Rainbows and Ratings: Assessing indices of LGBTQ+ inclusivity in the Japanese workplace

ABSTRACT

With a growing global interest in environmental, social and governance (ESG) policies, ESG indices and ratings have gained significant influence, but have also come under increasing academic scrutiny as to their validity. As part of this development, LGBTQ+ indices and pledges have also grown in popularity to signal the LGBTQ± friendliness of companies worldwide. This article begins by discussing the overall state of LGBTQ+ employees in the Japanese workplace and addresses to what extent Japanese LGBTQ+ indices can help to assess inclusive work environments. After proposing a novel framework to evaluate the components behind such indices, we apply it to two Japanese LGBTQ± friendliness indices, namely the PRIDE Index and the D&I Award. We find that both LGBTQ+ indices show potential to assess the degree of LGBTQ+ inclusive policy measures. At the same time, they still have weaknesses and leave room for misuse. Yet, these indices have a much stronger validity than other LGBTQ± friendliness markers used in Japan, such as the widely popular United Nations Sustainable Development Goals (SDGs). These findings are not only a timely contribution to the academic literature on the validity of ESG indicators, but they are also relevant to the LGBTQ+ community in Japan, as the newly enacted LGBTQ+ Understanding Law in 2023 lacks effective anti-discrimination measures.

KEYWORDS:

• LGBTQ+
• diversity
• inclusion
• Japan
• index
• ESG

Introduction

The global movement for lesbian, gay, bisexual, transgender, and queer (LGBTQ+¹) rights has gained momentum in recent years. More and more countries are recognising same-sex marriages and considering legislation aimed at the inclusion of LGBTQ+ people in all aspects of society. In this climate, indices of Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) policies have proliferated around the world. Companies appear increasingly interested in responding to these new social demands in their working environment. In Japan, for example, the convenience store chain FamilyMart has reformed its benefits system to grant same-sex partners the same benefits as legal spouses (FamilyMart 2023b), while the department store operator MaruiGroup has since 2016 been conducting LGBTQ+ trainings for its employees and created a website dedicated to employees of different gender identities, backgrounds, and disabilities (MaruiGroup 2023).

In the wake of these developments, specific indices of LGBTQ+ inclusion at private sector companies, offered by organisations such as the UK’s Stonewall Workplace Equality Index (WEI) or the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI), have also gained traction (Fletcher and Everly 2021; Sears and Mallory 2011; Webster et al. 2018). For example, as of 2019, over 91% of Fortune 500 companies² had included gender identity protection policies in their code of conduct (Human Rights Campaign Foundation 2022).

Research on LGBTQ+ issues has repeatedly shown that reducing discrimination in the workplace and employing more individuals that identify as LGBTQ+ benefits not only companies in terms of innovation, creativity, diversification of consumer groups, increased job satisfaction, and reduced stress levels of employees, but ultimately supports and empowers LGBTQ+ communities (Chintrakarn et al. 2020; Hossain et al. 2020; Kato and Kodama 2017; Pichler et al. 2017; Sears and Mallory 2011). By providing a safe working environment, companies open doors to groups that have traditionally been marginalised or denied opportunities due to societal discrimination.

Increasing the pool of potential employees and improving their working conditions is of utmost importance for Japan, a country currently facing a challenging decline in its labour force due to a rapidly aging population. So far, Japan is making little use of diverse groups of employees and has a rather weak track record in diversity management. Historically, Japanese companies have understood diversity primarily as a diversity of employment forms with a focus on the dichotomy between regular and non-regular workers (Conrad and Meyer-Ohle 2022). Employment opportunities for women and foreigners have improved in recent years, but the accommodation of these groups remains highly instrumental, with only minimal changes to established work practices in largely homogenous, Japanese male-dominated work cultures (Conrad and Meyer-Ohle 2022; Nemoto 2013). Other issues regarding diversity, often also referred to as SOGI (Sexual Orientation and Gender Identity), have only slowly been acknowledged.

Yet, mirroring global trends, we can observe that private organisations in Japan have also started to develop indices to assess Japanese companies’ LGBTQ± friendliness and practices to indicate a safe and inclusive work environment. By 2022, more than 60% of all Fortune Global 500 and Forbes 2000 companies in Japan had either included the PRIDE Index of the Japanese non-profit organisation Work with Pride (WWP) or the SDGs (which are connected to LGBTQ+ issues, too) in their website communications to signal their commitment for and engagement with the LGBTQ+ movement.

Yet, just as the validity of broader CSR and ESG indices and ratings has come under greater academic and public scrutiny amid accusations of environmental “greenwashing” due to imprecise measures (Morimoto, Ash, and Hope 2005; Berg, Kölbel and Rigobon 2022), so have LGBTQ+ indices been questioned as to whether they truly reflect LGBTQ±-friendly policies (Ng et al. 2021) or are prone to misuse in what has been termed “rainbow-washing” (Mitchell and Ward 2010). Rainbow-washing refers to the inclusion of LGBTQ+ symbols within a company to signal solely performative support “in an effort to make profits, rather than […] to produce change in society” (Champlin and Li 2020, 3). In Japan, the term rainbow-washing has started to be used, for example, in the context of the Tokyo Pride Parade, where just like in other countries, observers have questioned whether participating companies truly and holistically subscribe to and support LGBTQ± friendliness in all their business activities (Joplin 2023). Ultimately, since any LGBTQ+ action with a profit motive could be rightly or wrongly criticised as rainbow-washing, it seems necessary to apply a narrower understanding of the term in order to draw meaningful conclusions.

In the context of this study, we thus ask how well popular Japanese LGBTQ+ indices used by companies in Japan capture the different dimensions of LGBTQ± friendliness in the workplace, and whether limitations of their components or weighting procedures potentially allow misuse to merely signal a friendly workplace environment. By scrutinising two Japanese indices (the PRIDE Index and the Diversity & Inclusion Award (D&I Award)) that have gained some popularity as a symbol of diversity in Japan, our article makes two contributions to the literature of Human Resource Management and LGBTQ+ studies, while also being of practical relevance for LGBTQ+ workers in Japan.

First, we advance the critical literature on ESG metrics and LGBTQ+ indices. In the absence of a standard framework for studying LGBTQ+ indices, we create our own analytical framework that is based on recent psychological research by Fletcher and Everly (2021). While Fletcher and Everly’s framework deals with the outcomes of LGBTQ+ policies, we use it to assess the usefulness of input components behind LGBTQ+ indices.

Second, we contribute to the still limited literature on LGBTQ+ issues in Japan and show that while the new LGBTQ+ indices reflect developments in Europe and the United States, their usefulness is still somewhat limited. The indices include solely input-oriented measures and do not assess outcomes in terms of the actual working realities of LGBTQ+ people in companies that have been awarded these indices. Companies could thus be awarded the indices without actually having LGBTQ+-friendly working environments, which could be connected to rainbow-washing. As we discuss below, to mitigate this, the assessed companies could be required to conduct mandatory anonymous surveys among their employees to measure the impact of policies on work practices and climate.

While the indices have clear limitations and there are currently no plans for an effective anti-discrimination legislation in Japan, the LGBTQ+ indices are among the more reliable Japanese sources offering insights into suitable and presumably safe workplaces. To delve deeper into these issues, our article is structured as follows. After reviewing the literature on LGBTQ+ inclusion in the workplace in general and the related literature on Japan in particular, we discuss the problem of assessing LGBTQ± friendliness by indices and propose a method to evaluate the validity of the components behind such indices with reference to the psychology literature. We then apply this method to the PRIDE Index and the D&I Award and discuss our findings and limitations, before closing with a short conclusion.

LGBTQ+ employees and the workplace

In recent years, several European and US studies have focussed on LGBTQ+ inclusion in terms of the advancement of corporate policies and working conditions. In line with a large body of literature that has propagated the “value-in-diversity perspective” (Herring 2009) or the “business case for diversity” (Noon 2007), studies highlight the positive relationship between LGBTQ+ inclusion and firm value, firm performance, and innovation (Chintrakarn et al. 2020; Herring 2009; Hossain et al. 2020; Pichler et al. 2017). Badgett et al. (2013) emphasise that diversifying the workforce allows access to new consumer groups and market sectors and note that implementing LGBTQ±-friendly policies reduces the risk of legal costs arising from discrimination-related disputes. Yet, there are also studies that show that the “business case” for LGBTQ+ employees is not necessarily straightforward due to societal stigma. For example, Parshakov et al. (2022) find that advertising LGBTQ±-friendly characters in video games can have a negative impact on the popularity of the games and leads to a decrease in demand. While there might thus be negative repercussions for business, Hossain et al. conclude that “for many leading businesses, it is a strategic imperative to create a culture of inclusion and diversity that extends to LGBT [sic.] people: They know that it correlates to greater individual performance and ultimately, stronger business performance” (2020, 777).

Despite the largely positive “business case for diversity”, stigma against LGBTQ+ people at workplaces around the world remains prevalent. Some employers tend to use a person’s non-heterosexual identity as a reason for unfair treatment in terms of employment contracts, limited job mobility and pay, and might impose an overall hostile work climate on LGBTQ+ employees (Lee and Ostergard 2017). To counter such actions, and against the backdrop of a lively societal discourse on LGBTQ+ inclusion, some organisations seek to manage sexual and gender identities in the workplace by empowering “voices”³ and fostering “a sense of inclusion” (Di Marco, Hoel, and Lewis 2021, 2).

Within the CSR and ESG nexus, companies are grappling with how to implement new CSR and ESG strategies and effectively include LGBTQ+ individuals in the workplace. According to Webster et al.’s (2018) meta-analysis of the research literature on LGBTQ+ inclusion, companies have responded to LGTBQ+ discrimination primarily in three areas: Formal policies and practices to signal a company’s commitment to eliminating discrimination and mistreatment, “LGBT [sic.]-supportive work climates” to examine the implementation of values and behaviours perceived by employees, and supportive workplace relationships that focus on relationships between employees to create a “welcoming space through social support” (Webster et al. 2018, 196). According to Moran and Volkwein (1992) and Von Treuer and McMurray (2012), work climate encompasses the behavioural aspects between participants of a workplace or organisation and reflects the norms, values, and attitudes of the overall workplace culture. This culture, in turn, is defined as an “implicit feature of organisations”, consisting of collective values and meanings shared within the organisation (Moran and Volkwein 1992, 42).

As for the situation of LGBTQ+ communities in Japan, several scholars have identified a strong anti-LGBTQ+ sentiment within Japanese society (McLelland 2009; Tamagawa 2018). Although the earliest accounts of non-heteronormative sexuality can be traced back to the early Edo period, LGBTQ+ awareness has only increased since the “gay boom” of the 1990s (McLelland and Suganuma 2009; Shimizu 2007; Sunagawa 2006). This was also triggered by the AIDS/HIV crisis of the early 1980s and eventually led to broader media coverage that also addressed LGBTQ+ life in Japan. Since 2010, issues affecting the LGBTQ+ community have become increasingly prominent in societal and political discourses in Japan. This heightened visibility has been catalysed, in part, by the disclosure of queer sexual orientation by public officials (Frühstück 2020, 77–78). In addition, the major milestone of the legalisation of same-sex marriage in the US in 2015 has reverberated globally and prompted local responses, including the recognition of civil partnerships in selected districts of Tokyo (Fotache 2019). Taken together, these developments have not only contributed to the awareness of LGBTQ+ issues, but also brought a sense of urgency to the plight of LGBTQ+ people in the Japanese context (Fotache 2019). In the broader public, knowledge of the term “LGBT” increased from 37.6% in 2015 to 68.5% in 2018 in a large-scale survey by Dentsu (May 28, 2019, 3). However, as many researchers have noted, LGBTQ+ inclusion in Japan today still faces many obstacles, mainly due to the rigid, heteronormative organisation of the family unit, such as the male breadwinner model, and a culture of silence around sexual orientation and gender identity (Anderson 2019; Frühstück 2020; Macnaughtan 2015). According to an OECD (2020) report on “LGBTI”, Japan is one of the OECD countries with the lowest legal standards for LGBTQ+ equality and has seen the least development in this area over the past 20 years.

For example, the “Act on Equal Opportunities and Treatment of Men and Women in Employment” (1972, last amended in 2006) aims to ensure equal treatment and equal opportunities for all genders but is based on only a binary concept of gender, which in fact excludes all other genders. Another example can be seen in the amendment of the sexual harassment guidelines by the Japanese Ministry of Health, Labour and Welfare of Japan in 2017, which recognised for the first time that “sexual harassment can occur irrespective of sexual orientation or gender identity and […] can occur between people of the same sex” (Stonewall 2018, 1). However, the mere recognition of LGBTQ+ individuals does not lead to less discrimination. For example, transgender people or being “trans” is still considered a so-called “gender identity disorder”, which leads to social isolation and thus affects the likelihood of getting a job (Nijiiro Diversity, and Center for Gender Studies, International Christian University 2015, 19).

While many countries have introduced basic anti-discrimination and partnership laws, Taniguchi has repeatedly highlighted the lack of commitment of Japanese legislators in this area (2006; 2020). Reasons for this slow process can be found in the LDP government’s argument that there is “[…] insufficient understanding in the Japanese society of SOGI [Sexual Orientation and Gender Identity] to warrant implementing such measures, and doing so may have the opposite effect, fostering unintended discrimination and thereby further isolating sexual minorities” (Kazama 2020, 46). The promotion of this “understanding” was implemented in the passing of the new LGBTQ+ law in June 2023. However, many newspapers have called it a “watered-down” version of what could have been an effective legal protection for LGBTQ+ individuals (Lies 2023).

While research on Japanese LGBTQ+ issues has developed into a broader academic field covering social, legal, political, and multimedia dimensions, research in management studies and human resource management is relatively scarce. Yanagi (2020), based on survey data from large Japanese companies from 2014 to 2018, finds that measures related to sexual orientation have rapidly been introduced since 2014. The principal measure is diversity training, but transgender inclusion measures, in-house compliance consulting, benefits for same-sex partners and employment process measures have also increasingly been adopted. Hayashi (2017) shows that both the percentage of foreign share ownership and company size correlate positively with the adoption of LGBTQ+ policies by Japanese companies. Anderson’s (2019) small scale qualitative study shows that LGBTQ+ employees continue to face discrimination and prejudice in the workplace and are less likely to come out or seek support, even if such support is available. Dehars and Iskandar (2020) show that companies are increasingly willing to create inclusive work environments due to the general recognition of LGBTQ+ people, but these ambitions often clash with public opinion about LGBTQ+ individuals in Japan (2020, 290).

Considering these challenges, LGBTQ+ employees are often found in non-regular positions with low to medium income, frequently leading to precarious life courses, similar to the situation in the US and Europe (Nijiiro Diversity, and Center for Gender Studies, International Christian University 2015, 15). While companies currently develop more inclusive policies for their employees, sexual minorities report “people’s lack of understanding about their situation […] [that] resulted in them being subject to harassment” (Japan Times 2020). At the same time, we see an increased trend of LGBTQ+ diversity trainings and programmes that try to raise awareness for LGBTQ+ issues (Japan Times 2020). As is the case globally, private companies and LGBTQ+ activists in Japan have developed indices for labour-related issues as indicators of LGBTQ± friendliness and inclusion in companies. Yet, although indices can be sources of information about the state of a particular issue, given the prevailing challenge of a “lack of understanding” in Japanese society and among Japanese lawmakers, these indices may be particularly vulnerable to misuse and rainbow-washing, and therefore deserve closer scrutiny.

Methodology

According to the Oxford English Dictionary, an index is a sign, token, or indication of something. Indices often produce a composite measure that summarises certain responses to a given set of questions. Whether such a composite measure reflects a phenomenon well depends on several issues, including the validity of the questions and whether and how responses might be weighted. Indices are inherently assessments that appear objective, but which are based on normative pre-selections. While indices are thus not a panacea for assessing complex realities, they can offer potentially valuable information by condensing complex information into easily comprehensible indicators. Research focused on assessing companies’ commitment to ESG or CSR, and the resulting ratings, has highlighted the ongoing challenge of identifying valid and reliable indicators that form the basis of institutional ratings and indices (Chatterji, Levine, and Toffel 2009; Chatterji et al. 2016; Berg, Kölbel, and Rigobon 2022).

For example, Berg, Kölbel and Rigobon (2022) find a significant divergence of ESG ratings by different rating providers and link it to three distinct sources, namely ratings being based on different sets of attributes (scope divergence), the measuring of the same attribute using different indicators (measurement divergence), and different views on the relative importance of attributes (weight divergence). Overall, they call for more research on how the data underlying ESG ratings are generated. ESG ratings are a composite of indicators that can be categorised as inputs and outcomes. Inputs are the efforts that companies make to achieve desired results, such as specific policies, while outcomes refer to the actual, measurable results of those policies, for example through employee surveys (Christensen, Serafeim, and Sikochi 2022). Assessing LGBTQ+ inclusivity thus requires a rigorous examination of the specific sets of indicators that underlie indices or ratings.

The field of diversity and inclusion indices is currently characterised by numerous differing indices worldwide that make a direct comparison difficult. Even in the relatively narrow field of LGBTQ+ indices, Crehan et al. (2021) – in a handbook on inclusion and diversity indices that does not have a single mention of Japan – identify more than a dozen indices worldwide of which they compare five indices in depth. Based on this comparison, they conclude that the oldest and most established indices, namely the US’ Human Rights Campaign’s CEI and the UK’s Stonewall WEI offer a wide array of components and influence the development of other indices in the world. However, even the established indices continue to evolve and are often limited in being open about the precise way that they measure inclusivity (Crehan et al. 2021, 231–32; Ng et al. 2021, 1). The HRC, for example, was developed in the context of US state and federal legislation, making its validity more country-specific (Crehan et al. 2021, 246). In short, there is no single global benchmark that could or should be applied without question. Furthermore, a crucial issue is whether and to what extent ESG and LGBTQ+ indices aim to capture both inputs (e.g. policies) and outcomes (e.g. improvement of employee well-being). As we will discuss further below, the Japanese indices that we scrutinise in this article currently include only input measures. However, rather than simply applying input measures that might or might not be of actual relevance for LGBTQ+ inclusion, we propose a benchmarking process to use only such items that the recent psychology literature has demonstrated to be relevant to LGBTQ+ employees on an outcome level.

With regards to outcomes, the LGBTCI (Lesbian, Gay, Bisexual, Trans Climate Inventory) of Liddle et al. (2004) is a widely used scale to document workplace climate for LGBTQ+ employees, but its scoring method has been criticised for not accurately capturing experiences of support and hostility (Holman et al. 2019, 548). Addressing such weaknesses, Fletcher and Everly’s (2021) work on employees’ perceptions of LGBTQ+ policies has highlighted the impact of LGBTQ+ inclusive policies on the work environment and has shown that the psychological perception of these practices has a greater impact on individual-level outcomes than the mere presence of a policy. Another important contribution of Fletcher and Everly (2021) is that they integrate into their model not only a wide remit of LGBTQ+ supportive practices (inputs) from the HRC and Stonewall UK indices but they also consider new policy areas from the most recent literature. Starting out with initially 14 practices that enable the participation and inclusion of LGBTQ+ staff, they then refine the model by exploring its content validity to end up with eight robust measures which actually matter in terms of LGBTQ+ support.

While Fletcher and Everly (2021) have developed these items to measure outcomes, we argue that they should also be used to assess input measures, now that their relevance for LGBTQ+ employees’ well-being has firmly been established. For our analysis of the components behind the Japanese LGBTQ+ indices, we thus used the eight questions proposed by Fletcher and Everly as the basis for our own framework. Questions 1 and 7 of their framework consider the existence and implementation of LGBTQ+ policies, practices, strategies, and objectives within overall people management. However, we decided to combine those two into a single category, “anti-discrimination policies and practices”, since strategies and objectives are difficult to assess as input factor components. We also merged questions 5 and 8 into one category as both questions consider the management level of company practices. Table 1 shows the resulting six categories of our framework that we later apply to evaluate whether the Japanese indices use sensible components to assess LGBTQ± friendliness. These categories are anti-discrimination policies and practices, diversity and inclusion trainings related to sex and gender, benefits for heterosexual/same-sex and LGBTQ+ employees, voice and representation through trade unions or work councils, actions taken by a company’s leadership to promote LGBTQ+ inclusion inside and outside of the company, and inclusive corporate communications.

Table 1. Evaluation categories applied to the Japanese LGBTQ+ indices.

Questions in Fletcher & Everly (2021)	Category	Category for evaluation in this article:
“[…] [has] adequate anti-discrimination policies and practices covering LGBT employees.”	1 (& 7)	Anti-discrimination policies and practices (considering diversity and inclusion, including sexual orientation and gender identity, within overall people management strategies and objectives)
“[…] considers diversity and inclusion, including sexual orientation and gender identity, within overall people management strategies and objectives.”
“[…] provides adequate diversity and inclusion training that includes sexual orientation and gender identity.”	2	Diversity and inclusionary training regarding sexual orientation and gender identity
“[…] provides appropriate benefits such as health insurance, pension, and parental leave policies to same-sex domestic partners.”	3	Benefits such as health insurance, pension, and parental leave policies to same-sex domestic partners
“[…] provides suitable voice and participation for LGBT employees through trade union/work council/staff groups.”	4	Trade union/work council and staff groups that allow participation of LGBTQ+ employees
“[…] provides appropriate support and guidance to managers so they can provide support to LGBT employees.”	5 (& 8)	Management-level programmes that focus on providing suitable work surroundings for LGBTQ+ employees
“Top management […] are supportive of diversity and inclusion initiatives, particularly those affecting LGBT employees”
“[…] incorporates LGBT inclusive language and marketing in corporate communications.”	6	LGBTQ+ inclusive language and marketing in corporate communications

Source: The authors.

Note: The table shows the questionnaire statements of Fletcher and Everly (2021, 496) and how we have combined them to derive at the assessment categories that are later applied to the LGBTQ+ indices.

As the next step, we downloaded publicly available information on the categories and questionnaires of the Japanese indices for our assessment. After translating this information into English, we mapped the components from these questionnaires to the corresponding categories of our framework. Table 2 presents the results of the mapping process, indicating that both Japanese indices utilise components that reflect the significant categories of our framework. However, they also incorporate additional components that extend beyond these categories.

Table 2. Comparison of our evaluation categories and the LGBTQ+ components behind the PRIDE Index and the D&I Award.

Categories derived from Fletcher & Everly (2021)	PRIDE Index	D&I Award
Anti-discrimination policies and practices, that also consider diversity and inclusion, including sexual orientation and gender identity, within overall people management strategies and objectives	The company has a clearly stated policy on LGBTQ+ or SOGI (e.g. non-discrimination) that is widely publicised outside the company, e.g. on the internet	Has a provision which prohibits discrimination based on sexual orientation and gender identity
	The company policy includes the terms sexual orientation and gender identity	Has conduct guidelines for LGBT inclusion. For example, it calls attention to the issues of harassment and discrimination against LGBT employees and clients
	The company policy includes gender expressions	Respects employees’ preferred pronouns and allows them to use their preferred names, or willing to allow it if there is a request from a transgender/non-binary employee. e.g.) Using preferred name on their employee ID card, in both casual and formal settings except for official procedures where their legal name is required
	The company has a policy on the behaviour it expects from its business partners (publicly available) (e.g. procurement code)	Ensures a hiring process is inclusive for LGBT candidates. e.g.) Making gender options on an application form inclusive, not discriminating candidates based on their gender identity and/or sexual orientation, and using the same selection criteria for both LGBT and non-LGBT candidates in hiring
	The company has a policy on its approach to customers and suppliers (publicly available)
	The company has a policy regarding the recruitment of students and applicants (publicly available outside the company)
	The company allows employees to use a name based on the sex with which they identify
	The company allows the person’s preferred gender to be indicated on the employment application form, has a gender field with responses other than male or female, such as “other” or “not applicable”, or does not require the person to indicate his or her gender
	Guidelines are available on counselling services and internal procedures for gender transition and changes to family registers
	The company provides infrastructure, such as unisex toilets and changing rooms
	The company allows individuals to choose the gender they wish to be (e.g. employee ID cards, medical examinations, changing rooms, etc.)
	The company has a system in place whereby the HR department, the department to which the employee belongs, relevant departments, etc. work together to consider how to respond to a request from a transgender or non-binary employee to work in the gender of their choice
	The company has a risk response system for assignments and business travel to countries where homosexuality or cross-dressing is a criminal offence
	The company has a flexible method of application that allows the person to choose the level of disclosure he/she wishes, e.g. the ability to apply without being known to those around him/her
	All policies regarding LGBTQ+ will be established as an attitude towards employees (publicly available outside the company)
Diversity and inclusionary training regarding sexual orientation and gender identity	The company provides LGBTQ+ training for all employees	All employees have already completed LGBT inclusion training programs and study sessions
	The company provides LGBTQ+ training for interviewers, recruiters and hiring managers*	HR personnel staff have already completed LGBT inclusion training programs and attended study sessions*
	The company provides LGBTQ+ training for managers and management*	Managers and Executives have already completed LGBT inclusion training programs and attended study sessions*
	The company provides LGBTQ+ training for new and mid-career employees at the time of employment
	The training includes dealing with coming out
	The training includes exercises such as group work, reading and listening
	The training includes content on non-binary, asexual, intersex, and other non-LGBTQ+ gender diversity
	The training is delivered with a check on the level of understanding within the organisation, for example through post-training questionnaires
	The training includes SOGI harassment
Benefits such as health insurance, pension, and parental leave policies to same-sex domestic partners	The company provides payments for LGBTQ+ employees such as congratulatory gifts, condolence payments, maternity gifts, family allowances, rent subsidies	Recognizes same-sex partnership. e.g.) providing the same spousal and familial benefits of opposite-sex couples to same-sex couples, such as leave benefits and support for nursing care
	The company provides leave payments for LGBTQ+ employees such as marriage, maternity, childcare (including partner’s children), family care, care (including partner and partner’s family)	Supports employees’ sex reassignment surgery or willing to support it if a transgender or non-binary employee requests it. e.g.) transgender/non-binary employees can continue their job during their process of gender reassignment therapy
	Same-sex partners may be designated as beneficiaries of the company’s own survivor’s pension and group life insurance
	Support for continued employment during gender reassignment surgery and hormone treatment (e.g. leave, leave of absence, accommodation for working patterns)
	Access to external social services that can be used by the employee’s preferred gender
	There is a system within the company to provide accommodation, company housing or dormitories for LGBTQ+ employees on business trips or company trips, etc., according to the wishes of the person concerned
	Assistance with the cost of gender reassignment surgery and hormone treatment
	External welfare services are contacted and made available to same-sex partners on the family register
	There are services that treat children of the registered same-sex partner as children of the employee. (e.g. family ship schemes)
	The company offers other benefits such as company housing, family days, family discount, recreational facilities
	The company offers support in cases of transfer to LGBTQ+ employees, e.g. transfer allowance, relocation expenses, secondment leave, language training)
Trade union/work council and staff groups that allow participation of LGBTQ+ employees	Guidance is available in cases where a person has come out about his or her sexual orientation/gender identity and as a result has experienced problems such as inappropriate language or behaviour from superiors or colleagues in the workplace	Consultation service is available for LGBT employees and other employees [because there is an individual or individuals]in charge whom they can turn to
	There is an internal community where employees can exchange views on LGBTQ+ and SOGI issues	Different components depending on company size: −There’s a LGBT+ allies community, or there’s emoployees’ voluntary engagement to create a LGBT-friendly environment in workplace (companies with more than 300 employees) -LGBT+Ally community has been created in your company/organization (companies with less than 300 employees)
	There are internal communities where employees can take the initiative in LGBTQ+ and SOGI related activities (e.g. ERG (Employee Resource Group))
	Efforts are made outside of training to increase the number of allies or strengthen their visiblity. (e.g. encouraging people to identify as allies)
	It has established and made available to the public, both internally and externally, a clearly identified point of contact where parties can seek advice in relation to their sexual orientation or gender identity
	The company participates in joint communities with other companies outside its own group. (e.g. cross-industry communities and networks)
	The existence of LGBTQ+ employees and their opinions and wishes are made available in an anonymous awareness survey (e.g. employee awareness survey, engagement survey, etc.) in a privacy-conscious manner
Management level programmes that focus on the inclusion of providing suitable work surroundings for LGBTQ+ employees	The company communicates its management messages to the outside world	The CEO and/or Top Management delivers their message on LGBT inclusion. For example, the message is posted on a company/organization’s website and mentions LGBT; executive and management members promise that there is no discrimination in workplace
	Training for interviewers, recruiters and hiring managers*	HR personnel staff have already completed LGBT inclusion training programs and attended study sessions*
	Training for managers and management*	Managers and Executives have already completed LGBT inclusion training programs and attended study sessions*
LGBTQ+ inclusive language and marketing in corporate communications	The company distributes items internally that promote the understanding of LGBTQ+ and SOGI employees, such as handbooks, stickers, and lanyards	Raises awareness about LGBT inclusion in the workplace to enhance LGBT education and promote the understanding of LGBT. e.g.) publishing company newsletters on LGBT inclusion, distributing books about LGBT, and organizing LGBT awareness periods.
	The company holds events on LGBTQ+ and SOGI that are open to employees’ families and partners
	Organise non-training events that employees can attend or benefit from. (e.g. film screenings, talks with guests, books on LGBTQ+ and SOGI, etc.)
	Organising and co-hosting events that can be attended by people outside the company to promote society’s understanding of LGBTQ+ and SOGI
	Lobbying and activities on LGBTQ+ and SOGI with other companies in the industry to which the company belongs and with the industry as a whole
	Establish awareness-raising periods and days to promote understanding of LGBTQ+ and SOGI(e.g. Pride Month, Spirit Day, etc.)
	Regular (at least twice a year) internal dissemination of information to promote understanding of LGBTQ+ and SOGI through the intranet, email newsletters and internal newsletters
Metrics specific to the Japanese indices	The company supports activities to promote understanding of LGBTQ+ and SOGI among children and young people (e.g. visiting school classes and providing educational materials)	Openly Supports LGBT community. e.g.) participating in, sponsoring, or donating to LGBT-related events, etc.
	The company realises the relaxation of the requirements of the Gender Identity Disorder Special Law (Business Support for Transgender Law Reform Discussion)	Taking actions as an ally company/organization. e.g.) distribution of rainbow stickers, promoting allyship at seminars, trainings and in newsletters
	The company supports as a legal entity the implementation of LGBTQ+ equality legislation (Declaration of Business Support for LGBT Equality/Business Support for LGBT Equality in Japan)	Emloyees enjoy high degree of freedom in clothings and hairstyle as long as it does not harm their professionalism. (e.g. Transgender employees can choose workwear and have a hairstyle according to their gender identities)
	The company endorses as a legal entity the realisation of marriage equality legislation (Business for Marriage Equality)	Uniforms are not separated between men and women. (If it’s not separated, please answer “yes.”)
	The company sponsors and participates in activities to promote public understanding of LGBTQ+ and SOGI	Accommodates the needs of transgender employees based on their gender identity or willing to accommodate them if there is a request from a transgender/non-binary employee. e.g.) health checkup, changing room, and washroom
	The company encourages employee participation in LGBTQ+ related events outside the company and publicising the events
	The company organises, co-hosts or sponsors job fairs, seminars, and events for LGBTQ+ students and job seekers
	The company supports organisations working to promote public understanding of LGBTQ+ and SOGI through donations and grants
	The systems, programmes, etc. put in place within the company will be made available to the public outside the company
Other		The company/organisation has or has had an employee(s) who is/are out of the closet
		There is or has been a transgender/non-binary employee in your company/organisation

Source: The authors (based on Rainbow 2023b; WWP 2023c).

Note: The components behind the PRIDE Index are only available in Japanese and have been translated into English by the authors. The components of the D&I Award are available in English and are direct citations. Components noted with a star* have been allocated in more than one category by the authors.

While this mapping process shows that the Japanese indices use components in all relevant categories of LGBTQ± friendliness, we will still need to discuss in more detail in the findings section whether these components do really assess relevant measures of LGBTQ± friendliness and whether the resulting indices are thus likely to have a high validity. At the same time, we need to be clear that the Japanese components and indices only capture inputs, and thus we are only in a position to assess the validity of the indices in so far as they measure companies’ input policies and measures. Here, we can assess how the two Japanese indices differ in terms of the set of components that they measure (scope divergence), whether these components are meaningful (measurement divergence) and how the weighting of these components influences the final results of the indices (weight divergence).

Table 3. Companies awarded by the PRIDE Index and the D&I Award in 2023, by industry sector.

Source: The authors (based on the PRIDE report 2023; Rainbow 2023a).

Note: This table is based on the 615 companies that received the PRIDE Index and/or the D&I Award in 2023.

Data selection

To select the indices for assessment along the above framework, we referred to the 2022 Forbes list and the 2022 Fortune Global 500 list which include the largest Japanese companies by annual revenue. We screened all 62 Japanese companies that appear in these lists manually for their use of LGBTQ+ indices in their online presence. 25 of them used the PRIDE Index, such as for example Softbank, Honda, or Mitsubishi, and only 4 used the D&I Award (Nippon Telephone and Telegraph, Softbank, Denso, and Mizuho). Furthermore, the widely popular SDG symbols were used by 13 companies. 27 did not use any symbols at all. We thus chose the PRIDE Index and the D&I Award for our sample. In the following, we present more detailed information on each index.

Table 4. Comparison of companies being awarded both the PRIDE Index and the D&I Award in the years 2022 and 2023.

	D&I Award
PRIDE Index		(Beginner)	Standard	Advanced	Best Workplace
	Bronze		1	1	1 (2)
	Silver		1	3 (3)	9 (7)
	Gold			6 (7)	77 (58)

Source: The authors (based on the Pride report 2022, 2023; Rainbow 2022b, 2023a).

Note: This table is compiled out of the 99 companies in 2023 and 77 companies in 2022 (numbers in brackets) which were found in both lists of awardees of the PRIDE Index and the D&I Award.

PRIDE index

WWP (work with Pride) is a non-profit organisation that supports the promotion and establishment of diversity management in companies and other organisations regarding LGBTQ+ individuals. Since 2012, WWP has been holding annual conferences and started to publish the first-ever Japanese LGBTQ+ index in 2016, called the PRIDE Index. In the beginning, the organisation was jointly established by IBM Japan, the international NGO Human Rights Watch, and the LGBTQ+ advocacy NPO Good Ageing Yells. The NPO Nijiiro Diversity, which is also led and organised by LGBTQ+ people, joined the project until 2017 (WWP 2022).

To be considered for the PRIDE Index, companies must submit the index’s application form and can be awarded gold, silver, or bronze awards, depending on whether they fulfil criteria in the following five categories of LGBTQ+ engagement: policy, representation, inspiration, development, and engagement/empowerment. In each category companies can be awarded one point. A total of 5 points yields a gold award, a total of 4 points a silver award, and a total of 3 points a bronze award. A total of less than three points does not result in an award. To receive a point in a category, companies must have a minimum number of measures in place. However, the number of measures per category and the minimum number of measures to receive a point varies per category. For example, the policy category is assessed by nine measures, of which a minimum of four measures have to be in place to receive a point for this category, while the representation category is assessed by six measures of which three have to be in place to receive a point in this category (WWP 2023c). The PRIDE Index only publicises the award ranking itself (gold, silver, bronze), but does not show in which categories or in which components companies were awarded the respective points. In the last five years, a total of 192 (2019), 233 (2020), 300 (2021), 402 (2022) and 398 (2023) companies were awarded the PRIDE Index (Pride Report 2019, 2020, 2021, 2022, 2023). Of the 398 companies in 2023, 326 were awarded gold, 56 silver and 15 bronze. It is also important to note that companies can claim LGBTQ+ policy measures during the application period in the summer of a given year, even if these measures are only planned and have yet to be introduced, as long as they are in place by the end of the respective calendar year (WWP 2023a, 2023b).

The Diversity and Inclusion Award (D&I Award)

The D&I Award was awarded for the first time in 2021 by the company Rainbow. According to the company’s promotion materials and in contrast to the PRIDE Index, Rainbow aims to assess diversity and inclusion holistically beyond female and LGBTQ+ issues and examines companies in the five categories “gender equality”, “LGBT inclusion”, “disability inclusion”, “intercultural cohesion”, and “support for nursing care and child care”. Each category consists of 20 components and is assessed in the following five areas: “action and policy”, “education and awareness”, “personell [sic.] policy”, “community”, and “work environment and work style” (Rainbow 2023b). For each of the 100 components, a company can receive one point to qualify for the award. In addition, companies have the opportunity to write individual statements that contribute to the qualification. In 2023 a total of 220 companies (group companies counted as one) participated. The company hands out awards called “beginner” (1–20 points),⁴ “standard” (21–60 points), “advanced” (61–80 points), and “best workplace” (81–100 points), the latter being awarded to 69.1% of companies participating in 2023 (Rainbow 2021, 2023d). Additionally, companies that showed exceptional commitment to the LGBTQ+ cause are further invited to a hearing, where they can eventually be awarded a Grand or Semi-Grand D&I Award (up to 15 companies). Since 2022, the D&I Award has developed a Top Inclusive Company (TIC) award that is, in contrast to the usual D&I Award, concerned with positive employee responses to a company’s inclusion measures (Rainbow 2022a). In addition, since 2022 the D&I Award has introduced categories of winners, such as start-ups, small companies, and large companies, with FamilyMart winning the large company category in 2022 and the Marui Group winning in 2023 (Rainbow 2023d).

As mentioned in the introduction, FamilyMart implemented a personnel system in July 2022 that grants same-sex partners the same benefits as legal spouses. Additionally, in March 2023, the franchise requirements for all agreement types were modified to allow same-sex partners to apply for franchises in the same way as legal spouses (FamilyMart 2023b). Furthermore, the company has established network groups for various minorities and holds seminars on LGBTQ+ issues. It also informs employees about diversity through newsletters and has published its own SOGI/LGBTQ+ guide for the workplace. According to the FamilyMart website, the company conducts frequent surveys to evaluate the effectiveness of such policies and to update and advance them accordingly (FamilyMart 2023a). Since 2016, the MaruiGroup has been conducting regular LGBTQ+ trainings for its employees and store suppliers. In total, approximately 5,350 MaruiGroup employees have participated in these trainings (as of August 2020) (MaruiGroup 2020). In addition, the MaruiGroup has created networks to connect employees of different gender identities, backgrounds, and disabilities (MaruiGroup 2023). For this reason, they have developed a dedicated website for such groups on which they inform about their company policies and provide room for their employees to raise awareness of LGBTQ+ issues in the workplace.

As can be seen in Table 3, companies that have received awards come from various industry sectors. The PRIDE Index has mainly awarded companies in the manufacturing and wholesale/retail sectors, while the D&I Award has predominantly awarded companies in the information and communications sector, as well as the service industry.

Assessing LGBTQ± friendliness

Based on Table 2 above, this section discusses and assesses whether the components behind the Japanese LGBTQ+ indices adequately capture input measures of LGBTQ± friendliness and whether or not the resulting indices can thus be considered to be valid indicators of LGBTQ± friendliness.

Anti-discrimination policies and practices (category 1)

Although the pure presence of company policies as such is not sufficient to guarantee a safe workspace, they present an integral part of corporate support structures for sexual minorities (Holman et al. 2019, 547) and can attest to companies’ willingness to commit themselves not to discriminate against sexual orientation or the gender identity of their employees (Button 2001, 17). Looking at our sample, the PRIDE Index and the D&I Award require a company to have written policies for LGBTQ+ employees. While the D&I Award demands “discrimination provisions”, the PRIDE Index reviews those policies in terms of the company’s attitude as well as communication inside and outside the company concerning LGBTQ+ issues. Moreover, the PRIDE Index directly checks whether the words “sexual orientation” or “gender identity” are explicitly included in companies’ policies. In terms of practice, Fletcher and Everly stress the importance of companies incorporating diversity and inclusion, including sexual orientation and gender identity within overall people management strategies and objectives (2021, 496). We can therefore conclude that both indices check for the existence of anti-discrimination policies, but that the PRIDE Index is more fine-grained in its approach and has therefore arguably a higher precision in capturing relevant measures than the D&I Award in this category.

Diversity and inclusionary training (category 2)

The second category deals with training programmes that educate employees about the LGBTQ+ community. As stigmatisation of LGBTQ+ communities often arises from inaccurate and misleading information, training programmes can be a low-threshold educational service that can reduce misconceptions and prejudices, as well as improve the overall interactions among employees (Button 2001; King and Cortina 2010). Therefore, training programmes are part of supportive practices companies can establish to foster LGBTQ+ inclusion (Holman et al. 2019, 547). This is particularly important in the case of Japan, where, as mentioned earlier, the understanding of sexual minorities is still very limited and often results in the harassment of LGBTQ+ employees (Japan Times 2020). As in the first category, the D&I Award only requires HR to conduct diversity training, while the PRIDE Index assesses a company on the content of diversity training, requires group exercises among staff members which contribute to LGBTQ+ knowledge and familiarisation, and reviews the different levels of the company, such as employees, managers, and mid-career employees. Overall, the PRIDE Index shows the best recognition of these aspects with a fine-grained set of components.

Benefits (category 3)

Benefits such as health insurance, pension, and parental leave policies to same-sex domestic partners are key components contributing to the welfare and satisfaction of employees (Fletcher and Everly 2021; Opall 2019). In the absence of legal recognition in Japan, covering non-heterosexual partnerships by benefits and welfare systems contributes to the affirmation and normalisation of LGBTQ+ workers (Opall 2019, 255). Considering the socio-economic situation of many LGBTQ+ individuals, benefit coverage can have a major impact on the financial status of those workers, in particular as transgender persons find themselves increasingly in non-regular employment (e.g. 2018: 43.1%; 2021: 48.3%) (NijiVoice White Paper 2021, 27). While the D&I Award surveys partnership systems in companies with regards to leave and nursing care, the PRIDE Index breaks down these various aspects and tests them separately. It also checks for adequate compensation in cases of marriage, childbirth, childcare, payments for congratulatory gifts, family allowances, rent subsidies, and reviews relocation benefits and housing. Therefore, the PRIDE Index provides a more precise evaluation of category 3.

Trade union/work council and staff groups (category 4)

The fourth category pertains to intra-corporate support institutions and networks for LGBTQ+ employees, including trade unions, counselling services, and exchange groups with fellow queer individuals to create safe spaces. King and Cortina show that “accountability structures” related to diversity committees or other forms of smaller organisations within a company seem to be very effective (2010, 75). The PRIDE Index and the D&I Award examine internal opportunities in terms of the existence of committees, groups, or counselling for queer employees. Both indices consider several factors, such as whether study sessions, counselling and other alliance groups are available. However, none of the indices is concerned with the involvement of trade unions. This might be an oversight as trade unions in Japan have assumed active roles in political and environmental protests in recent years (Kojima 2020, 208).

The management level (category 5)

As the greatest power and authority in a company’s organisation resides naturally at the management level, management enables and strongly influences the work culture towards the inclusion of minority groups. Management strategies and management style are therefore important factors in preventing discrimination in the workplace (Button 2001, 25). While all the other categories obviously cannot exist without management support, it is still important to examine whether management is actively advocating and has knowledge about LGBTQ+ issues, or if a company relies solely on written statements and policy directives. Both the PRIDE Index and the D&I Award examine a company’s management level in terms of active communication and genuine commitment of LGBTQ+ inclusion and support, both to employees and outside of the company. Both indices also assess manager training about LGBTQ+ issues. The only difference between the indices appears to be that the D&I Award requires management to actively communicate its stance against LGBTQ+ discrimination.

Language and marketing in Corporate Communications (category 6)

Inclusive language and marketing within the company are considered by the D&I Award and the PRIDE Index in terms of policy formulation and general understanding of LGBTQ+ issues. Based on the idea that understanding can reduce discriminatory behaviour towards LGBTQ+ people, this aspect seems to be very important. Both indices review awareness training and understanding of discrimination, but only the PRIDE Index reviews the use of discriminatory language towards LGBTQ+ people. However, both indices do not acknowledge the challenges of inclusive language in relation to feminine and masculine words and expressions in Japanese.

Discussion

Our results show that the PRIDE Index and the D&I Award address all our categories and even consider more aspects of the inclusion of LGBTQ+ employees. Based on these findings, we conclude initially that both indices have some validity in assessing a company’s LGBTQ± friendliness. Differences between the D&I Award and the PRIDE Index relate to measurement divergence, meaning the actual number of LGBTQ+ aspects they consider. While the D&I Award often combines different aspects into one statement, which can improve practicality, the PRIDE Index reviews LGBTQ+ policies in multiple ways, even including questions related to the phrasing or incorporation of singular words. In addition, the PRIDE Index takes the repetition of staff trainings into account, which appears essential for an effective implementation of such policies.

Overall, these observations need to be weighed against the fact that the PRIDE Index specialises in LGBTQ+ issues, while the D&I Award tests LGBTQ± friendliness alongside other dimensions of diversity (scope divergence). This highlights one of the salient problems with the diversity of LGBTQ+ indices around the world, which tend to have different foci, leading to different results in the assessment (Ng et al. 2021, 4–8). Yet, as of 2023, 99 companies that have been awarded both the D&I Award and the PRIDE Index show highly similar evaluation results. As can be seen in Table 4, companies awarded gold by the PRIDE Index were also rated as best workplace by the D&I Award in 77 cases. Companies awarded silver by the PRIDE Index were also rated ”advanced” by the D&I Award in three cases. This indicates that although the two indices show varying levels of detail and emphasis, they still come to similar results in terms of their award rankings, with an 81% similarity (in 2023). Companies that ranked highly in the D&I Award, such as Bloomberg (99), Deloitte (99), and Unilever (99), also received gold in the PRIDE Index. We see this as some validation for both indices in measuring LGBTQ± friendliness. However, there are some notable outliers. For example, Okamura Corporation, a Yokohama-based manufacturer of furniture and industrial equipment, was only awarded bronze in the PRIDE Index, while it was ranked “best workplace” in the D&I Award, scoring 90 out of 100.

Because diversity policies require various structural and financial resources to implement, diversity and LGBTQ+ indices, like the Human Rights Campaign’s CEI, tend to favour larger companies that have the means to support such initiatives (Crehan et al. 2021, 246). This is supported partly by our sample. While there are some exceptions, such as the large automotive manufacturer Subaru receiving only a bronze award in 2022, the majority of bronze or “standard” award winners are small or medium-sized businesses (Rainbow 2023a). Most of the companies on the Forbes and Fortune lists are gold winners of the PRIDE Index, such as Japan Post, Honda, and Toyota. Furthermore, the D&I Award was more likely to name larger companies as “best workplace”. Precisely, companies with over 3,001 employees achieved the “best workplace” title 93.1% of the time (Rainbow 2023a).

In terms of components that exceed our category framework, both indices predominantly consider issues that directly impact the day-to-day lives of LGBTQ+ employees. Especially regarding transgender employees, they examine whether a company has rigid dress and styling codes for men and women (which disadvantages trans and non-binary people) and to what extent sex reassignment surgeries (or other related medical treatments), name changes or accommodation on business trips are considered by a company. These factors reflect discussions regarding LGBTQ+ workplace inclusion in the Japanese academic literature, which maintains that the social stigma of trans people is particularly high in Japan (Michitaka 2021; Yan 2021). Furthermore, the indices ask for the promotion of public understanding of LGBTQ+ people. Although these aspects are not captured by the Fletcher and Everly questionnaire, we consider them to be important additional factors ensuring a welcoming and inclusive workplace climate especially for Japan.

With regard to the limitations of the indices, it is important to note again that both the PRIDE Index and the D&I Award focus solely on input factors. While indices worldwide typically focus on outcome or input factors, this still limits the indices’ ability to provide a fully-fledged picture of LGBTQ+ measures of companies. As we discussed earlier, a more comprehensive assessment would require a combination of input and output measures to capture the policies’ impact on the individual level (Christensen, Serafeim, and Sikochi 2022). This could be achieved through follow-up surveys of employees’ perception of LGBTQ+ company policies. In fact, Rainbow, the company behind the D&I Award, already seems to have recognised this problem. In 2022, they introduced the TIC Award, which specifically addresses individual workers’ perceptions of their workplace (Rainbow 2023c). In general, however, many organisations lack the resources and infrastructure to carry out such in-depth evaluations of outcomes.

Besides the narrow focus on input factors, another significant limitation of the two indices lies in the way they weigh the different components to arrive at the respective award categories (weight divergence). While the PRIDE Index was shown to use a very good and fine-grained set of components to assess input measures, it operates rather crudely when it comes to the weighting of these components. As was explained above, the index operates with five categories of LGBTQ+ engagement: policy, representation, inspiration, development, and engagement/empowerment. To receive a gold award, a company needs to receive one point in each category. However, to take the category “inspiration” as an example, the 11 company measures in this category are all weighted equally. To receive a point in this category, the company can offer different kinds of trainings to various types of employees, but the measure “training to all employees”, which is arguably the most significant measure, is weighted equally to measures like “training includes exercises such as group work as well as reading and listening”. Here, it would make more sense to distinguish between measures that are key components and those that are less important and to attach different weights. The D&I Award has a very similar but arguably even larger problem with its weightings. As all 100 components of this index are weighted equally, it is at least theoretically possible to receive an “advanced” (61–80 points) award without having any meaningful LGBTQ±-friendly policy in place. This demonstrates clearly that the D&I Award as a broader index is less reliable to assess LGBTQ± friendliness than the PRIDE Index.

Scope for rainbow-washing: PRIDE Index and the D&I Award vs. SDGs

Our analysis of the components behind the PRIDE Index and the D&I Award has shown that they are, despite their limitations, overall valid indicators of companies’ efforts towards LGBTQ± friendliness. However, as they do not assess the outcomes of company policies and measures, there is naturally scope to misuse them for rainbow-washing. Having said this, they appear to be far more reliable indicators than the SDGs that have also become widely known for their role in portraying LGBTQ± friendliness in Japan. Introduced in 2015 by the UN, the SDGs are a set of 17 goals that aim to end global poverty and achieve a sustainable world by 2030 (UN 2015). Covering five areas, also referred to as the five P’s (people, prosperity, planet, peace, and partnership), the SDGs emphasise the urgency to act now on global challenges such as poverty, inequality, and climate change.

SDGs do not target LGBTQ+ rights directly, yet, by addressing a variety of social issues, they can often be linked to the needs and welfare of LGBTQ+ communities and have garnered significant popularity especially in Japan (Nijiiro 2021; Stonewall 2016). SDGs have thus the potential to be a sign of LGBTQ+ support. For example, 47% of PRIDE Index winners (2021) have also displayed SDGs as part of their diversity strategy. In this regard, various LGBTQ+ organisations in and outside of Japan have stressed the interdependency of SDG target issues such as race, sex, age, and gender and related themes to LGBTQ+ problems (Business for Marriage Equality 2022; Nijiiro 2021; Stonewall 2016; Takahira 2021). They also address implications for business strategies and management styles (Nijiiro 2021). Hence, SDGs in Japan have become associated with the promotion of LGBTQ+ rights and utilised by LGBTQ+ networks and communities in some parts. A prime example of this connection can be seen between the SDGs and “Business for marriage equality”, a Japanese initiative that advocates for legal recognition of non-heterosexual marriages (Business for Marriage Equality 2022).

To use the SDGs symbols and icons, companies and organisations can easily apply for permission via email (United Nations Department of Global Communications 2020). According to the user guidelines, companies are not required to prove that they subscribe to specific policies or initiatives to make use of the SDGs icon (United Nations Department of Global Communications 2020). In 2018, a practical guide was created that suggests strategies for businesses to implement the SDGs (United Nations Global Impact 2018), but there is no check on the implementation of specific policies. The SDG symbol is therefore by its nature rather a pledge of a promise than evidence of LGBTQ± friendliness both in terms of input as well as outcomes. The SDGs appear thus to be a prime example of a rather questionable marker of sustainability or, for that matter, LGBTQ± friendliness, protection or awareness, and SDGs are therefore susceptible to rainbow-washing, despite their popularity.

Conclusion

In this paper we have looked at the components behind two Japanese LGBTQ+ indices to assess their validity as indicators for LGBTQ± friendliness. For this analysis, we compared the components of the widely used PRIDE Index and the D&I Award with a novel framework, which we derived from a psychological study by Fletcher and Everly (2021). Our analysis shows that the two indices include all categories of our framework and thus we consider them to use valid components to assess the LGBTQ± friendliness of companies. In fact, both indices cover more aspects regarding companies’ supportive practices than our framework. As these additional aspects appear to take into consideration the special challenges for LGBTQ+ employees in the Japanese context, e.g. rigid dress codes based on binary gender norms, we consider these to be valuable additions.

Comparing the two indices with each other, we see that the PRIDE Index reviews our six categories through more relevant questions than the D&I Award, which is not an exclusive LGBTQ+ index. This leads us to the conclusion that the PRIDE Index appears to have a higher precision than the D&I Award. However, both indices have weaknesses in terms of their weighting procedures. In stark contrast to both indices, the SDGs appear to be less meaningful, as they do not require any specific company policies or proof of LGBTQ+ commitment.

Our research contributes to the existing but narrow body of literature concerning LGBTQ+ issues in Japan. It highlights that while the new Japanese LGBTQ+ indices align with developments in Europe and the United States and reflect all categories of our new conceptual framework, their effectiveness remains somewhat constrained, as they focus solely on input-oriented measures, failing to evaluate outcomes regarding the actual experiences of LGBTQ+ individuals within companies. Consequently, companies may receive high index ratings without genuinely fostering LGBTQ+ inclusive work environments, potentially perpetuating a phenomenon known as rainbow-washing. While structural policies can be a first indicator of a company’s stance, the successful implementation of such policies at the workplace level is equally important. In order to address this issue, companies that are being assessed by the rating institutions could additionally be asked to conduct mandatory anonymous surveys among their employees. Such surveys could be used to validate the impact of policies on workplace practices and climate, thereby enhancing transparency and accountability.

To this date, anti-discrimination legislation in Japan appears challenging, as policymakers continue to be apprehensive to include effective measures to ensure safe work environments for LGBTQ+ employees. They must therefore rely on companies’ commitment to create an inclusive work environment that is aware of LGTBQ+ issues. In this context, LGBTQ+ indices have the potential to be one of the few reliable information sources providing insights into a company’s workplace culture and ideals. Against the backdrop of labour shortages and changing demographics in Japanese society, creating inclusive and accommodating workplaces will become ever more critical for Japanese companies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Annika Clasen

Annika Clasen is a PhD candidate at the Department of Modern Japanese Studies at Heinrich-Heine-Universität Düsseldorf, Germany. Her research interests include Japanese foreign and security policy, norms and values in the domestic and international politics of Japan.

Harald Conrad

Harald Conrad is professor at the Department of Modern Japanese Studies at Heinrich-Heine-Universität Düsseldorf, Germany. His research interests include Japanese business and economics, economic sociology, and social policy.

Notes

¹ The acronym LGBTQ+ stands for Lesbian, Gay, Transgender/Transsexual and Queer or Questioning. The plus at the end emphasises that there are more variations of sexual and gender identities that cannot be contained in this acronym. We use the term LGBTQ+ also when referring to academic papers that might themselves use other terms like LGBT whenever the context of these papers suggest that their authors intended to include more variations of sexual and gender identities.

² The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the 500 largest US companies by total revenue for their respective fiscal years.

³ “Voices” is a term derived from feminist scholarship, where the concept of “voice” carries with it assumptions of choice, for example that individuals have certain rights to “choose” (Lipton and Mackinlay 2017, 62). For this reason, it is associated with empowerment and agency, particularly for marginalised groups. We use this concept to highlight the notion of LGBTQ+ inclusion in the workplace.

⁴ The “beginner” category has only been used in 2021.