Rainbow or Rainbust? Experts Address Rainbow Washing in Corporate Messaging

June rolls around, and suddenly, a spectrum of rainbow logos inundates our social media feeds and store windows. It’s Pride month, and corporations are quick to jump on the rainbow bandwagon, often with superficial gestures that leave consumers questioning the sincerity of their support for LGBTQ+ rights. This phenomenon, often termed “rainbow washing,” raises diversity, equity, and inclusion (DEI) concerns as consumers, especially in younger demographics, are increasingly skeptical of corporate motives.

The rapid, viral spread of the consumers’ voices through social media has further amplified the scrutiny of rainbow-washed marketing campaigns and has led companies to hesitate taking initiatives in Pride marketing or allyship altogether.

When navigating Pride Month marketing, companies must go beyond surface-level symbolism, as genuine allyship requires ongoing commitment, transparency, and accountability. By incorporating diverse perspectives, fostering inclusive environments, and actively engaging with social issues, brands can move beyond rainbow-washing marketing to effect meaningful change within the queer community.

Conversely, professionals who track various companies’ DEI and environmental, social, and governance (ESG) efforts must ensure they have a full 360-degree view in their research. This is made easier through artificial intelligence (AI) and a market intelligence platform that aggregates all of the crucial voices and market perspectives into one single place, like AlphaSense.

In this blog, we explore the importance of creating a cohesive narrative for your DEI efforts to ensure that a company or analyst has the ability to track companies’ actions versus what they say they are doing. By leveraging AlphaSense, research professionals can essentially create a single source of truth for a company’s DEI and ESG efforts.

Understanding Rainbow Capitalism

Rainbow washing, pride washing, or pinkwashing are all similar terms that fall under the broader spectrum of rainbow capitalism. Rainbow capitalism refers to the corporatism and consumerism behavior of companies during Pride Month to appeal to the larger LGBTQ+ community, often by appropriation, in order to profit from the movement.

Similarly, rainbow washing more specifically refers to the practice of companies opportunistically leveraging queer symbolism and themes in their marketing materials without genuinely supporting LGBTQ+ rights in their business practices.

Typically, these campaigns surface during Pride Month through illustrative means such as limited edition rainbow merchandise or updating a LinkedIn profile photo with a rainbow overlay.

So why should you care about the implications of rainbow washing?

From an ESG perspective, rainbow washing raises questions about a company’s social responsibility and commitment to DEI. Investors and stakeholders are increasingly scrutinizing companies’ ESG practices, including their approach to LGBTQ+ inclusion.

Thus, engaging in rainbow washing without tangible efforts to support LGBTQ+ employees, promote diversity, or advocate for LGBTQ+ rights can damage a company’s reputation, undermine its ESG credentials, and even impact its bottom line.

The ethical dilemma of authenticity versus opportunism lies at the heart of the issue. While some companies genuinely advocate for LGBTQ+ rights and inclusivity year-round, others may view Pride Month solely as a marketing opportunity. Such marketing campaigns demand a closer look to discern whether these companies’ efforts are acts of genuine allyship or performative gestures.

Enhancing your DEI strategy and aligning it to marketing efforts impacts consumer trust, creates longer-lasting relationships, and ensures you don’t lose revenue to competitors who might be conducting better DEI and ESG practices.

Learn more about rainbow capitalism in our blog, Behind the Rainbow: How are Companies Positively Impacting LGBTQ+?.

Unraveling Rainbow Washing in Pride Campaigns

With AlphaSense Expert Insights, we were able to quickly gather crucial insights and advice from former directors and vice presidents at well-known companies to understand the importance of companies providing DEI intentionality behind Pride campaigns.

The former senior director of global marketing at Molson Coors emphasizes the need for intentionality in brand campaigns and the importance of testing when running campaigns targeted at specific demographics. In the expert’s opinion, simply slapping a rainbow on a logo without understanding its impact is not enough: 

“I think for big massive brands, it’s requiring a big pause. We just started Gay Pride Month, and there already has been a lot of movement toward brands pride-washing their creative with just putting a rainbow logo in their logo and then calling it a day. I think brands need to be intentional. You can’t take actions like these lightly. You need to understand the total consequence. You need to test it.”

– Former Senior Director of Global Marketing, Molson Coors Beverage Company | Expert Transcript

Companies should incorporate cohesive DEI efforts into their marketing efforts year-round rather than for brief campaigns that may appear as performative. This intentionality resonates more with customers who share this sentiment and can foster corporate allyship and consumer loyalty.

This sentiment is echoed by a vice president of a beauty and cosmetics company who aptly asserts that appealing to LGBTQ+ consumers should not be a momentary concern as they exist with their identities every day.

“People in these communities are these people in these communities 365 days a year. Like I said, customers are really smart. They want to be engaged.”

– Vice President, Elizabeth Grant International Inc. | Expert Transcript

A former director at Abercrombie & Fitch Co. suggests consumers, particularly among younger demographics, are becoming more discerning of corporate initiatives, as there has been a significant increase in demographic-specific campaigns during the last few years.

“… We found out customers also wonder about the sincerity and authenticity of these campaigns that are put out there by retailers. I think that’s one thing these younger customers are questioning, especially environmental efforts.”

– Former Director, Abercrombie & Fitch Co. | Expert Transcript

However, the conversation of Pride is only one shade of the DEI conversation. Ultimately, companies and financial professionals track DEI information all year round, whether for ESG or Pride, because it speaks to the larger themes that companies grapple with when conducting their business in an evolving social climate.

So why should you start tracking rainbow capitalism themes in your competitive analysis and market strategy?

For businesses and financial investors, tracking themes in rainbow capitalism is essential for completing your market analysis and turning your competitive strategy from reactive to proactive. Missteps in DEI practices and ESG reporting can result in damaging and negative press, which can affect the share pricing of a company or the bottom line of a financial manager’s portfolio.

Staying well-informed on best practices for Pride marketing and avoiding rainbow-washed campaigns can improve your business’s credibility and mitigate the risk of damaging press. More importantly, it can strengthen the bond between your consumers with genuine allyship.

Understanding soft market information, such as company culture and DEI practices, is imperative for business strategy and can enhance factual, data-driven research. For example, qualitative data on a company’s culture can make or break a merger and acquisition (M&A) or impact the viability of a venture capital investment.

Similarly, financial managers must be wary of how companies in their portfolios report on ESG topics and conduct due diligence on potential opportunities by researching the company’s DEI practices before making investments. Without extracting this qualitative level of monitoring, business professionals are not getting a full 360-degree view in their primary research, which can lead to gaps in their marketing or investment strategies.

The full value of AlphaSense can empower professionals to conduct comprehensive research on any topic and accelerate their time to insight by leveraging our powerful artificial intelligence (AI) technology. By searching key terms like “DEI,” “ESG,” or “pride,” you can cut through the noise and get up to speed on how companies are reporting and operating in these business subcultures to create well-informed strategies. AlphaSense enables you to aggregate all of these disparate content pieces into one single platform to tighten your research process and spend less time searching, and more time analyzing.

Read more about corporate commentary on underrepresented groups in our blog, Differing Messages on #BlackLivesMatter & Pride Showcase Corporate Bias.

Aligning Corporate DEI Efforts with ESG Reporting

The importance of DEI falls under the “S” in “ESG” and has recently become a very crucial focal point for companies as investors move away from a heightened focus on the “E” in previous years. Recent studies show that almost 50% of millennial millionaires consider social factors in their purchasing decisions, and nearly 80% of investors consider ESG in their investment decisions.

According to research conducted by S&P Global, there has been an increase in mentions of LGBTQ+ topics across ESG reports, suggesting strong momentum in inclusion efforts. However, only 24% of companies worldwide with ESG reports mentioned LGBTQ+ issues, which highlights the need for continued growth.

In an era of heightened social consciousness, consumers seek meaningful alignment between brand values and actions, which ultimately challenges companies to engage in genuine involvement beyond performative gestures. Companies should strive for alignment between their external messaging and internal practices.

This entails fostering an inclusive workplace culture, implementing non-discriminatory policies, supporting LGBTQ+ employee resource groups, and actively contributing to LGBTQ+ causes beyond tokenistic gestures.

For example, ITV stated in their 2023 Impact Report, found in the AlphaSense platform, that its 2025 target is to increase its LGBTQ+ workforce representation by 7% and build momentum from its steady increase of queer colleagues since 2021.

Additionally, Definity Financial Corporation stated in its 2023 ESG Report that its objective is to have at least 30% women and at least 15% black, indigenous, people of color (BIPOC), LGBTQ+, and/or people with disabilities at the executive leadership levels by 2026.

Furthermore, its board of directors committed to a board in which women and men each represent at least 30% of all directors and has targeted that by Definity’s annual meeting in 2026 at least one director identifies as BIPOC, LGBTQ+, or a person with a disability. In 2022, both of these objectives were met.

In its Q1 May 2024 Investor Presentation, Definity stated that 49% of its employees identified as black, indigenous, BIPOC, and/or LGBTQ+, and/or with a disability, indicating that it exceeded its 2023 target with genuine efforts to increase DEI in its workforce.

Ultimately, these ESG reports depict the sheer growth in LGBTQ+ communities and other minority groups corporate workforces are fostering and, consequently, the rising importance of responsible ESG reporting practices.

You can then use these company reports as a benchmarking tool and compare them to earnings calls, expert insights, and press for a more well-rounded view of a company’s efforts. For example, even though a company might release an ESG report that appears to be positively or majorly impactful, a press report or article could potentially be published that surfaces best practices they could be overlooking.

The AlphaSense platform allows business and financial researchers to aggregate and investigate a company’s ESG claims with their DEI practices to conduct comprehensive due diligence.

Leveraging AlphaSense for ESG Reporting and Due Diligence

When tracking ESG topics and themes, companies and businesses require a thoughtful and fine-tuned approach to understand the nuances of ESG dynamics carefully. AlphaSense’s all-in-one market intelligence platform is a powerful tool that allows businesses to conduct comprehensive research to monitor ESG issues within the competitive landscape.

Below, we explore three key ways that the AlphaSense platform can help businesses conduct comprehensive due diligence and get a 360-degree view on ESG topics.

Conduct Faster Research for ESG Reporting

The current lack of reporting standardization can render disclosing ESG metrics challenging. Today, this typically entails manually parsing through disparate resources to find information on a peer’s ESG performance—a process that wastes time and money.

In the AlphaSense platform alone, there are over 18.1 million mentions of “ESG” within our extensive library of aggregated content and perspectives, eliminating the need to hop from site to site. Everything you need to begin benchmarking is indexed and searchable within one platform.

To ensure you stay up to date on all new developments, our dashboard tool automatically populates new content on the search topics that are most relevant to you, such as net zero emissions, DEI, biodiversity, or data security. Content on the AlphaSense platform spans across the four key perspectives of research to provide you with a complete picture of the ESG landscape.

The AlphaSense platform empowers you to conduct comprehensive ESG due diligence with cutting-edge AI technology to track ESG themes or create a company watchlist. With AlphaSense’s powerful AI-search capabilities, you can save time by getting straight to the most relevant insights to fill research gaps in your ESG reporting and corporate strategy. 

Browse by expert title, company name, industry, topic, and other smart search features to monitor keywords and surface insights across the platform.

Learn more about ESG benchmarking through AlphaSense in our blog, How to Use AlphaSense for ESG Benchmarking.

Understand Sentiment Around ESG Themes

With AlphaSense, you can find positive and negative dialogue on any topic in seconds using our sentiment analysis technology. This feature allows corporate professionals to identify and quantify levels of emotion around specific topics within the expert transcripts, news, and financial documents available in the platform.

Using a boolean operator, you can search for mentions of a specific topic in a positive or negative light (for example, “sustainability” AND “positive”) and filter by expert calls. The resulting snippets populate any positive mention of the topic.

Companies can use AlphasSense’s sentiment analysis capabilities to understand the overall sentiment surrounding rising ESG issues and themes. Our technology helps companies devise marketing strategies and conduct due diligence before launching demographic-targeted campaigns.

Discover Expert Insights on ESG Trends

Conducting primary research and gaining firsthand perspectives from industry experts is essential to understanding the impact of demographic-targeted marketing campaigns. Listening to market voices can help businesses identify core areas for improvement, address consumer pain points, and enhance their market research.

By leveraging AlphaSense’s Expert Insights, companies can enhance their primary market research by gaining expert and customer perspectives on ESG initiatives and campaigns in our expert transcript library, which has tens of thousands of transcripts.

Our Voice of the Customer (VoC) transcripts allow you to leverage direct feedback from structured interviews with buyers, influencers, and decision-makers across the public and private sectors. Researchers can also glean instant insights and SWOT analysis from any expert transcript or document in the platform with our generative AI (genAI) technology, Smart Summaries.

Defy Doubt in Your ESG Market Research

As Pride Month unfolds, companies must navigate LGBTQ+ targeted marketing responsibly while simultaneously accounting for the ethical concerns and ESG implications these campaigns can surface. Rainbow washing not only undermines corporate credibility but also risks alienating LGBTQ+ consumers.

Beyond the rainbow overlays lies an opportunity for meaningful dialogue, genuine allyship, and transformative impact between corporations and queer consumers. By prioritizing authenticity, transparency, and genuine allyship, companies can make meaningful contributions to LGBTQ+ equality while upholding their ethical and ESG commitments.

It’s a call to action for brands to move beyond rainbow merchandise and embrace the profound responsibility of driving the positive social impact that their platforms can provide. Corporate researchers can leverage AlphaSense as a critical resource to conduct all-in-one market research on ESG topics to develop more inclusive DEI practices and well-informed ESG reporting.

Defy doubt in your ESG market research with AlphaSense. Start your free trial today.