Not long ago, the uprising and global action in support of the Black Lives Matter movement felt like a turning point in the corporate world. Companies across industries rushed to align themselves with the cause, pledging resources, elevating new voices, and vowing to embed diversity, equity, and inclusion (DEI) into their DNA.
But that momentum has faded.
Today, the tone has shifted, from bold declarations to quiet deletions. DEI strategies, targets, and programs are being quietly scaled back or scrapped altogether, casualties of a growing backlash and a climate where even the language around DEI has become politicized.
Many of our clients have built DEI into their core business strategy. Their commitments to people and planet are core to how they operate, and critical to long-term resilience and growth. Despite political headwinds, they remain focused on making progress. But they’re not immune to shareholder and political pressures, especially in the U.S., where the operating context diverges sharply from other global markets.
In this cultural tug-of-war, businesses face a false binary: stay silent and safe or speak up and risk scrutiny. But the truth is, DEI is not a political stance. It’s a business imperative. Retreating now doesn’t just stall progress; it actively undermines a company’s ability to innovate, compete, and attract top talent needed for long-term success.
The real question is: how do we reframe and reassert the value of DEI, not just as the right thing to do, but as a core driver of future-focused strategy?
The Growing Politicization of DEI
In recent years, DEI has become a contentious issue in the U.S. political and corporate spheres. From Trump-era executive orders banning race-conscious hiring and environmental justice, to the 2025 Executive Order 14151 targeting federal DEI roles, the political backlash has been loud and sustained. States like Florida have passed laws such as the "Stop WOKE Act," curbing DEI programs in universities. These shifting federal and state policies, along with ongoing legal battles, are putting real pressure on companies to reassess their DEI strategies. But caving to that pressure is risky.
Why Backtracking on DEI Is a Risky Move
While some companies may feel compelled to scale back DEI efforts to avoid controversy, the long-term risks of abandoning DEI efforts could outweigh any short-term relief.
Investor confidence is at stake. Walmart learned this firsthand when more than 30 investors, representing $266 billion in assets, challenged its DEI rollback and labelled it "disingenuous." The incident not only harmed reputation but also eroded stakeholder trust.
Consumer loyalty is hard to win back. Target’s experience serves as a cautionary tale. After facing backlash for its inclusive products and DEI commitments, Target scaled efforts, hoping to reduce controversy. However, the move alienated many of the consumers who values its stance. As a result, Target found itself caught in the middle, losing trust from socially conscious customers, who boycotted the brand causing reduced sales post-announcement, while still facing criticism from those pushing for the rollback.
Legal and financial risks loom. Robust DEI programs help safeguard against systemic bias in hiring, compensation, and promotion practices. Weak or absent frameworks open the door to litigation, as seen in Goldman Sachs’ $215 million discrimination settlement in 2023.
Valuable relationships are at stake. With the multinational nature of business today, what works in one country may have the opposite repercussions in another. Transport for London reportedly ended its relationship with American consulting firm Accenture after the consultancy scaled back its DEI policies citing misalignment of values.
Employee morale and retention are jeopardized. Millennials and Gen Z expect transparency, equity, and inclusion. When Paramount cut diversity roles in March 2025, internal backlash followed quickly. An open letter accused leadership of giving in to politics instead of standing by their values. When employees feel disconnected, innovation drops, morale suffers, and good employees leave.
Talent acquisition becomes more challenging. According to a recent survey, 76% of job seekers factor workplace diversity into employment decisions. A diminished focus on DEI can shrink the pipeline of future leaders.
Debunking DEI myths
Misconceptions about DEI persist. Some perceive it as performative or politically motivated. In reality, the data tells a different story. A 2015 McKinsey report found that companies in the top quartile for ethnic and racial diversity in leadership were 35% more likely to outperform peers. Its 2020 follow-up reinforced the connection, showing that the business case for diversity had become even stronger. Deloitte meanwhile, found that inclusive companies are six times more innovative and twice as likely to meet or exceed financial targets. Far from being symbolic, DEI is a proven driver of performance, innovation, and long-term growth.
The notion that DEI is expensive or distract from core business goals doesn’t hold up. Companies that embed DEI into hiring, leadership development, and supplier policies see returns in resilience, innovation, and brand loyalty. Take Ben & Jerry’s: the brand has stood firm on equity and justice, openly criticizing peers who’ve backed away from DEI. Its ongoing DEI initiatives and authentic commitments has allowed it to build meaningful partnerships with marginalized communities, driving innovation and expanding market reach.
The Path Forward
So, where does this leave us? In today’s polarized climate, stepping back can feel like the safer path. But silence is not neutral, and fear is not a strategy. Instead of withdrawing, companies must respond with clarity, care, and a commitment to practical, values-driven action. Moving forward means:
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Reaffirming DEI as a strategic business priority rooted in values like fairness, opportunity, innovation, and employee well-being, rather than a political stance
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Rethinking language – talk less about “DEI” as a label, and more about what it actually means: inclusion, opportunity, belonging
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Prioritizing areas of broad relevance and support such as inclusive hiring, pay equity, mental health, disability inclusion, neurodiversity, and family support policies
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Developing messaging that aligns DEI with organizational goals and cultural context
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Managing legal risk while advancing meaningful change
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Empowering leaders to act consistently and communicate authentically
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Reporting transparently and using data to build internal alignment and external credibility
Those business that stay committed, flexible, and focused will be the ones to earn loyalty, attract top talent, and build the resilient, future-ready organizations the moment demands.