DEI (standing for Diversity, Equity and Inclusion) has become a popular buzzword in recent years, linked with targets and priorities for many businesses.  

However, the re-appointment of President Trump has caused many of the largest US companies to scale back or entirely drop their DEI targets.  

How have companies reacted? 

Accenture, the global consulting firm is one example, sharing an internal memo to their 700,000 employees saying, “the company will start “sunsetting” the diversity goals it set in 2017, along with career development programmes for “people of specific demographic groups”. 

Other corporates who have either axed or rolled back their DEI commitments since Trump’s inauguration include Target, Google and Amazon.  

This roll back has also extended to financial institutions including Deloitte, Goldman Sachs and Blackrock amongst others. 

What reason have corporates given for moving away from DEI? 

One of the arguments anti-DEI advocates have made is that it may negatively impact performance and returns.  

This argument has been best illustrated by the Florida State Board of Administration, who oversee public employee retirement funds, bringing a class action lawsuit against American retailer Target.  

They allege that the company’s board of directors deceived shareholders about the true risk of its 2023 Pride Month campaign, a campaign which provoked consumer backlash and “wiped out over $25 billion in Target’s market capitalization”. 

This lawsuit of course does not mention the number of other issues that Target have faced in the past few years that has led to their declining performance.  

How are consumers and shareholders reacting? 

Amidst the roll back, companies John Deere and Apple are proving that shareholder appetite for DEI is still prevalent.  

Both companies recently held votes on their respective DEI plans, with both sets of shareholders recording a rejection rate greater than 95%.  

The Securities and Exchange Commission (SEC) also looks to be taking a firm stance on this, having recently blocked an attempt from Boeing to “no action” a civil rights audit proposal, filed in response to their alleged DEI roll back.  

Companies who have already decided to scale back their programs are also facing the risk of consumer backlash.  

This has been demonstrated by the “Target-Fast” boycott that started on Wednesday, a 40-day consumer boycott driven by the BAME community.  

The boycott stems from disappointment that Target, who pledged to add products from more than 500 Black-owned businesses by 2025, have scaled back their DEI efforts with minimal resistance. Upwards of 100,000 people have already signed up.   

What next?

The retreat from DEI targets by major US companies shows how vulnerable corporate commitments can be to political trends and is symbolic of how politicised ESG continues to be.  

Genuine DEI progress requires long-term commitment, regardless of political pressure, and the recent response by shareholders and consumers alike proves that we will not see a complete erasure of these standards anytime soon.

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𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗔𝗻𝗮𝗹𝘆𝘀𝘁 𝗞𝗲𝘃𝗶𝗻 𝗜𝗷𝗮𝗵 𝗢𝗳𝗼𝗻.

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