DEI is DOA

If you’ve been anywhere near a TV or social media platform in the past year, you’ve heard President Trump and his supporters blame DEI (diversity, equity, and inclusion) for just about anything and everything that goes wrong.

So it came as no surprise that during his first week in office, Trump signed a slew of executive orders dismantling DEI in both the private and public sectors, including terminating DEI government positions and wiping out equity-related grants.

Much of corporate America quickly fell into lockstep, rolling back entire programs created just a few years ago aimed at making workplaces more inclusive and hiring people from historically underrepresented groups.

For instance, Google announced it was ending its DEI hiring targets in February, with CEO Sundar Pichai telling employees that while Google wants to have a “workforce that represents that diversity” it also has to “comply with local laws,” CNBC reported.

To those corporations that have not fallen in line, Trump’s administration is sending a clear message. On Friday, the chairman of the FCC announced he had opened a probe into Disney's DEI program. Conservative activists led by Stephen Miller have drawn up a list of 45 companies that have touted DEI efforts over the past few years, according to Bloomberg.

Time for a rebrand?

Many companies are not necessarily throwing out the actual core values of DEI, but rebranding to avoid the optics of the term.

For example, JPMorgan said this month it was replacing the “equity” in DEI with “opportunity.” Only time will tell whether one letter will spare the bank from the Trump administration’s ire.

Zoom out: While some are in favor of companies focusing more on profit than social issues, others worry that straying from the tenets of DEI could hurt companies' bottom line.

“The DEI rollbacks have raised concerns among some investors, as many employers believe that diversity is good for business,” explained Hortense Bioy, Head of Sustainable Investing Research, Morningstar Sustainalytics. “In the months ahead, investors will have the opportunity to closely examine the disclosure of DEI initiatives as companies have just started to update their corporate reporting.”—LB