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Workplace Equality Index tracks stock performance of LGBTI-friendly corporations

Workplace Equality Index tracks stock performance of LGBTI-friendly corporations

The trading floor of the New York Stock Exchange

Denver Investments’ annual Workplace Equality Index (EQLT) was unveiled today.

The latest ranking, which has been produced annually since 2001, comprises of 242 leading US Corporations; the highest number in its history.

The listing is a stock index of publicly-traded companies that support lesbian, gay, bisexual and transgender (LGBT) equality in the workplace.

John Roberts, founder of the Workplace Equality Index and a partner at Denver Investments, said in a press statement: ‘Our research suggests that forward-looking corporations also are among the most progressive and inclusive. This also tends to make them market leaders given their growing demand for diverse, high-performing talent.’

To be considered for the Index, corporates had to meet certain criteria, such as having a minimum market capitalization of $250 million and having an equal employment opportunity statement that prohibits LGBT discrimination.

Among the 242 companies are many well-known brands, such as Abercrombie & Fitch, Apple, AT&T, Bank of America, Barnes & Noble, Chevron, General Motors, Eli Lilly, JP Morgan Chase, Microsoft, McDonalds, Marriott and Sears.

The Index is decided by an advisory board of nine people, which includes Todd Sears (founder of Coda Leadership and Out on the Street) and Debra A. Neiman, CFP (founder of Neiman & Associates Financial Services, LLC, and Pride Planners), among others.

New companies to join the Index this year included data provider Kroger, Royal Caribbean Cruises, Tiffany and Co., Twitter and Markit.

‘Diversity and inclusiveness are essential to Markit’s culture and our success,’ said Lance Uggla, CEO of Markit. ‘We are delighted to be included in the Workplace Equality Index and to be recognized as one of the more LGBT-inclusive public companies trading in the US.’

The EQLT had a value of 2,036 on 27 December 2010, rising to 3,797 in 14 December 2015 – an increase of 86% over four years. Although impressive, it should be noted that rise was largely due to sharp rises in 2013 and 2014; the index flat-lined this year (from a value of 3,799 on 14 December 2014 to 3,797 on 15 December 2015).

According to Denver Investments’ website, it makes ‘no claims about the direct or indirect relationship between a corporation’s gay-inclusive and welcoming policies and its market performance,’ and says it created the Index following a recognition that some people want to invest only in companies that support LGBTI inclusiveness.

Commenting on this year’s performance, Roberts told Gay Star Business: ‘It is slightly lagging the S&P 500 Index, but for predictable reasons. The index did benefit from strong performance the previous two years. We got a great relative performance boost from lower energy prices and strong consumer demand. Those two trends haven’t been as pronounced in 2015.

‘This year the equal-weight structure of the index worked against us in that much of the market’s return has come from the largest stocks. Many of these are in our index such as Microsoft, Google, GE, and Apple, but at lower weights.’

Denver Investments is not the only organization to look at the diversity policies of corporations and their stock value.

In 2013, Credit Suisse launched an LGBT Equality Index (CSLGBT), allowing investors to put their money into a selection of companies that scored well on Human Rights Campaign’s Corporate Equality Index.

It calculated that the companies in the CSLGBT saw their stocks increase by 13% in the previous five years, although its value has also remained fairly static over the last 12 months, creeping up just 0.58% in value from December 2014-December 2015.

A stock index composed by Diversity Inc. which includes the publicly-traded Top 50 corporations as ranked on overall diversity and inclusion policies, outperformed the Dow Jones industrial average and S&P 500 on a one-, three- and five-year return.