Investors blame North Carolina’s anti-LGBT law for the economic backlash

They blame the discriminatory HB2 for the economic harm it has caused.

Charlotte, North Carolina. CREDIT: iStock/Sean Pavone
Charlotte, North Carolina. CREDIT: iStock/Sean Pavone

A group of more than 50 investment managers are pointing the finger at North Carolina to repeal HB2, which prohibits cities from passing LGBT protections and blocks transgender people from bathrooms that match their gender. Not only are many companies taking their business elsewhere, the law’s ugly reputation is also making it more difficult for those working with in the state.

Combined, the coalition of investors represent $2.1 trillion in collective assets. The statement was organized by Trillium Asset Management, Croatan Institute, and New York City Comptroller Scott M. Stringer.

In a statement, the signatories explain that they “believe that equality is fundamental to a successful workplace and community. As long-term investors in companies doing business in North Carolina, the signatories are concerned that HB2 is making it difficult for portfolio companies to provide the safe, open, and inclusive environment necessary for a successful workplace.”

Trillium CEO Matthew Patsky said flatly that “North Carolina has written discrimination into state law” and he’s worried that the damage could soon become “irreversible.” Trillium, which has one of its four nationwide offices in Durham, oversees $2 billion in assets.

“There’s no question whatsoever that corporate and public policies that celebrate and strengthen diversity and inclusivity of all people are good for society and good for business,” Patsky added.

The Croatan Institute, an independent nonprofit research institute based in North Carolina’s research Triangle, strives to connect researchers and investors to advance environmental sustainability. “Simply put, House Bill 2 is making it harder to finance businesses and get deals done in North Carolina,” explained Dr. Joshua Humphreys, president and senior fellow of Croatan. “This diverse group of investors has therefore come together to call for a full repeal of HB2 — before the investment climate in our state deteriorates further.”

Not only is the size of the political pressure from this coalition massive, but the specificity of their statements is significant. North Carolina Gov. Pat McCrory (R) and other Republican leaders in the state legislature have tried to obfuscate blame for championing the law by instead suggesting that Charlotte instigated the controversy by passing LGBT protections and somehow forcing their hand. On multiple occasions, they’ve pushed for “compromises” that require Charlotte to repeal its protections first, following which lawmakers would then (and only then) consider repealing HB2. Last week, the Charlotte City Council rejected taking that bait for at least the second time.

The investors’ statement makes clear that their problem is not Charlotte’s LGBT protections, which they support, but HB2 itself, which institutionalizes anti-LGBT discrimination.

According to Wired, HB2 has so far cost the state nearly $400 million, including legal fees, lost jobs, and lost revenues from sports and entertainment.

Attorney General Roy Cooper (D), who has denounced HB2 and refused to defend it in court, is challenging McCrory for the governor’s seat. A new poll out Monday from High Point University shows Cooper beating McCrory 50–41.