3D rainbow on a light blue background

The annual celebration of Pride Month has become an integral part of the LGBTQIA+ movement, symbolizing the ongoing fight for acceptance and equality. However, as Pride Month has evolved, it has also become increasingly commercialized, with major corporations capitalizing on the LGBTQIA+ community’s estimated annual buying power of $917 billion through “rainbow retail.”

While Pride-themed products can be viewed as an encouraging societal step forward, it raises questions about the authenticity of corporate commitment to LGBTQIA+ issues, giving rise to a phenomenon now known as rainbow-washing. 

Rainbow-washing is the company practice of using the rainbow symbol and LGBTQIA+ themes in marketing and branding during Pride Month or other events without actively and/or consistently supporting or advocating for LGBTQIA+ rights or employees. 

As today’s definition of corporate value changes, stakeholder expectations are fueling a higher demand for increased transparency around LGBTQIA+ storytelling. This is accompanied by a stronger call to combat rainbow-washing by addressing LGBTQIA+ inequalities internally—in the workplace and boardrooms. 

Rainbow-washing is the corporate practice of using the rainbow symbol and LGBTQIA+ themes in marketing without supporting or advocating for LGBTQIA+ rights or employees.

A company’s engagement with social issues can have a significant impact on brand reputation, consumer trust, and the financial bottom line. While sometimes difficult to define and quantify, social metrics can help companies provide more authentic LGBTQIA+ brand narratives and improve corporate transparency.

Why DEI Efforts and LGBTQIA+ Inclusion Matter

Creating an inclusive workplace and company culture where stakeholders feel respected, valued, and safe isn’t just a “feel good” measure—it’s good for your workforce and the company’s bottom line.

A recent study shows Diversity, Equity, and Inclusion (DEI) initiatives can enhance organizations’ competitive position, agility, innovation, and brand reputation. Companies that were considered leaders in DEI were twice as likely to report a lead over industry competitors, more likely to report average market share growth, and almost three times as likely to report beating fiscal year revenue expectations by 10%.

Beyond the bottom line, DEI efforts can have tangible benefits for both employees and companies including increased ability to recruit and retain a diverse talent pool. Gartner found that inclusivity improves team performance up to 50% more in high-diversity environments. And, McKinsey reports that companies with top-quartile executive teams for ethnic and cultural diversity, including LGBTQIA+ identities, were 33% more likely to have industry-leading profitability.

Raising the Bar on LGBTQIA+ Transparency and Storytelling

Incorporating stronger LGBTQIA+ inclusion goals, data, and outcomes in business strategies is one way companies can back up targeted brand narratives and avoid rainbow-washing claims.

Consumers, employees, and investors alike are exerting more pressure on companies to increase transparency by providing information on their corporate structures, policies, breakdowns of employee gender and sexual orientation, and examples of support for the LGBTQIA+ community through social reporting—part of the social “S” of Evironmental, Social and Governance (ESG).

Consumers, employees, and investors alike are exerting more pressure on companies to increase transparency . . .

When preparing a story or report to support social transparency, it is important to include relevant metrics that can help showcase a company’s commitment to LGBTQIA+ issues, track progress, and communicate impact and outcomes to stakeholders. 

Here are 10 LGBTQIA+ metrics to consider including in brand storytelling and reporting: 

  • Data on the percentage of LGBTQIA+ employees within your organization, including both self-identified and voluntarily disclosed information. (Tip: breakdowns by job level, department, and geographical location can offer additional insights).
  • LGBTQIA+-focused Employee Resource Groups (ERGs) or affinity groups within your company. Reporting on the number of ERGs, their activities, and the level of participation can help tell a strong engagement story.
  • Non-discrimination policies that explicitly protect LGBTQIA+ individuals from discrimination in all areas of employment, such as hiring, promotions, compensation, and termination. 
  • Information about diversity and inclusion training programs related to LGBTQIA+ issues that are provided to employees at all levels. 
  • Company benefits and policies that offer to support LGBTQIA+ employees, such as inclusive healthcare coverage, transgender-inclusive policies, and family leave policies for LGBTQIA+ families.
  • Supply chain diversity information that showcases the inclusion of LGBTQIA+-owned businesses and suppliers and includes the percentage of LGBTQIA+-owned businesses in your supplier network.
  • Corporate partnerships, membership in, and collaborations with LGBTQIA+ organizations, advocacy groups, or nonprofits. 
  • Details on the mechanisms in place to report and address incidents of LGBTQIA+ discrimination or harassment.
  • Survey questions related to LGBTQIA+ inclusivity and that gauge employee satisfaction levels with your company’s support for LGBTQIA+ rights. (Tip: share aggregated results to showcase the overall sentiment within your organization).
  • Community engagement efforts that support LGBTQIA+ causes and organizations, such as sponsorships, volunteer work, or donations. 

While significant strides have been made in supporting the LGBTQIA+ community over the past decade, utilizing data and information that increases transparency can help companies build trust and track social progress over time.

Behind the Rainbow: Tools To Build LGBTQIA+ Workplace Equality

Beyond sheer metrics and storytelling, companies already reporting on DEI efforts can further strengthen their reporting by presenting the company’s due diligence framework and methodology. One tool for aligning global LGBTQIA+ policies and practices is the United Nations Human Rights Office Standards of Conduct for Business. These standards help support the business community in tackling discrimination against lesbian, gay, bi, trans, intersex, and queer (LGBTIQ+) people.

Detailing specific LGBTQIA+ deliverables resulting from the assessment process and identifying remedial steps required to address policy and operational deficiencies related to LGBTQIA+ issues can help support strategic improvement and ESG social goal-setting within companies.

Several other tools are also available to help companies establish comprehensive inclusion practices.

Ultimately, by combining robust storytelling through ESG metrics and genuine internal change efforts to support and nurturing the LGBTQIA+ workforce, companies can move beyond rainbow-washing and foster a more inclusive, equitable, and transparent culture. This not only benefits the LGBTQIA+ community but contributes to the overall long-term sustainability and responsible practices of the business.