The retreat from DEI has gone from a handful of companies to one of the primary objectives of the new Trump administration. While the pre-election season was marked by a cascade of major companies ranging from Meta to Tractor Supply axing diversity initiatives in response to pressure from activists like X journalist Robby Starbuck, the post-election world is quite different. Diversity, equity, and inclusion are in the crosshairs of the federal government, and now a movement that started with a souring on the racialism that crept into American boardrooms after the death of George Floyd has the potential to snowball into a massive trend across industries.
But as the media portrayal shifts from diversity as an integral part of a workforce to a rapidly burgeoning liability fraught with legal and reputational risk, one major misconception remains about the effects of ditching DEI initiatives: the idea that ditching DEI is a capitulation to far-right ideology.
Observe, in the case of Meta: journalists described the company’s ditching of diversity initiatives as a “further right-wing shift.” Or this stunning piece of analysis from Al Jazeera: ”The real end goal of the far-right war against affirmative action is… a state of quasi-legal racial segregation.” Or this piece at Yahoo News, similarly about the cascade of companies dumping DEI: “These 12 major companies caved to the far right.” You get the picture. Ditching discriminatory DEI initiatives, depending on your perspective, is anything from complicity in right-wing activist narratives to dog-whistling white supremacy.
I oversee shareholder engagement at one of America’s leading ESG-skeptical corporate engagement firms. I’ve watched and covered many recent corporate DEI pivots and helped clients put proposals on the ballots of dozens of companies calling for rollbacks on similarly divisive policies. When people ask me why this pivot has been occurring, the answer is summed up in the following: for years, left-wing activists took their demands to investor relations departments and executive boards at America’s largest brands, while the center and right were asleep at the wheel of asserting their financial influence. As a result, brands shifted in the direction of the people they were overwhelmingly hearing from.
Spoiler alert, it wasn’t people trying to keep companies out of politics. A cursory glance at the growth of DEI, ESG, and the increasingly normalized practice of companies opining on hot-button cultural and political issues outside of their core business practices, proves this to be the case. Conservatives, and right-of-center consumers hemmed and hawed, and threatened boycotts as left-of-center activist groups talked to executives, used the pathways of shareholder engagement, and saw progress.
Against that backdrop, look to 2025: a majority of companies are reevaluating their complicity with activist groups, and changing up their strategy for the next four years where rampant progressivism is viewed as anything but progress by many influential corporate actors. Is the pendulum of corporate America shifting right?
The answer, at least as of early 2025, is a resounding no. Trump’s recent executive order prohibiting the use of discriminatory DEI in federal contexts, and the accompanying similar kiboshes in the private sector, is being painted as a newly culturally ascendant Right running wild with power. The reality? Ceasing DEI programs that rely on defacto quotas or otherwise encourage racial discrimination through corporate policies, is not a bid to make companies “right-wing.”
It’s a bid to achieve political neutrality – and insulate against the coming legal reckoning for biased corporate policies.
As someone who engages with companies about these biased corporate policies daily, a few notable examples come to mind of policies that, despite what DEI advocates would have you think, are not milquetoast endeavors to simply respect employees from diverse backgrounds. They’re recent, indefensible, examples of how a theoretical desire for diversity gets applied as unequal employee treatment.
Internships only offered to applicants of a certain race (or that bar applicants from certain racial groups from applying), at IBM.
Racial quotas for recruitment and promotion, which also has IBM currently under legal fire but many large firms also boasted about.
Employee resource groups (ERGs) offered by companies based on race and gender but not other protected aspects like faith. (If a company’s black employees can have a special group but its Muslim employees can’t, that’s a conversation shareholders ought to be having, and one my firm has been discussing with many companies this year).
Policies that create quotas based on race and gender for the suppliers a company works with, a policy that Walmart recently axed as part of its DEI rollbacks.
Race a criterion determining eligibility for grant funding, as at Citi (this practice may have been discontinued).
Rolling back these politicized policies doesn’t make a company “take a different side.” It takes the company away from politics and away from side-taking in general. American shareholders do not need companies who previously had DEI programs to institute some “reverse DEI” for members of groups that previous DEI programs did not prioritize. Shareholders want race neutrality in hiring because of the underlying belief that corporate neutrality is better for productivity and profitability. Eschewing politics altogether is a better solution for companies looking to maintain long-term reputational stability than pendulum-swinging their policies every time the balance of power shifts in Washington.
Why does this narrative of “ending DEI as a far-right capitulation” persist? The obvious explanation is that the current push against DEI in academia and the workplace is coming, in the majority of cases, from the political right. But that doesn’t mean that policies proposed by the right only serve the right. Policies like race-neutral recruitment and promotion serve everyone. Policies prohibiting the use of racial quotas serve everyone who doesn’t wish to see their corporate career as the product of how well they meet skin-deep quotas.
There’s one last explanation of why this false narrative about ending DEI persists. Much of DEI training discusses the dangers of unconscious bias. The fact is, many people (and some companies) see corporate neutrality as extreme because they’ve been taught the kind of unconscious bias that sees activist-driven, one-sided, corporate-ideological lockstep as normal. And that’s one area of unconscious bias that every business should be trying to unlearn.