The politicians, provocateurs and think tanks that in the past few years have worked to dismantle diversity, equity and inclusion may not appreciate the full consequences of their efforts.
They’ve used a variety of tactics, in the public and private sectors, including White House executive orders; lawsuits or the threat of lawsuits; shareholder proposals; and needling on social media. They’ve notched high-profile wins, most notably the Supreme Court’s ruling against affirmative action and capitulation at several companies, including retailers and brands that have ended or scaled back their DEI programs.
The successful challenges, inevitably, are forcing scrutiny of DEI practices. But they also provide an opportunity to reinforce DEI goals and execution, which David Glasgow, executive director of New York University’s Meltzer Center for Diversity, Inclusion, and Belonging, sees as a silver lining.
Indeed, the victories are hardly universal. Because diversity, equity and inclusion are good for business for a variety of reasons, most companies are not abandoning DEI. So far in 2025, Target, Nike and Costco are among those that have defended at least some aspects of their policies (in Costco’s case, vociferously). As the Heritage Foundation, a major DEI foe, noted in November, most Fortune 500 companies continue to publicly commit to DEI.
“It is a time for companies to refine and strengthen their inclusion efforts in ways that reduce the risk in the short term — because the risk is real, and we know that — and in ways that are sustainable in the long term,” said Adrienne Pulido, vice president of inclusion insights at Kantar. “So it is looking at both ends of the spectrum, in terms of being very clear about what inclusion means to their business.”
What DEI is and isn’t
DEI is being pilloried as discriminatory and unfair, yet these systems are designed to create a business that is neither. That is, a business where employees have a variety of backgrounds and perspectives (diversity); hiring, promotion and other actions are executed fairly (equity); and the culture is comfortable and inviting to all who work there (inclusion).
“Unpacking what DEI is and what inclusion is, is part of this moment we're in and part of the conversation that companies need to have about their strategies,” Pulido said by video conference. “What does DEI mean to the business itself? What does it mean to the business and to the future business? Because the demographics of the country are changing, and our research shows that inclusion as a concept, as an idea, is very popular among Americans of all backgrounds.”
DEI goals for most companies are more important than ever because the markets for their products and services are more diverse than they were a decade or more ago, according to Effenus Henderson, who has worked in recruiting, staffing and succession planning at companies in the U.S. and abroad since the 1970s.
“This attack is amplified through the use of social media and technology and psychometrics, where emotions get aroused and reinforced,” he said by phone. “But fundamental to all this is that DEI is not about creating systems that are discriminatory, or about quotas, or a focus on one thing at the exclusion of others. I don't think organizations have really done that. What they have been doing is really trying to expand participation because of the growing demographic change that we're seeing.”
The need to develop DEI strategies that fit with and further business strategies dictates the involvement of leadership, according to Henderson. Too often, though, they are left to the human resources department, leaving companies at risk of adopting DEI programming that is ineffective and possibly indefensible.
“The companies that are able to navigate this generally are the ones where leadership has spent the time talking about it,” he said. “It's not just about reacting to the George Floyd situation or to civil rights laws or litigation. It's really, ‘How do we integrate this as a part of the DNA of who we are as an organization?’ If your organization is more performative, then they don't really understand how it helps to shape business strategy and policy.”
DEI should be treated like any other strategic priority, according to Tim Heneveld, country director for Pergolux in North America. With DEI under the spotlight, it’s a good moment to reassess whether hiring, workplace environment, leadership and operational strategies fit with broader aims.
“That means setting measurable goals, using data to track impact, and holding leadership accountable,” Heneveld said by email. “Some organizations are feeling pressure to scale back DEI, but I think doing so would be shortsighted. Instead, companies should refine their DEI strategies, aligning them with long-term business goals rather than reacting to what they are seeing in the media or any other outside factors. I've experienced, firsthand, workplaces can attract top talent, strengthen their teams, and improve retention.”
In some cases, companies are continuing with their DEI efforts, but changing the names of their initiatives or titles of their employees, experts said.
Crafting DEI initiatives and training is always a work in progress because businesses, markets and demographics evolve, according to Henderson. For many companies, that may mean avoiding those three letters of the alphabet, or the words “diversity, equity and inclusion.” But that, too, requires some thought, he said.
“Is continuing to refer to it under those banners still appropriate, and if I look at renaming it, am I doing that to help enhance our appeal to the markets of the customers and employees we serve? Are we doing it as a reactive, defensive thing for a short-term issue that's hot and heavy right now?” he said. “Get clarity around your objectives, the alignment with your strategies, and then decide whether how you are framing it today will work for you tomorrow and the day after. At some companies, it may mean one thing, and to others it may mean something else.”
The legal concerns
The list of lawsuits against DEI programs tracked by the Meltzer Center is long, and getting longer.
Most of these claims invoke civil rights laws intended to end or prevent unfair hiring practices or contracts. Frequently that includes Title VII of the Civil Rights Act, barring discrimination based on race, color, religion, sex and national origin; Section 1981 of the federal code barring discrimination in contracts; and the U.S. Constitution’s equal protection clause, according to Glasgow. The Meltzer Center advises companies to avoid DEI practices that give preference to members of certain groups and involve a tangible benefit.
Evaluating whether a company’s DEI programs run afoul of the latest interpretations of these codes entails enlisting attorneys or other compliance experts.
“This has become a thriving legal practice area,” Glasgow said.
Any business strategy should always be grounded in risk mitigation, and this is just another place for companies to check, according to Henderson. Companies may learn that, to avoid risk, certain aspects of their DEI programs should change.
Others may find that they pass muster. In its proxy statement urging shareholders to vote against a proposal that could have weakened its DEI programs, Costco’s board of directors made clear that the retailer regularly evaluates its “practices concerning compliance with law, including evolving Supreme Court decisions.”
In describing how Costco obeys the law and does not discriminate in hiring, promotion and other practices, the board also provided a litany of protected statuses. This is a reminder that, while civil rights statutes are being leveraged to overturn DEI practices, they nevertheless do bar discrimination for a host of reasons. Moreover, any company that does business abroad will encounter antidiscrimination law that isn’t being disrupted by political activism the way it is in the U.S., Henderson said.
“If you look at Canada, Europe, Asia and South America, there are regulations and laws that support and value diversity,” he said. “So backing away from DEI may, in fact, create harm for your business strategies in other parts of the world. It's not a simple answer, and it just depends on who you are.”
While it may seem like DEI programs are quickly getting scrapped in order to avoid controversy, most are simply under review, Glasgow and others said.
“I think it's prompting a much deeper reflection within companies, not just on what is strictly legal or illegal in what we're doing, but on what has been working and what has not been working,” Glasgow said. “Could we be doing this work more effectively, in a way that actually helps us achieve our business goals, or helps us create the kind of culture that we want to create? Are there things that have been low impact, or maybe even have a negative impact, that we should get rid of, even if it's not for legal reasons? I think the moment that we're living in now could be a helpful reset moment for the field.”
