New Global Champions
wHY FAST-GROWING COMPANIES FROM EMERGING MARKETS ARE EMBRACING LGBT+ INCLUSION
The sample of selected companies for this research represent 96 of the fastest growing companies headquartered in emerging markets. They are poised to become the world’s next global firms and are quickly improving on global best practices to accelerate their growth as well as to secure this position. One of these best practices the companies are beginning to adopt and improve upon is LGBT+ inclusion, even though many are based in countries or cities that are dangerous or hostile for the LGBT+ community. This report presents a qualitative evaluation of this trend, and explores the underlying drivers.
Representing the first-ever analysis of the financial impacts of LGBT+ inclusion on multinational companies headquartered in emerging markets, the report found a direct relationship between an emerging-market company’s support for LGBT+ inclusion and its ability to more effectively connect with global markets and supply chains. At the same time, findings from the report also demonstrated that fears about the possible negative impacts arising from the support for LGBT+ inclusion were unfounded.
The findings from this report have far-reaching implications for emerging-market companies looking to expand internationally: LGBT+ inclusion can be a key growth catalyst for them to achieve their global ambitions.
Since 2015, support for LGBT+ inclusion has doubled among fast-growing companies in emerging markets
Companies were categorized into three Tiers according to whether they have public statements against LGBT+ discrimination (Tier 1), public statements against general discrimination (Tier 2) or no public statements (Tier 3). Only a minority of companies (22%) have no public statements at all.
Comparing the latest results with data from Open For Business reports published in 2015 and 2018, the number of companies that have public policies against LGBT+ discrimination has doubled from 19 in 2015 to 37 in 2019.
LGBT+ inclusion allows high-potential emerging-market companies to more effectively connect with global markets and supply chains, without seeing any negative financial impacts
An analysis of financial indicators finds that the companies which openly support LGBT+ inclusion have revenue growth and earnings before interest and taxes (EBIT) margins in line with peers. This finding empirically shows that fears of reputational and revenue damage from supporting LGBT+ inclusion, which are common in anti-LGBT+ markets, are likely overstated.
The analysis found a direct relationship between a company’s support for LGBT+ inclusion and its ability to more effectively connect with global markets and supply chains: companies who are in Tier 1 see 20 percentage point higher proportion of revenue come from international sources than those that are in Tier 3.
There are a number of connections between LGBT+ inclusion and business performance in high-potential emerging-market companies.
Through an analysis of financial data and a series of interviews with leaders of the companies in this cohort, the report explored the links between LGBT+ inclusion and the performance of high potential emerging market companies. This quantitative and qualitative review yielded six dimensions in which LGBT+ inclusion is linked to aspects of business performance.
