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Daily CSR
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ESG Disclosure: The Impact and Future of LGBTQ+ Inclusivity in Corporate Reporting


ESG Disclosure: The Impact and Future of LGBTQ+ Inclusivity in Corporate Reporting
Driven by market dynamics and regulatory pressures, all types of organizations are increasingly adopting comprehensive Environmental, Social and Governance (ESG) and sustainability reporting. Almost all major global corporations disclose their ESG initiatives, with 86 percent of the companies surveyed in this study employing multiple ESG-related standards and frameworks to convey sustainability data.
Regardless of the terminology used, stakeholders such as investors, consumers, employees, and regulatory bodies overseeing these companies are interested in understanding how organizations are managing risks and supporting their employees and the environment in their operations. This interest is unlikely to wane. Even when ideas like equity and inclusion are dismissed as ‘woke’ for political reasons, employees tie their job satisfaction to their companies’ dedication to diversity, equity, and inclusion (DEI). In fact, IWBI’s 2023 State of Workforce Well-Being Poll, conducted earlier this year, found that 78 percent of employees consider their company’s commitment to DEI a significant factor in their job satisfaction. As stakeholders increasingly demand accountability from employers, it becomes essential to measure the impact on often overlooked and marginalized communities.
Despite the proliferation of frameworks designed to assist organizations in enhancing transparency and disclosure, and the availability of resources for companies to use in their disclosures, there is considerable variation in how companies should address support for equality in their disclosures. In fact, only 14 percent of Fortune 100 companies and 10 percent of FTSE 100 companies disclose the size of their LGBTQ+ workforce.
This is according to the Return on Equality™ ESG Report by Out Leadership, which revealed that while 91 percent of Fortune 100 companies report on their LGBTQ+ inclusion efforts through their ESG and DEI reports, many employers still need to improve in the area of self-identification to ensure that this work results in representation within their own workforce. The report includes personal insights from IWBI President and CEO Rachel Hodgdon and a section dedicated to the 12 Competencies for Measuring Health & Well-being, explaining how they assist organizations in effectively measuring and reporting on key DEI metrics.
The report was launched alongside Out Leadership’s inaugural Return on Equality™ Summit, an LGBTQ+ inclusive ESG event held at Nasdaq MarketSite on October 4.
Ken Janssens, a Senior Advisor with Out Leadership, initiated the first session of the summit by providing an analysis of the report, which also highlights six leading reporting practices and four advanced reporting practices that effectively support LGBTQ+ inclusiveness in ESG reporting.
In the second session, IWBI President and CEO Rachel Hodgdon led a discussion with John Adler, Chief ESG Officer, Office of New York City Comptroller, and Karl Racine, Partner, Hogan Lovells, and former Attorney General of Washington, D.C.
The panel, titled “The Nationwide Status of ESG Laws, Corporate Support and the Economic Impact,” examined corporate perspectives on LGBTQ+ equality and the broader environment surrounding ESG disclosure. The views of Racine and Adler were divided. When asked to describe the global state of ESG in a single word, Racine responded with “fractured,” while Adler said “improving.”
Adler observed that there is still “a growing number of asset-owner offices with heads of sustainability, ESG, etc… It’s still expanding, particularly internationally.”
However, Racine’s comment should not be seen in a negative light. He emphasized the need to “respond forcefully to the anti-ESG folks. Investing in your talent is incredibly important,” a strong endorsement for the “S” in ESG, and concluded the session with “keep up the fight.”
The day concluded with two more sessions, “Why ESG should be more LGBTQ+ Inclusive from the Standpoint of Different Stakeholders (investors, regulators, workers/customers),” and a fireside chat, “Nasdaq Metrics that Matter: Navigating the ESG Investment Landscape.”
Despite the diversity of backgrounds and perspectives throughout the day’s events, a common theme emerged from nearly all speakers: ESG informs risk and speaks to financial materiality, and therefore, ESG disclosure is here to stay. Moreover, the data indicates that businesses with less diversity are less resilient, implying they may be riskier investments in the future.