Study: Corporate LGBT Policies Impact Investor Behavior

New research shows that stock market investors not only pay attention to the LGBT policies of publicly traded companies, but invest accordingly.

A study conducted by Auckland University of Technology in New Zealand and published in the Journal of Economic Behavior and Organization looked at 400 top U.S. companies that had adopted LGBT-supportive policies for the first time. The study found that around 12 months after adopting queer-affirming policies, companies not only received an uptick in organic online searches by potential investors, but a significant amount of stock was traded based on the adoption of those policies.

“Investors seem to be very interested in this sort of topic when a firm initiates these kinds of policies,” study co-author and AUT Professor of Finance, Nhut Nguyen, told Stuff New Zealand.

An important note, though, is that the interest in LGBT policies and subsequent stock buying and selling seemed to fall along ideological lines: investors who support LGBT-friendly corporations purchased more stocks in companies with queer-inclusive policies, while investors with anti-LGBT views chose to reduce the shares of those stocks in their portfolios.

Additionally, the study found that mainstream public sentiment toward LGBT rights influences investors’ decisions when it comes to buying or selling stock in LGBT-allied companies. For example, when the majority of public opinion for queer rights is favorable, investors tend to subsequently invest in LGBT-supportive corporations.

But the lessening gap between investors’ buying and selling of queer-allied company stocks as indicated in the study may be more evidence that LGBTQ+ rights are becoming more accepted in the United States.

“Fundamentally, our study suggests that investors can do well financially while doing social good,” Nguyen said.