It’s a clear case study on the intersection of business and social activism.
One of the clearer case studies on the intersection of business and social issues is how companies have handled the rise of LGBTQ rights.
For many years, businesses have been working to improve their brands and their internal practices on LGBTQ issues, investing in culture, benefits, and marketing to welcome LGBTQ workers and customers, and to telegraph inclusion and openness. Political activism has been slower in coming. In recent years, however, something has shifted: more companies are speaking up on public policy impacting the LGBTQ community, and many are doing so in places where they face stiff headwinds, putting their brands and political relationships on the line — a pointed action in a climate where legal and political debates continue over whether businesses can refuse to serve LGBTQ people.
This increased public activity is largely the result of rapid opinion shifts, and Millennials and Generation Z are often at the leading edge. Sixty-seven percent of young adults in the U.S. do not believe that small business owners should be allowed to refuse service to LGBTQ people for religious reasons, compared to 60% of Americans overall and 53% of senior citizens. Millennials are now the largest group in the U.S. workforce and are essential to recruitment, brand, and consumer strategies. The public opinion shift they are driving has a wide range of economic impacts, such as the war for talent and the ability of cities and states to attract corporate investment. Tourism — including conventions and major sporting events — is a specific concern. In a 2016 poll, nearly 50% of American meeting planners said they would avoid planning events in states that pass anti-LGBTQ legislation. And the net approval of same-sex relationships is emerging as a predictor of competitiveness and innovation in cities.
All this to say, LGBTQ inclusion is good for the economy, and as more and more businesses make this connection, they are stepping forward to make the economic case for non-discrimination protections and against discriminatory laws. And they are not doing it alone. They are turning to coalitions to ensure they have strength in numbers, resources, and messaging alignment.
In one example, then-Indiana Gov. Mike Pence signed a “religious exemption” bill that would have allowed businesses to turn away LGBTQ customers and potential hires in 2015. This development was met with an immediate loss of 12 business conventions worth $60 million and the launch of the Indiana Competes business coalition advocating for LGBTQ nondiscrimination. The law was quickly amended. The pattern continued in 2016, when North Carolina lawmakers passed the HB2 “bathroom bill” to restrict where transgender people could use the restroom in public and in schools. HB2 was filed, passed, and signed into law in a single day, and businesses immediately began to take individual actions. Within a week of passage, two equality groups had organized more than 140 major CEOs and business leaders into an open letter to the governor. In the year that HB2 remained a law, the state lost $630 million in canceled sports events, job opportunities, performances, and conventions. The law was repealed in 2017.
That same year, Texas lawmakers pursued a similar “bathroom bill” and economists predicted massive losses: in tourism alone, $3.3 billion in annual gross product and 35,600 full-time jobs — just initially. The legislation failed, but the state still saw $66 million in cancelled conventions over the course of the debate. Three business coalitions were active in this effort: Texas Competes (a coalition that has been making the economic case for nondiscrimination since 2015), Keep Texas Open for Business (a coalition within the state chamber of commerce), and Texas Welcomes All (a coalition of tourism stakeholders).
These coalitions serve more than a convening role.
First, they reduce political risk by building critical mass. Because every business has its own legislative agenda, speaking up on a divisive issue, often in opposition to elected leadership, can create risk of political retaliation. But if a business is joined by its peers, the risk of being an isolated target drops significantly.
Second, coalitions centralize resources and expertise, such as political intel and data on the economic impacts of discrimination. While a company might be internally supportive of its LGBTQ employees, legislation impacting the LGBTQ community isn’t typically the core competence of a corporation’s government affairs team, who tend to focus on industry issues like regulations and taxes. This expertise gap becomes an issue when public policies impacting LGBTQ people have potentially huge financial, operational, and brand impacts. Even tracking legislation can be a challenge, because many measures with discriminatory intent may be worded in confusing ways, as was the case for the 2008 California Marriage Protection Act, and more recently, Question 3 in Massachusetts. Other measures may never explicitly mention LGBTQ people, as with Arkansas’ Intrastate Commerce Improvement Act.
On their own, businesses are less likely to have the expertise to recognize and thoroughly analyze these bills and connect them back to their economic and business risks. Coalitions provide outsourced expertise and give businesses the chance to partner with state and national equality organizations that can bring their own resources to bear. Through these partnerships, businesses gain access to economic impact studies, public opinion data, analysis of filed legislation, and insights from peers in other states that have gone through a similar process. This information helps them communicate a strong, data-driven argument against discriminatory legislation.
Lastly, coalitions help their members develop a clear and unified message that, in turn, makes their case for nondiscrimination more powerful to lawmakers and the public. Together, these core functions of business coalitions on LGBTQ rights help build trust among business leaders — a much-needed currency when these efforts become politically hot.
Though nondiscrimination protections for LGBTQ people are advancing in places like New York and Virginia, advocates in the U.S. still anticipate discriminatory bills filed in several states, focused on religious exemptions, preemption of municipal nondiscrimination protections, and the rights of transgender people. The data-backed economic argument for nondiscrimination has the power to drive bipartisan support, by decoupling the issue from partisan politics and providing cover for pro-business lawmakers representing socially conservative districts.
Nationally, and in individual states where pro- or anti-LGBTQ legislation is proposed, businesses have a real opportunity to make a difference. They can join an existing coalition or, in the absence of such an effort, ask their local chamber of commerce, visitors bureau, or LGBTQ equality organization to lead the way by creating one. Once convened, or on their own, they can place op-eds in local newspapers to influence public opinion, host educational sessions for employees, and make direct appeals to legislators based on both economic and values-based arguments. And when nondiscrimination legislation passes, businesses can be vocal in their praise and celebration of these efforts as vital to investing in a forward-looking, inclusive economy.
The work of equality requires many voices, and the emergence of the business community as a major force for LGBTQ rights has changed the conversation. Business leaders and the coalitions that convene them will have a game-changing role to play in 2019 and beyond, in the U.S. and around the world. Business competitiveness, the economic strength of their operating environments, and their commitment to inclusion and diversity demand that they stay the course.
Jessica Shortall leads the newly-launched America Competes coalition, a project of Freedom for All Americans that is the “connective tissue” for businesses across the dynamic landscape of LGBTQ rights in the U.S. She has also led Texas Competes, a coalition of 1,400 employers making the economic case for LGBTQ inclusion in the Lone Star State, since 2015.
This article originally appeared in HBS Working Knowledge.
