The surprising power of LGBT+ inclusion in emerging markets

By Elliot Vaughn, global leader of Pride@BCG

It’s fascinating to witness the sheer speed at which high-potential emerging-market companies are becoming the world’s next great global corporations. But what I find equally compelling is how rapidly they are moving in another direction: towards embracing LGBT+ inclusion.

Take India’s Tata. This well-known economic powerhouse is now a serious player on the global stage. But less well known is the fact that it was one of the country’s early supporters of LGBT+, prohibiting discrimination, offering same-sex partner benefits, and launching an LGBT+ employee resource group—all at a time when same-sex acts were illegal in India.

Another striking example is Brazil’s Natura, the cosmetics company, which introduced its diversity and inclusion programme back in 2014. Natura has designed advertisement campaigns that promote LGBT+ rights in Brazil, including trans inclusion, and in 2019, for National Kiss Day, it promoted its new Love Collection products through ads featuring three lesbian couples kissing.

These are just two examples among dozens of companies headquartered in emerging economies that recent research by Open for Business, supported by BCG, found are becoming leaders in LGBT+ inclusion. The report was launched in Delhi this week with the vocal support of FICCI, India’s leading business federation.

What we found

Importantly, and perhaps surprisingly, we found no evidence that the high-potential emerging-market companies openly supporting LGBT+ inclusion suffered any negative impact on revenue growth or earnings before interest and taxes.

Forms of support range from measures to promote LGBT+ inclusive workplaces to becoming advocates in the public sphere, with some companies adopting these practices even when they are based in countries that have hostile attitudes or policies towards LGBT+ people.

Moreover, the study found a number of areas in which business performance could be enhanced for growing emerging-market companies that openly support LGBT+ inclusion. These include the ability to:

• Compete more effectively across global markets and supply chains, with more inclusive companies having a significantly higher proportion of revenue from international markets
• Attract and retain talent 
• Develop stronger brands and better customer orientation
• Build trust, since diversity and inclusion is increasingly seen as an indicator of strong corporate governance

The really good news is that these companies leading on LGBT+ inclusion were not a small proportion of our sample.  In our research, we found that 40% of almost 100 leading multinationals headquartered in emerging markets explicitly prohibit discrimination based on sexual orientation and/or gender identity. And a further 40% state they promote equal-opportunity employment, though without specific protections for LGBT+ staff.

Learnings from the leading companies 

So, what can we learn from these emerging market leaders? Here are some of the things all companies can do to ensure their pursuit of inclusion is successful:

• Be authentic about why you are working on this agenda: For many leaders the overriding case for LGBT+ inclusion rightly goes to the values they hold. While there is growing clarity on the business case for inclusion, as highlighted by this report, that may not be the leading message to communicate to employees, who will want to know that they are truly valued as individuals in all their diversity.
• Corporate policies: A good starting point is to ensure that diverse employees are protected in your internal policies no matter where they work in your business.
• Protection: Companies operating in countries where hostility towards LGBT+ people—whether social or legal—is evident can offer a safe haven by ensuring day-to-day communications are inclusive, language used is thoughtful, and that the corporate culture makes everyone feel welcome.
• The supply chain: Rather than screening out suppliers that are not supporting equality, companies should engage with them and support supply chain partners in advancing on the journey towards inclusion.
• Collaboration: Working with others can be really effective. Forming alliances or joining a consortium like Open For Business can enable the sharing of best practices and creation of a corporate voice that is far more powerful than that of any single company.

Sometimes, of course, the most effective first step is simply to start a conversation. In India, this is something Godrej are working to facilitate by funding and housing the India Culture Lab, a public platform to foster a wide range of conversations on contemporary India, including those about and among LGBT+ people.

What is becoming clear is that GDP growth and LGBT+ inclusion go hand-in-hand. The evidence is gradually building that countries, companies and individuals are more productive when LGBT+ people feel included.  In other words, as well as doing the right thing from a values perspective, from a business perspective these companies are also doing the smart thing, helping shore up their competitive abilities and enabling them to become established players on a global stage.

Elliot Vaughn (@Elliot_Vaughn) is an MD & Partner at BCG in London, and global leader of Pride@BCG. Outside BCG, Elliot has founded GiveOut, a UK charity raising funds for global LGBTQ advocacy and serves as a board director of the international LGBTQ human rights organisation OutRight Action International