The Takeaway
While there has been a surge in the availability of products and investment opportunities focusing on environmental considerations such as renewable energy, clean technology, and carbon footprint reduction, there are fewer options for investors looking to incorporate social factors
For many sustainability-focused investors, diversity, equity, and inclusion (DEI) is a critical consideration when it comes to evaluating companies
The Morningstar Developed Markets LGBTQ+ Leaders Index represents a portfolio of companies diversified across economic sector and geography and rigorously screened for DEI inclusion, which can help investors achieve both social and investment goals
For many sustainability-focused investors, diversity, equity, and inclusion (DEI) is a critical consideration when it comes to evaluating companies. For some investors, their motivation is values-alignment, allocating capital to companies that are fair to all and making an extra effort to include marginalized groups. For others, DEI is simply good for business.
Within the environmental, social, and governance (ESG) framework, DEI falls under the “social” pillar. While there has been a surge in the availability of products and investment opportunities focusing on environmental considerations such as renewable energy, clean technology, and carbon footprint reduction, there are fewer options for investors looking to incorporate social factors.
The Morningstar Developed Markets LGBTQ+ Leaders Index is the latest addition to Morningstar Indexes’ unique range of socially focused solutions, which includes the Morningstar Gender Diversity Index, the Morningstar Minority Empowerment Index, the Morningstar Women’s Empowerment Index, and the Morningstar Sustainable Activities Involvement Indexes.
The new index highlights corporate leaders in inclusion by targeting 100 large- and mid-cap stocks diversified across region and sector and selecting companies with strong policies and practices related to their LGBTQ+ workforce. Data from Morningstar Sustainalytics and ExecuPride, a socially focused enterprise that harnesses data science to monitor advances and provide insights into corporate LGBTQ+ inclusion, underpins the index. Data analysis shows that the index can achieve both social and investment outcomes while applying rigorous selection criteria to ensure only companies with strong LGBTQ+ inclusion policies and practices are included.
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