The ROI of DEI: navigating the blowback on diversity, equality and inclusion in business

With companies around the world—from Nissan to Walmart—rolling back on diversity, equality and inclusion initiatives, it’s a tricky time to be a DEI professional. Justified or not, DEI has become a political football kicked around at the highest levels of government around the world, and this trend shows no sign of slowing down. In 2020, Donald Trump signed an executive order targeting “race and sex stereotyping and scapegoating,” laying the groundwork for widespread attacks on diversity efforts in public institutions. On his first day in office in January 2021, Joe Biden rescinded Trump’s order and issued his own. But with Donald Trump returning to power, the ‘culture wars’ are coming back to the boardroom. Here’s how DEI professionals can manage the road ahead.

Don’t fall for over-compliance: companies are not public institutions

Where DEI programmes have been subject to government criticism, this doesn’t normally extend to the private sector. Governments can make funding decisions on public institutions such as universities. This can often have a knock-on effect. The University of Missouri dissolved its DEI office prior to legislation being implemented, and the University of North Texas reviewed DEI course materials despite exemptions for academic research. Some of this over-compliance is based upon legal ambiguities. Leah Watson from the American Civil Liberties Union, points to confusion over the Supreme Court’s 2023 affirmative action ruling. “We are very concerned about the broad chilling effect, and we see conservatives misrepresenting the status of the law in order to further the chilling effect. Overcorrections are happening, and things are being cut that don’t have to be cut.” Policies and laws such as these do create a ripple effect and put the private sector under pressure. Walmart is one of the most significant examples of reducing investment in DEI precisely due to legal challenges and internal pressure. Nevertheless, Most of the largest U.S. companies continue to champion DEI, with very few abandoning these efforts entirely. A recent analysis by the Heritage Foundation, a conservative think tank, revealed that 486 of the Fortune 500 companies still publicly affirm their dedication to DEI initiatives. It’s important for companies to remember they are not a public university. Compliance with the law is of course paramount, but business doesn’t have to follow a trend that has no legal implication. In fact, changing direction with every new administration or shift in the zeitgeist can be a reputationally damaging—and not to mention expensive—endeavour that’s likely to leave no one satisfied.

Stick to reality: calmly explain what DEI is… and is not

DEI typically encompasses measures such as employee training, resource groups, and recruitment practices aimed at increasing representation across various demographics, including race, gender, disability, and sexual orientation. Expanding candidate pools and reaching out to more diverse groups than typically work at the company is not only a strength, but part of the fiduciary duty companies have to their shareholders and stakeholders. DEI is about creating environments where all employees feel valued, respected, and able to contribute their best work. Research from the Boston Consulting Group shows DEI initiatives can boost profits, reduce employee turnover, and enhance motivation. Companies with above-average diversity on their management teams also report innovation revenue 19 percentage points higher than companies with below-average leadership diversity. Similarly, McKinsey reports that companies with diverse boards tend to outperform financially. DEI involves recognising that not everyone starts from the same place due to systemic or structural barriers. DEI initiatives aim to level the playing field to ensure fair access to opportunities. It’s not a one-time project but a continuous process of reflection, action and improvement aimed at building a better business. While DEI can often seem like it is overly focused on underrepresented groups, its benefits—like improved workplace culture, reduced turnover, and better decision-making—apply to everyone. DEI is and should be open to everyone. Everyone has a race, a sex, a background and a history. All of these can and should be celebrated. Critics may argue that DEI prioritises diversity over merit. In reality, DEI seeks to ensure that talented individuals—regardless of background—have an equal opportunity to compete and succeed. DEI doesn’t mean disadvantaging one group to benefit another. It’s about removing barriers that prevent equal participation, not penalising anyone. While DEI aligns with values of fairness and respect, it’s not inherently political. It’s a practical approach to building more effective teams and workplaces.

Are anti-DEI activists really winning?

Online activists like Robby Starbuck have been spearheading campaigns against DEI, focusing on brands popular with conservative customers, including Harley-Davidson, Tractor Supply, and John Deere. Starbuck has claimed some victories, such as Tractor Supply eliminating DEI and carbon emissions roles and Molson Coors dropping supplier diversity goals. However, experts argue that many of these changes are largely symbolic. For instance, Ford stopped participating in external culture surveys, including those by the Human Rights Campaign, and reiterated that its employee resource groups are open to all. But the company affirmed its ongoing commitment to inclusion and retains a Chief DEI Officer. Similarly, John Deere ceased supporting cultural events and revised training materials but remains committed to tracking diversity and hiring inclusively. But even with Walmart, the changes which companies have implemented are often superficial. Walmart has a long history of supporting minority-owned businesses and remains a leader in this space. This is more about risk-averse messaging than policy reversal. It makes business sense to engage the broadest range of suppliers and select the most competitive ones. Ultimately, DEI both internally and when dealing with suppliers is a risk mitigation strategy. It’s about finding the best employees and the best partners to work with, regardless of misconceptions or biased assumptions. Risk mitigation is something every company can get behind.

How to respond to public criticism

Responding to public criticism about DEI initiatives isn’t just about defending your actions—it’s about demonstrating your organisation’s authenticity, accountability, and commitment to building an inclusive culture. By acknowledging feedback, clarifying your intentions, and focusing on shared values, you can turn criticism into an opportunity for meaningful engagement and growth. Acknowledge criticism without being defensive. Critiques often stem from misunderstandings or differing perspectives, so begin by recognising the feedback and emphasising your openness to dialogue. For example, you might say, “We’ve heard the concerns raised about our DEI initiatives and appreciate the opportunity to engage in this conversation. We believe meaningful dialogue helps everyone better understand the issues at hand.” Acknowledging criticism in this way sets a constructive tone and demonstrates a willingness to listen. Reaffirming your organisation’s commitment to why DEI is important is the next step. Use this as an opportunity to articulate why DEI matters, both to your organisation and to your broader mission. Focus on the positive impacts of these efforts, such as fostering innovation, ensuring fairness, and creating a collaborative workplace culture. By sharing the “why” behind your DEI initiatives, you can help critics see that these efforts are rooted in shared values like fairness and opportunity for all. It’s equally important to clarify any misconceptions. For example, one common critique is that DEI initiatives prioritise diversity over merit. You can address this directly by explaining that DEI aims to level the playing field, ensuring that talented individuals from all backgrounds have equal access to opportunities, while maintaining high organisational standards. Countering myths with clear, evidence-based explanations helps to shift the narrative and build understanding. Highlight the broader impact of DEI on your organisation’s goals. Diversity doesn’t just benefit underrepresented groups; it drives innovation, strengthens teams, and improves customer outcomes. Sharing research or case studies that demonstrate these benefits can be a powerful way to underline the importance of your initiatives. For example, studies consistently show that organisations with diverse perspectives are more innovative and perform better financially. Transparency is another crucial element of your response. Be open about your DEI goals, the progress you’ve made, and the areas where you’re still learning or improving. Acknowledging both successes and challenges demonstrates accountability and builds trust with your audience. For instance, you might say, “We’re proud of the progress we’ve made, but we also recognise there’s more work to do. We’re committed to being transparent about our efforts, including what’s working and where we need to improve.” It’s vital to avoid escalating tensions, especially if criticism is emotional or polarising. Maintain a calm, respectful tone that focuses on shared values rather than differences. DEI can be a sensitive topic, and your goal should be to foster understanding, not to win an argument. If possible, invite critics to engage in a constructive dialogue by saying something like, “We’d love to hear more about your concerns and discuss them further. Please feel free to reach out to us directly so we can continue this important conversation.” Leveraging the voices of allies can also be a powerful way to address criticism. Ask employees, partners, or stakeholders who support DEI to share their authentic experiences or perspectives publicly. Testimonials or success stories from individuals who have benefited from your initiatives can help counterbalance negativity and illustrate the real-world impact of your efforts. Crucially, emphasise shared values. Even if critics don’t fully support DEI, they’re likely to align with principles like fairness, respect, and collaboration. Reiterating these values helps to ground the conversation in common goals. For example, you could say, “Our DEI efforts reflect our belief that everyone deserves respect and equal opportunities to succeed. We’re committed to creating a workplace where all voices are heard and valued, and we’ll continue striving towards that goal.” Criticism: “DEI is just a fad or buzzword.” Response: “I can see why it might feel that way with all the recent attention, but DEI isn’t new. It’s built on decades of research and practice that show its value in driving business success and improving workplace culture.” Criticism: “Why does DEI focus so much on differences?” Response: “DEI does highlight differences, but the goal is to celebrate them and ensure they don’t become barriers. It’s about leveraging everyone’s unique strengths to create a stronger team.” Criticism: “We should just treat everyone equally, not give special privileges.” Response: “Equality means giving everyone the same resources, but equity recognises that people have different needs and starting points. For example, providing a ramp for a wheelchair user isn’t about special treatment—it’s about ensuring equal access.”

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