As DEI is challenged, new strategies emerge

In Union County, South Carolina, the once-thriving cotton mills that provided livelihoods for many have long disappeared. The county is now classified as a “food desert,” meaning that many of its residents live far from the nearest grocery store. Recognizing this issue, local non-profit leader Elise Ashby took action in 2016, collaborating with farmers to distribute discounted boxes of fresh produce throughout the county, where approximately 30% of the population is Black and around 25% live in poverty.

At first, Ms. Ashby financed the project using her own savings and minor grants. But in 2023, her work gained substantial support as the Walmart Foundation—the charitable arm of one of the country’s largest companies—awarded her organization more than $100,000 (£80,000). This funding was included in a larger $1.5 million initiative designed to assist “community-based non-profits led by people of color.”

“It moved me to tears,” she confessed. “It was one of those instances where you understand that someone genuinely recognizes and appreciates your efforts.”

Only two years prior, initiatives like this received widespread support from leading corporations throughout the United States, as the nation grappled with systemic racism after the 2020 murder of George Floyd, a Black individual who lost his life beneath the knee of a police officer in Minneapolis.

However, many of these corporations are now retreating from such commitments. In November, Walmart announced the discontinuation of some diversity initiatives, including plans to shut down its Center for Racial Equity, which had been instrumental in funding Ms. Ashby’s grant.

Businesses like Meta, Google, Goldman Sachs, and McDonald’s have taken comparable actions, indicating a wider corporate retreat from diversity, equity, and inclusion (DEI) efforts.

This shift marks a notable cultural change, driven in part by fears of legal challenges, regulatory scrutiny, and social media backlash—pressures exacerbated by the new U.S. president.

Since taking office in January, Donald Trump has aggressively worked to dismantle DEI programs, advocating for a return to “merit-based opportunity” in America. He has ordered the federal government to eliminate DEI initiatives and launch investigations into private companies and academic institutions suspected of engaging in “illegal DEI practices.”

Within the early months of his second term, the Department of Veterans Affairs closed its DEI offices, the Environmental Protection Agency placed nearly 200 civil rights employees on paid leave, and Trump dismissed the country’s top military general—a Black man—after his defense secretary previously suggested he should be removed due to his association with “woke” DEI policies.

At first glance, it may seem that the U.S. has abandoned efforts to improve outcomes for historically marginalized racial and identity groups. However, some experts suggest these initiatives may persist, albeit under different names that align more closely with the shifting political climate of a nation that has just elected a leader committed to combating “woke” policies.

The Roots of the Backlash

Initiatives similar to DEI first gained traction in the U.S. during the 1960s, in reaction to the civil rights movement, which aimed to extend and safeguard the rights of Black Americans.

Originally termed as “affirmative action” and “equal opportunity,” these initiatives were designed to address the enduring effects of slavery and the institutionalized discrimination imposed by Jim Crow laws.

As social justice movements expanded to include women’s rights, LGBTQ+ advocacy, and racial and ethnic diversity, the language describing these efforts widened to embrace “diversity,” “equity,” and “inclusion.”

Within corporations and government agencies, DEI efforts largely focused on hiring policies that framed diversity as an economic advantage. Advocates argue that such programs address disparities across various communities, though much of the emphasis has historically been on racial equity.

The push for DEI surged in 2020 amid the Black Lives Matter protests and increasing demands for social change. Walmart, for instance, pledged $100 million over five years to establish its Center for Racial Equity. Wells Fargo appointed its first chief diversity officer, while companies like Google and Nike already had similar leadership roles in place. Following these changes, S&P 100 companies created over 300,000 new jobs, with 94% of them going to people of color, according to Bloomberg.

However, as swiftly as these initiatives grew, a conservative backlash arose.

Stefan Padfield, executive director of the conservative think tank National Center for Public Policy Research, contends that DEI programs inherently separate individuals by racial and gender categories.

More recently, critics have amplified their claims that DEI initiatives—initially intended to fight discrimination—are in themselves discriminatory, especially against white Americans. Sessions focusing on “white privilege” and systemic racial bias have faced significant criticism.

This opposition originates from conservative pushback against critical race theory (CRT), an academic approach proposing that racism is intricately woven into American society. Over time, movements opposing CRT in educational settings transformed into broader endeavors to punish “woke corporations.”

Social media accounts such as End Wokeness and conservative personalities like Robby Starbuck have leveraged this sentiment, focusing on companies for their DEI efforts. Starbuck has taken credit for influencing policy changes at firms like Ford, John Deere, and Harley-Davidson after revealing their DEI programs to his online audience.

One of the most prominent triumphs for this movement took place in spring 2023, when Bud Light encountered significant backlash for collaborating with transgender influencer Dylan Mulvaney. Demands to boycott the brand and its parent company, Anheuser-Busch, led to a 28% drop in Bud Light sales, based on an analysis by Harvard Business Review.

Another significant milestone came in June 2023, when the Supreme Court decreed that race could no longer be a consideration in university admissions, effectively dismantling decades of affirmative action policies.

This decision raised questions about the legal foundation of corporate DEI policies. After the ruling, Meta advised employees that “the legal and policy landscape surrounding DEI has shifted,” shortly before revealing the termination of its own DEI programs.

Corporate Retreat: A Question of Authenticity

The swift reversal of DEI initiatives among large corporations prompts questions regarding the genuineness of their dedication to workforce diversity.

Martin Whittaker, CEO of JUST Capital—a non-profit that surveys Americans on workplace issues—believes that many companies initially embraced DEI efforts to “look good” in the wake of the Black Lives Matter movement, rather than out of genuine commitment to change.

Nevertheless, not all businesses are succumbing to political and legal pressure. A report by the conservative think tank Heritage Foundation pointed out that although DEI programs seem to be decreasing, “nearly all” Fortune 500 companies continue to incorporate DEI commitments in their official statements. Moreover, Apple shareholders recently chose to uphold the company’s diversity efforts.

Public opinion on DEI remains divided. A survey by JUST Capital suggests that support for DEI has waned, but support for related issues—such as fair pay—remains strong. Similarly, a 2023 Pew Research Center survey found that a majority (56%) of employed adults still believe that workplace DEI efforts are beneficial.