The simple reason so many US businesses openly support LGBT rights

Apple has pride.
Apple has pride.
Image: Reuters/Noah Berger
We may earn a commission from links on this page.

Each June, Pride season is heralded in US stores by the arrival of rainbow-hued Pride collections. This year, brands like Target, Converse, and Levi’s have decked the store halls with their colorful products and merchandise. These collections might seem like superficial overtures in allyship, aimed more at filling businesses’ coffers than showing genuine support for the LGBT community. Yet, this skepticism is often unwarranted. There’s a lot of business sense in supporting the LGBT community, beyond even the procurement of the pink dollar.

This is about so much more than marriage equality. Businesses are becoming increasingly invested in LGBT rights and diversifying their workforce because, as Out Leadership’s managing director Stephanie Sandberg tells Quartz, “their competitive edge depends on it.”

The “competitive edge” pertains both to commodities and labor. Reflecting upon the hundreds of businesses that supported the marriage equality movement, Todd Sears, the founder of Out Leadership, explains how company cohesion and sustainability is linked to employee equality. “Businesses that had already adopted policies that treated every employee equally [prior to marriage equality in 2015] saw the negative effects of a state-based patchwork policy on marriage equality,” he said. “It complicated their strategies and made it more difficult to locate talent in states that lacked protections for married LGBT couples.”

“Big business was way out ahead of government when it came to creating domestic partner benefits for their teams—and they remain way out in front when it comes to non-discrimination policies,” Sears maintains.

At the same time, states that discriminate against the LGBT community in the form of gender-based and sexuality-based discriminatory laws are drawing the ire of businesses. “If a state wants to allow for discrimination against the LGBT community, companies will choose to take their employees and business elsewhere,” Todd asserts. The consequences are manifold: Jobs disappear when businesses leave, which negatively affects consumer spending, which compounds the negative effects on businesses.

We know marriage discrimination resulted in multi-million dollar losses for state economies prior to the US Supreme Court ruling legalized gay marriage. Similar consequences have been felt in states discussing anti-LGBT laws. North Carolina is facing an unprecedented business backlash after passing HB2, the notorious “bathroom bill.” Hundreds of business executives have already called for a repeal of the law, and businesses like PayPal and Deutsche Bank have pulled or frozen hundreds of jobs from the state in protest.

“We’re already seeing that businesses are standing up for equality when it comes to the Religious Freedom Restoration Acts and other discriminatory legislation that are rapidly proliferating in states around the country,” Todd observes. “In Indiana, opposition from the business community forced the government to back down from the RFRA they passed last year; in Georgia, Governor Deal listened to the voice of business and vetoed the bill that came before him.”

This year at Davos, a discussion about LGBT rights hit the global stage in a big way. “Multinational companies have enormous economies and employ millions of people,” Beth Brooke-Marciniak, the global vice chair for public policy at Ernst & Young, said in the session titled “Diversity Barriers in Emerging Markets.” “This gives them the ability to influence change on this issue in a unique and powerful way.”

The actions of businesses around the country prove that going forward, the LGBT movement must fight for a decentralized constellation of state-based discriminatory laws based on gender and sexual orientation. Protecting the LGBT community and advocating for their rights makes both ethical and economic sense. “Big businesses are positioned to drive equality because, again,” Sears notes, “a state-based patchwork of laws that impact their ability to attract, retain, and support all of their employees is ultimately bad for business.”

It is an often overlooked fact that the LGBT community is a loyal customer base. The community’s buying power, largely attributed to its disposable personal income, was estimated at $884 billon in 2014. In 2016, the global LGBT buying power is estimated at $3.7 trillion.

Importantly, allies are also incredibly attentive to corporate treatment of the LGBT community. The Center for Talent Innovation’s 2016 report, Out in the World: Securing LGBT Rights in the Global Marketplace, found that “71% of LGBT individuals and 82% of allies say they are more likely to purchase a good or service from a company that supports LGBT equality.”

This is an ethical issue, but it’s also an economic one. Brand loyalty, coupled with the fact that LGBT-inclusive companies successfully recruit and maintain top talent, explains why supporting the LGBT community has become so good for business.