IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v34y2025i8p10785-10802.html

LGBTQ+ Workplace Inclusion and Corporate Environmental Performance

Author

Listed:
  • Sercan Demiralay
  • Erhan Kilincarslan
  • Zezeng Li

Abstract

This study examines the impact of LGBTQ+ workplace inclusion on corporate environmental performance, with a focus on the mediating role of environmental innovation. Drawing on 6419 firm‐year observations from 898 US firms between 2010 and 2023, we measure LGBTQ+ workplace inclusion using the Human Rights Campaign's Corporate Equality Index. Our findings show that firms with stronger LGBTQ+ inclusion exhibit higher environmental performance scores and greater renewable energy consumption. We further find that this relationship is partially mediated by environmental innovation, indicating that LGBTQ+‐inclusive workplace practices enhance environmental outcomes by fostering innovation. To strengthen causal inference, we implement a quasi‐natural experiment based on the staggered legalization of same‐sex marriage across states. Results reveal that firms headquartered in states that recognized same‐sex marriage prior to the Obergefell v. Hodges ruling demonstrate superior environmental performance. These findings are robust across various identification strategies and estimation methods.

Suggested Citation

  • Sercan Demiralay & Erhan Kilincarslan & Zezeng Li, 2025. "LGBTQ+ Workplace Inclusion and Corporate Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 34(8), pages 10785-10802, December.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:8:p:10785-10802
    DOI: 10.1002/bse.70134
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.70134
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.70134?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Griffin, Dale & Li, Kai & Xu, Ting, 2021. "Board Gender Diversity and Corporate Innovation: International Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(1), pages 123-154, February.
    2. Kumar Ramesh & Raiswa Saha & Susoban Goswami & Sekar & Richa Dahiya, 2019. "Consumer's response to CSR activities: Mediating role of brand image and brand attitude," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(2), pages 377-387, March.
    3. Nurlan Orazalin & Mady Baydauletov, 2020. "Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1664-1676, July.
    4. Gozgor, Giray & Ho, Thang & Li, Jing & Mousavi, Mohammad Mahdi, 2024. "The impact of energy diversification on firm performance: The moderating role of corporate social responsibility," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    5. Robert G. Eccles & Ioannis Ioannou & George Serafeim, 2012. "The Impact of Corporate Sustainability on Organizational Processes and Performance," NBER Working Papers 17950, National Bureau of Economic Research, Inc.
    6. Kizys, Renatas & Mamatzakis, Emmanuel C. & Tzouvanas, Panagiotis, 2023. "Does genetic diversity on corporate boards lead to improved environmental performance?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    7. Werther, William Jr. & Chandler, David, 2005. "Strategic corporate social responsibility as global brand insurance," Business Horizons, Elsevier, vol. 48(4), pages 317-324.
    8. Ozgur Ozdemir & Erhan Kilincarslan, 2021. "The governance role of shareholders and board of directors on firm performance: an eclectic governance-performance model," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 29(4), pages 493-527, August.
    9. Patricia Martínez & Andrea Pérez & Ignacio Rodríguez del Bosque, 2014. "Exploring the Role of CSR in the Organizational Identity of Hospitality Companies: A Case from the Spanish Tourism Industry," Journal of Business Ethics, Springer, vol. 124(1), pages 47-66, September.
    10. Judith L. Walls & Pascual Berrone & Phillip H. Phan, 2012. "Corporate governance and environmental performance: is there really a link?," Strategic Management Journal, Wiley Blackwell, vol. 33(8), pages 885-913, August.
    11. James Cordeiro & Manish Tewari, 2015. "Firm Characteristics, Industry Context, and Investor Reactions to Environmental CSR: A Stakeholder Theory Approach," Journal of Business Ethics, Springer, vol. 130(4), pages 833-849, September.
    12. Brodmann, Jennifer & Hossain, Ashrafee & Masum, Abdullah Al & Singhvi, Meghna, 2021. "Chief Executive Officer power and Corporate Sexual Orientation Equality," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    13. Fauver, Larry & McDonald, Michael B. & Taboada, Alvaro G., 2018. "Does it pay to treat employees well? International evidence on the value of employee-friendly culture," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 84-108.
    14. Chen, Jie & Leung, Woon Sau & Evans, Kevin P., 2016. "Are employee-friendly workplaces conducive to innovation?," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 61-79.
    15. Lu, Jing & Wang, Jun, 2021. "Corporate governance, law, culture, environmental performance and CSR disclosure: A global perspective," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 70(C).
    16. Liu, Simeng & Wang, Kun Tracy & Walpola, Sonali, 2023. "Female board representation and the adoption of corporate social responsibility criteria in executive compensation contracts: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).
    17. Wang, Jianrong & Anand, Smriti & Li, Hui & Du, Wei, 2022. "Marriage equality for everyone? The business case for same sex marriage legislation," Journal of Business Research, Elsevier, vol. 148(C), pages 190-202.
    18. Bell, Myrtle P. & Özbilgin, Mustafa F. & Beauregard, T. Alexandra & Sürgevil, Olca, 2011. "Voice, silence, and diversity in 21st century organizations: strategies for inclusion of gay, lesbian, bisexual, and transgender employees," LSE Research Online Documents on Economics 32094, London School of Economics and Political Science, LSE Library.
    19. An, Heng & Chen, Carl R. & Wu, Qun & Zhang, Ting, 2021. "Corporate Innovation: Do Diverse Boards Help?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(1), pages 155-182, February.
    20. Dima Jamali, 2008. "A Stakeholder Approach to Corporate Social Responsibility: A Fresh Perspective into Theory and Practice," Journal of Business Ethics, Springer, vol. 82(1), pages 213-231, September.
    21. Mohammed Hossain & Muhammad Atif & Ammad Ahmed & Lokman Mia, 2020. "Do LGBT Workplace Diversity Policies Create Value for Firms?," Journal of Business Ethics, Springer, vol. 167(4), pages 775-791, December.
    22. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
    23. Mohsni, Sana & Otchere, Isaac & Shahriar, Saquib, 2021. "Board gender diversity, firm performance and risk-taking in developing countries: The moderating effect of culture," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).
    24. Sharma, Amalesh & Moses, Aditya Christopher & Borah, Sourav Bikash & Adhikary, Anirban, 2020. "Investigating the impact of workforce racial diversity on the organizational corporate social responsibility performance: An institutional logics perspective," Journal of Business Research, Elsevier, vol. 107(C), pages 138-152.
    25. Luu, Trong Tuan & Rowley, Chris & Vo, Thanh Thao, 2019. "Addressing employee diversity to foster their work engagement," Journal of Business Research, Elsevier, vol. 95(C), pages 303-315.
    26. Sivathaasan Nadarajah & Muhammad Atif & Ammar Ali Gull, 2022. "State-Level Culture and Workplace Diversity Policies: Evidence from US Firms," Journal of Business Ethics, Springer, vol. 177(2), pages 443-462, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fatmy, Veda & Sihvonen, Jukka & Vähämaa, Sami, 2025. "LGBTQ-friendly employee policies and corporate innovation," International Review of Financial Analysis, Elsevier, vol. 105(C).
    2. Tarcia Camily Cavalcante Quezado & Nuno Fortes & William Quezado Figueiredo Cavalcante, 2022. "The Influence of Corporate Social Responsibility and Business Ethics on Brand Fidelity: The Importance of Brand Love and Brand Attitude," Sustainability, MDPI, vol. 14(5), pages 1-20, March.
    3. Korkmaz, Aslihan Gizem & Ucar, Erdem, 2025. "Social injustice and corporate innovation," The Quarterly Review of Economics and Finance, Elsevier, vol. 101(C).
    4. Ashrafee Tanvir Hossain & Amir Hossain & Tom Cooper & Majidul Islam, 2024. "Corporate sexual orientation equality and carbon emission," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(2), pages 1491-1524, June.
    5. Hossain, Ashrafee & Rjiba, Hatem & Saadi, Samir, 2022. "Judge Ideology and Corporate Sexual Orientation Equality," Finance Research Letters, Elsevier, vol. 49(C).
    6. Matteo Cotugno & Greta Benedetta Ferilli & Egidio Palmieri, 2026. "Does Board Gender Diversity Make Firms Less Greenwashed?," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 35(1), pages 479-500, January.
    7. Wen‐Min Lu & Qian Long Kweh & Oyunerdene Dashnyam, 2024. "Environmental, social, and governance, firm performance and the moderating role of power distance cultural value during the COVID‐19 pandemic," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 8300-8318, December.
    8. Marco Ghitti & Gianfranco Gianfrate & Lorenza Palma, 2024. "The agency of greenwashing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(3), pages 905-941, September.
    9. Beloskar, Ved Dilip & Haldar, Arunima & Gupta, Anupama, 2024. "Gender equality and women’s empowerment: A bibliometric review of the literature on SDG 5 through the management lens," Journal of Business Research, Elsevier, vol. 172(C).
    10. Mehta, Nikhil & Mehta, Anju & Hassan, Yusuf & Buttner, Holly & RoyChowdhury, Sanchita, 2021. "Choices in CDO appointment and firm performance: Moving towards a Stakeholder-based approach," Journal of Business Research, Elsevier, vol. 134(C), pages 233-251.
    11. Yiqiang Zhou & Lianghua Chen & Yan Zhang & Wan Li, 2024. "“Environmental disclosure greenwashing” and corporate value: The premium effect and premium devalue of environmental information," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2424-2438, May.
    12. Chowdhury, Hasibul & Hossain, Ashrafee & Masum, Abdullah-Al & Zheng, Jiayi, 2023. "Does corporate sexual orientation equality affect labor investment efficiency?," Global Finance Journal, Elsevier, vol. 55(C).
    13. Hasan, Mostafa Monzur & Cheung, Adrian (Wai Kong) & Marwick, Trevor, 2022. "Corporate sexual orientation equality policies and the cost of equity capital," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    14. Pedro Torres, 2024. "Configurations of corporate governance mechanisms and sustainable development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2900-2909, July.
    15. Ylinen, Mika & Ranta, Mikko, 2025. "Predicting corporate innovation using machine learning and social media data," Technovation, Elsevier, vol. 148(C).
    16. Estévez-Mendoza, Carlos & Montoro-Sánchez, Ángeles, 2024. "Exploring the relationship between innovation and corporate governance," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    17. Ali Uyar & Habiba Al-Shaer & Cemil Kuzey & Abdullah S. Karaman, 2026. "Board characteristics and aggressive CSR engagement: Do CSR committees provoke or restrain?," Review of Quantitative Finance and Accounting, Springer, vol. 66(1), pages 269-311, January.
    18. Sana Ben Abdallah & Dhafer Saidane & Sami Ben Mim, 2024. "The impact of governance on environmental performance: evidence from African countries," Economics Bulletin, AccessEcon, vol. 44(1), pages 122-139.
    19. Yu Wang & Yetaotao Qiu & Yi Luo, 2022. "CEO foreign experience and corporate sustainable development: Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2036-2051, July.
    20. Kirsten Burkhardt & Pascal Nguyen & Evelyne Poincelot, 2020. "Agents of change: Women in top management and corporate environmental performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1591-1604, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:34:y:2025:i:8:p:10785-10802. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.