Why would a company that takes inclusion seriously also be more likely to lead on sustainability? Sercan Demiralay, Erhan Kilincarslan and Zezeng Li argue that diversity and inclusion encourage innovation. And innovative workplaces are more likely to generate and sustain the innovations that support long-term environmental performance. For investors, in particular, this provides an additional lens for evaluating firms.
When we think about climate change and business, the topic is usually about renewable energy, carbon taxes or breakthrough technologies. Rarely do people mention workplace diversity, let alone LGBTQ+ inclusion, as part of the solution.
But our new research suggests that they should. We examined 898 American companies between 2010 and 2023 and found that firms with stronger LGBTQ+ inclusion achieved higher environmental scores. They cut more emissions, were more likely to use renewable energy and they ranked better overall on measures of environmental performance.