides evidence that the same is true of companies championing LGBT-friendly policies.
A growing body of research has in recent years shown that companies promoting gender and racial diversity tend to , but fresh analysis out of Finland now provides evidence that the same is true of companies championing LGBT-friendly policies.
Academics at two universities in the Nordic country assessed the financial performance of 657 publicly-traded U.S. companies between 2003 and 2016, and found that firms with LGBT-friendly policies tend to enjoy both higher profitability and higher stock market valuations.
For the purposes of the survey, LGBT friendliness was determined based on the constructed by the Human Rights Campaign, the largest LGBT civil rights advocacy organization in the U.S. HRC has published the index for large U.S. firms annually since 2002.
In recent years, some of the U.S.’s best-known and largest companies, including Apple, Coca-Cola, Goldman Sachs, Google, Hewlett-Packard and Walt Disney, have all publicly pledged their support for sexual minorities, earnings them top ratings in HRC’s Corporate Equality Index. But corporate social advocacy can, as the researchers acknowledge in presenting their results, be “tricky business”.
“While taking a public stand on potentially sensitive social or political issues may lead to positive outcomes and competitive advantages, the repercussions of social advocacy can also be detrimental if the stance taken is not aligned with the preferences and values of the firm’s key stakeholders,” they write.
