Morningstar launches LGBTQ+ index of top 100 inclusive companies
Morningstar debuted its Developed Markets LGBTQ+ Leaders index on Tuesday, giving investors a much-needed tool to screen for diversity and inclusion in their portfolios.
The new index is designed to deliver exposure to 100 large and midcap companies demonstrating strong LGBTQ+ inclusive policies and practices from a diverse range of regions and sectors, Morningstar said.
“While there are a number of broad socially focused indexes available in the market today, few options focus on sexual orientation or gender identity,” said Rob Edwards, global director of ESG product management, Morningstar Indexes, in a release announcing the launch.
“In developing the Morningstar Developed Markets LGBTQ+ Leaders Index, our objective was to bring greater transparency to LGBTQ+ practices and policies in the workplace and how companies are incorporating these approaches into their strategy,” he said.
The new offering adds to Morningstar’s MORN growing list of socially focused indexes, which currently includes the Morningstar Minority Empowerment Index, Gender Diversity Index and Women’s Empowerment Index.
The LGBTQ+ Leaders Index relies on data from Morningstar Sustainalytics and ExecuPride, a socially focused enterprise that harnesses data science to monitor company advancements in LGBTQ+ inclusion.
“Our new index fulfills a market need by enabling investors to tap into global companies with leading LGBTQ+ policies to pursue their investment objectives, whether for values alignment, or to pursue investment opportunity, or a combination,” said Ron Bundy, president, Morningstar Indexes and Morningstar Sustainalytics.
Companies are first screened for controversial product involvement, UN Global Compact compliance, and severe ESG controversies using Morningstar Sustainalytics ESG data and research and are then ranked by ExecuPride score and size. The 100 companies with the highest ExecuPride scores from across regions and sectors are selected for membership.
Companies near the top of the ExecuPride Assessment Scale, which also represent the top holdings within the index, have demonstrated direct evidence of DEI policies, initiatives and support structures as well as a prominence of LGBTQ+ representation and advocacy at the leadership level, Morningstar said.
Here are five of the top holdings represented in the index:
Read more: How to craft an investment portfolio that supports LGBTQ+ equality
Read Next
