In the News

"Advocacy Investing" Empowers GLBT Investors

Monday, October 24, 2005
by Marc J. Lane

Gay, lesbian, bisexual and transgender employees and consumers are working hard to fight discrimination in the workplace and the marketplace. They’ve mobilized public opinion with increasing effectiveness, and they’re gaining ground in the struggle for protection from discrimination at work and at home.

But the GLBT community also has enormous untapped power to drive positive social change through the investments it makes. And it can do so without giving up profits.

Advocacy Investing,” the socially responsible investment strategy I developed, empowers ethical investors by promoting their principles without sacrificing investment returns. It’s a potent tool to leverage the GLBT community’s financial strength and give voice to its views on sexual orientation, gender identity and expression issues.

Supporting companies whose behavior collides with the investor’s core convictions simply makes no sense. After all, where a gay-friendly company satisfies all the rigorous financial screens the prudent investment advisor imposes, there’s no reason to invest instead in its hostile competitor.

Why should GLBT investors back retailers RadioShack Corp. (nyse: RSH) or Circuit City Stores (nyse: CC) - - which have not adopted employment policies protecting gender identity or expression, offer no diversity training, fail to support an employee resource group or diversity council, and sponsor no GLBT community events or organizations - - when Best Buy Co., Inc. (nyse: BBY) does all those things?

Or why should GLBT investors choose to invest in financial services giant MBNA Corp. (nyse: KRB) - - which doesn’t protect gender identity or expression, doesn’t support a GLBT employee resource group or diversity council, and doesn’t include GLBT issues among its marketing and philanthropy initiatives - - when Citigroup Inc. (nyse: C) and J P Morgan Chase & Co. (nyse: JPM) both score a perfect 100 on the Human Rights Campaign’s 2005 Corporate Equality Index “report card”?

My new book, Profitable Socially Responsible Investing? (Institutional Investor Books, 2005), reports on my original research which tracked public companies’ social and financial performance over eight years, and makes the case that investing in companies which promote social justice can be profitable. (So can investing in companies which are good stewards of the environment.) And it also argues that when like-minded investors join together around issues of common concern, their votes count: corporate management listens - - and eventually acts.

Take the notorious example of ExxonMobil (nyse: XOM). When Mobil Corp. merged with Exxon in 1999, Mobil’s written employment policy, which provided domestic partner benefits and prohibited discrimination against employees because of their sexual orientation, was unceremoniously scrapped. ExxonMobil is the only oil company in the Fortune 100 which fails to include sexual orientation in its non-discrimination statement.

But the tide is turning, thanks to activist shareholders. Every year since the merger, a shareholder resolution has been introduced to protect the company’s employees from discrimination based on sexual orientation. And every year the vote in favor of the resolution increases. This year 29.4 percent of the company’s shares were voted in support of the resolution. ExxonMobil’s management is unlikely to stick stubbornly to its untenable position much longer.

More and more GLBT employees insist that their employers adopt equal protection policies and sanction domestic partnerships. And GLBT consumers boycott organizations with anti-gay missions. Gay, lesbian, bisexual and transgender investors should hold the companies they own no less accountable.
Marc J. Lane is a Chicago attorney, a Master Registered Financial Planner, and the President of Marc J. Lane Investment Management, Inc.



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