For the fourth consecutive year, the State LGBTQ+ Business Climate Index has recorded a national decline in support for the LGBTQ+ community in the business environment among various states.
Designed as a tool for business leaders in their decision-making processes regarding development and investment, the Index is a valuable resource for current and prospective LGBTQ+ business owners and potential employees.
The company you work for is just as important a decision as where to do business.
The report is produced by OutLeadership, an organization that works with senior business executives and multi-national companies to improve LGBTQ+ equality in corporate culture.
Several indicators are used in arriving at state rankings. The 2026 Index was expanded to include 12 new categories, including: bathroom/facility access laws, library and book access, drag performance restrictions, transgender sports participation, pronoun and name usage rights, and adult gender-affirming care access.
OutLeadership points to several societal shifts that account for the decline.
These shifts include the growing number of anti-LGBTQ+ legislative efforts in numerous states, including in both Carolinas, and recent decisions by various courts, including SCOTUS.
According to OutLeadership CEO Todd Sears, “The gap between inclusive and hostile states is wider than it has ever been, and it is still widening.”
States with the best-performing scores on the index are: Massachusetts, New York, Connecticut, New Jersey and Illinois.
Those with the lowest rankings are: Arkansas, Tennessee, Idaho, South Carolina and Florida.
South Carolina ranked 47th, while Tennessee was ranked 49th.
North Carolina moved up in rankings slightly, at 27th.
The effect of the growing number of anti-gay legislative initiatives has a hidden economic impact: according to a 2023 report appearing in Cochrane Evidence Synthesis and Methods, “Lesbian, gay, bisexual, and transgender (LGBT) employees have increasingly reported experiencing different forms of workplace discrimination/harassment. Workplace allyship may be positively associated with psychological health through creating inclusive organizational cultures or reducing discrimination/harassment.”
Seventy-six percent of Gen Z workers indicate they will avoid taking jobs in anti-equality states, according to the Index, and 89 percent of millennial job-seekers place a high priority on a company offering LGBTQ+-inclusive healthcare policies. Seventy-five percent of LGBTQ+ or “ally” consumers say they boycott anti-equality brands.
The National LGBT Chamber of Commerce (NGLCC) has become the largest advocacy organization in the country seeking to improve the LGBTQ+ business climate.
Two business-related organizations serve the same purpose in the Carolinas.
The Carolinas LGBT+ Chamber of Commerce is active in both North and South Carolina with hundreds of professional members and 45 major corporate or civic partners, including American Airlines and Bank of America.
The report estimates approximately 4.4 percent of North Carolina residents self-identify as LGBTQ+, representing a personal income of $16 billion, a market that cannot be ignored.
The Upstate SC LGBT+ Chamber of Commerce brings together more than 250 varied individuals and businesses, including GE Vernova and TD Bank.
Both organizations are affiliated with the National group, however, neither state has nondiscrimination protections with respect to sexual orientation or gender identity in the important areas of housing, public accommodations, private employment or financial resources.
Work environments and corporate cultures that are hostile to LGBTQ+ employees can cost companies in terms of talent and dollars lost by turnover.
According to a 2024 article in the Advocate, “Anti-LGBTQ+ legislation is altering the experience of LGBTQ+ people and allies in the workplace. Businesses are at risk of brain drain and talent loss. In addition, there is a significant economic impact: US businesses lose approximately $1 trillion every year due to voluntary employee turnover. Replacing an individual employee can cost up to two times their annual salary.”
However, just as hostile environments can cost a company unnecessarily, providing a positive, affirming and protective environment can enhance growth and economic development on a corporate and societal level.
“Companies that lead on LGBTQ+ inclusion will win talent, trust, and long-term growth. Those that don’t face mounting reputational and operational risk,” according to OutLeadership.
In the ongoing struggle for LGBTQ+ equality, the report says, “Neutrality is no longer an option. Business must lead.”
