Is LGBTI equality good for business or the right thing to do?
Finding the best argument for moving the needle forward in the flight for LGBT+ equality

For those of us working to advance the cause of LGBT+ equality globally, we sometimes don’t pay enough attention to the concept of self-interest. That means companies are motivated first and foremost by profit and countries are focused on their GDP growth.

Over the past 20-30 years, those advocating for LGBTI inclusion within companies and outside of their walls – with Out Leadership being the pioneer in this area – have leaned heavily on business and economic arguments:  

  • Having a diverse workforce that includes people from as many different backgrounds as possible has a strategic, business value. 
  • It strengthens corporate performance by maximizing talent and multiplying the different perspectives that staff bring to their tasks, which in turn improves business outcomes.

These same arguments have helped convince companies of the importance of tackling LGBTI discrimination at work and supporting their LGBTI employees in the workplace, irrespective of local laws and policies in the countries where they operate. Today, the business and economic case is extremely well articulated and backed by rigorous and numerous research studies.

While at the World Bank I led a groundbreaking study in 2014 – carried out by Lee Badgett at the Williams Institute – which produced the first estimate of the cost of homophobia in India.

This exercise has since been replicated in several countries around the world. I was baffled at how this back-of-the-napkin estimate has appealed to the public. The main conclusion of the study was that the economic cost of homophobia is between 0.1 of a percent to 1.7 percent of a country’s GDP. This is equivalent to a full-scale recession according to Lee and has been repeated in countless speeches and papers since then and was even included in the Supreme Court of India’s decision in 2018 to decriminalize homosexuality.

But as important as profitability and economic growth is and always will be, for many companies meeting expectations of staff, customers and shareholders can require measures and commitments that will only ever have a marginal effect on profitability. With consumers and investors becoming increasingly vocal about social issues, businesses are under growing pressure in many markets to demonstrate their social and environmental credentials, to prove themselves a force for social good, not just monetary profit.

Ironically, by showing themselves to be active in the fight for social justice, human rights and a greener world – none of which, by themselves, are obvious revenue-generators – companies can maximize their appeal to certain segments of their customer base, thereby burnishing the brand and boosting profitability in the medium and longer-term. This line of reasoning has been deployed to urge companies to do more to promote LGBTI rights both within and beyond the workplace.

In short, positioning oneself on social issues and particularly LGBTI rights allows for meaningful connections with employees, customers and investors which are increasingly seeking to spend and invest their personal money with the companies whose values are aligned with their own.

I believe it is linked to the lack of agency many people have in the democratic process. Being aligned with this can become a lifeline in a world where mistrust in the private sector has a heavy cost on companies as illustrated by the backlash to Amazon announcing New York as the location for their headquarters over concerns with the company’s labor record. In fact, I reposted this article yesterday which illustrates how not wearing your values on your sleeve might condemn companies to disappear in many markets.

In my previous position at the United Nations where I co-authored the United Nations LGBTI Standards of Conduct for Business, I had to frame my argument as a Human Rights one and appeal to companies’ obligations under the UN Guidelines on Business and Human Rights.

However, as I pointed out in a recent post, the human rights agenda is losing steam including within the UN itself which disproportionately affects LGBTI rights. In addition, there are several areas of the world in dire need of progress on LGBTI issues such as China, the Middle East and Africa where Human Rights are increasingly perceived as a Western colonialist agenda.

I like to repeat that when it comes to LGBTI equality, I am not married to the human rights argument – if other arguments are more successful, we must explore them and be practical about it.

Many LGBTI activists remain wary of framing the case for action in terms of economic costs and benefits. Their reluctance is based on an historic rejection of capitalism by many in the movement (read more here about Harry Hay and the Mattachine Society), the fear of “pinkwashing” by countries and companies, the risk of leaving behind the most marginalized in our community and the idea that human rights are not for sale.

It is up to leaders in the LGBT+ movement to reiterate that success in a so-called “post-human rights” world will require building broader coalitions. We also have to ensure we build the mechanisms for accountability for companies and countries that deem themselves “LGBTI friendly,” something Out Leadership is taking the lead on with our LGBT+ Business Equality Index and accompanying CEO Briefs. Finally, we should focus on ensuring that all segments of our community benefit from progress – not only educated white gay men in the corporate sector.

Ultimately, the business case and the moral case are not mutually exclusive; in different contexts, emphasis might be put on one over the other. To remind companies of the (sometimes hidden) costs of LGBTI exclusion or of staying silent in the face of human rights abuses is not to negate the principle that all people deserve to have their dignity and rights respected.

The business case needs a foundation of human rights just as human rights arguments can be made more forceful by consideration of the cost of discrimination and lack of protection. While activists have legitimate and principled reasons for being reluctant to engage companies on LGBTI issues, engaging with business offers activists opportunities to help shape corporate decisions as well as tap new sources of support that would otherwise be unavailable.

I will end with these words from Kaushik Basu, the former Indian Chief Economist of the World Bank:
“If removing discrimination against a minority group increases GDP that is good news. If enhancing justice and equality across human beings promotes GDP that is reason for celebration. But we must not argue that removing discrimination against minorities is good because it promotes GDP growth, that justice and equality are important because they lead to a higher GDP. Removing discrimination and promoting greater equality and justice are good in themselves.”

Tactically, the business and economic case is our best chance at maintaining the momentum of the past 50 years on global LGBTI equality, yet we can avoid drinking our own kool-aid by remembering that LGBTI issues remain first and foremost a human rights issue.

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