Dimensions of diversity beyond gender: LGBTQ+
Dimensions of diversity beyond gender
Diversity, equity and inclusion (DEI) has been a focal point on the investor agenda for many years but the scope of diversity is evolving. Although gender continues to be a central and critical theme for DEI progress, investors can broaden the areas of diversity they can engage on. ‘Gender and Beyond: Diversity, Equity and Inclusion’, published by the First Sentier MUFG Sustainable Investment Institute highlights four broader dimensions of diversity: disability and neurodiversity; LGBTQ+; Ethnicity; and Socioeconomic background. These dimensions have been underexplored but are increasingly attracting stakeholder attention, alongside gender.
Investors have an opportunity to address DEI concerns through engagement and voting among investee companies. To support investors in deepening their understanding in this important area, we provide an overview of disability and neurodiversity in the workplace context, including actionable insights and engagement questions.
LGBTQ+
Sexual orientation and gender identity considerations are increasingly being integrated into DEI policies, alongside the growing implementation of global LGBTQ+ discrimination protection laws in addition to anti-discrimination norms enshrined by international rule makers like the International Labour Organization. Despite the evident global drive towards LGBTQ+ inclusion, discriminatory sociocultural attitudes remain a challenge, restricting the social and economic potential of LGBTQ+ individuals and leading to limited workplace integration.
Advancing LGBTQ+ protections and social inclusion can lead to positive economic growth, workplace productivity and improvements in motivation. Several studies indicating that LGBTQ+-friendly firms have higher profitability and higher stock market valuations.1 Beyond profitability, LGBTQ+ inclusivity influences talent retention, with 40% of Gen Z and 38% Millennials stating they would actively look to change employees in favour of a more inclusive one.2
Workplace challenges
The persistent discrimination faced by many LGBTQ+ individuals can be attributed to entrenched societal perceptions of gender roles and gender expression. In the workplace and education contexts, these perceptions can act as a pay gap driver, with increased mental health reports and reduced levels of primary and secondary education resulting in LGBTQ+ employees earning less than their non-LGBTQ+ colleagues.3
LGBTQ+ workers face challenges in all stages of the employment cycle, from hiring, employee benefits and wellbeing, to career progress and compensation. Transgender employees, in particular, experience discrimination and workplace conflict at higher rates that cisgender employees.4
Despite the presence of anti-discrimination laws, LGBTQ+ workers may fear unequal treatment if their identity is known, and therefore choose to not disclose it in the workplace. Fear of unequal treatment may arise from an organisations’ lack of inclusive and equal benefits or policies including parental leave and healthcare, as well as the belief that the organisation may not treat non-inclusive or discriminatory behaviour seriously. Efforts to limit these negative impacts can involve offering confidential avenues to report sexuality or gender-based bullying or harassment, increase employee awareness of safe reporting channels, and ensure an inclusive benefits policy.
Best Practice
Although corporate and investor awareness for LGBTQ+ inclusion in the workplace is increasing, there are still considerable challenges that must be addressed to facilitate an inclusive workplace environment for all employees.
Organisations can improve inclusion through implementing best practices such as showcasing executive level support through executive allyship and measuring their performance against benchmarks including the Corporate Equality Index (CEI), the Australian Workplace Equality Index, Stonewall UK Workplace Equality Index or the Stonewall Global Workplace Equality Index. Evaluating outcomes against these benchmarks can help companies ensure they are providing adequate workplace protections, inclusive benefits, a supportive and inclusive workplace and are adhering to their corporate social responsibilities.
Company engagement questions on LGBTQ+ inclusion:
- How is sexual orientation and gender expression integrated into the organisational approach to DEI?
- Is the LGBTQ+ inclusion part of the consideration criteria for board recruitment and succession planning? Do the executive leadership and board members demonstrate explicit support for LGBTQ+ inclusion initiatives?
- Does the company non-discrimination policy explicitly include LGBTQ+ identities?
- Does the company have a confidential complaints mechanism covering breaches LGBTQ+ non-discrimination policy?
- How does the company make sure that the recruitment process is inclusive of LGBTQ+ candidates?
- How does the company make sure that the staff receives up-to-date and consistent training on LGBTQ+ inclusion (including senior managers, HR, and line managers)?
- Does the company offer equal benefits to employees in different- and same-sex marriages or partnerships?
- How does the organisation regularly evaluate psychological safety and wellbeing of LGBTQ+ employees? What actions have been taken in response to the findings?
Dimensions of diversity beyond gender series
1 Veda Fatmy, John Kihn, Jukka Sihvonen, Sami Vähämaa, Does Lesbian and Gay Friendliness Pay Off? A New Look at LGBT Policies and Firm Performance, Accounting & Finance, Vol. 62(1), 2022;
2 Deloitte, Deloitte Global 2023 LGBT+ Inclusion @ Work, June 2023
3 Marc Folch, The LGBTQ+ Gap: Recent Estimates for Young Adults in the United States, SSRN, 1 April 2022, or http://dx.doi.org/10.2139/ssrn.4072893; Dario Sansone, LGBT students: New evidence on demographics and educational outcomes, Economics of Education Review, Vol 73, December 2019
4 Brad Sears, Christy Mallory, Andrew R. Flores, Kerith J. Conron, LGBT People’s Experiences of Workplace Discrimination and Harassment, September 2021
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