Investing in Inclusion: Everything You Need To Know About LGBTQ+-Friendly Investing

Investing in Inclusion: Everything You Need To Know About LGBTQ+-Friendly Investing

June 11, 2024

Inclusion is a decent thing to do from a human standpoint. It may also improve the profitability of a business that commits to investing with environmental, social, and governance (ESG) factors in mind.1 Whether you are part of the LGBTQ+ community or are interested in expanding your investments' social meaning, here are some tips on getting started with LGBTQ+-friendly investing.

What is LGBTQ+-friendly investing?

This investing category is a sub-category of "socially responsible investing" (SRI) and ESG investing. One of the popular examples of SRI investing involves avoiding companies whose products promote or contribute to harm (e.g., gun or cigarette manufacturers).

But an LGBTQ+-friendly portfolio is a little different. These portfolios include only companies and investments committed to gender- and sexual-orientation-based equality. The investigation of the companies may include the governance of the companies and the contributions corporate leaders make to political parties. Assessing a company's commitment to LGBTQ+ rights may be a multi-faceted process.

How To Get Started

Research Your Investments

Selecting a portfolio of LGBTQ+-friendly investments may seem overwhelming when starting from scratch. Fortunately, several tools may make the screening process easier.

For example, the Human Rights Campaign Foundation has an equality index that helps screen investments for metrics like employment protection, the healthcare benefits offered, employee recruitment strategies, charitable donations, and a variety of other categories.2

Expand Your Scope To Include ESG Investments

Although not all ESG-minded investments focus on the gay community, there is a significant overlap between companies committed to environmental, social, and governance responsibility and those committed to LGBTQ+ equality. And until there is a broader array of LGBTQ+-friendly funds from which to choose, many financial professionals consider ESG funds the starting point.

Find an LGBTQ+-Friendly Financial Professional

Tracking and researching investments could be a full-time job that you may not have the time or desire to do. By finding a financial professional who might assist you in selecting an LGBTQ+-friendly portfolio and monitoring developments on this front, you may manage your assets with someone who understands your point of view and is willing to pursue your investment criteria.

To get started, talk to those you trust in the LGBTQ+ community to see whether they have any recommendations. And when interviewing financial professionals, ask probing questions to gauge their knowledge about LGBTQ+-friendly investments and ESG investing.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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1 Sustainability and profitability can co-exist. Here's how

2 Best Places to Work for LGBTQ+ Equality 2022