The Business Case for EDI and how it Strengthens Organisations

A couple of weeks ago, President Donald Trump was sworn in for his second term, and one of his administration’s early moves was to roll back federal Equity, Diversity, and Inclusion (EDI) initiatives. Some of his supporters in Silicon Valley and other industries are echoing this stance, claiming that EDI programs undermine meritocracy, distract from business priorities, and impose unnecessary costs.?

But is this narrative backed by evidence??

Decades of research and real-world business outcomes suggest the opposite: investing in EDI is not just a social responsibility—it is a strategic imperative that drives business growth, innovation, and performance.?

EDI as a business imperative, not a political agenda?

Far from being a political stance, EDI initiatives are deeply tied to organisational performance, innovation, and long-term sustainability. The world’s most respected research institutions, including McKinsey & Company, Harvard Business Review, and Deloitte, have consistently demonstrated that diverse teams outperform homogenous ones.?

• McKinsey's "Diversity Wins" report (2020) found that companies in the top quartile for gender diversity were 25% more likely to outperform their industry peers in profitability. For ethnic diversity, that figure rose to 36%.?
• Harvard Business Review has highlighted that companies with higher levels of diversity are 70% more likely to enter new markets, thanks to broader perspectives and cognitive diversity.?
• Deloitte’s 2022 research found that inclusive workplaces see 83% higher engagement levels and 42% lower turnover rates, reducing hiring and training costs.?

These aren’t abstract ideals; they are tangible business outcomes that affect the bottom line.?

The meritocracy myth: do EDI initiatives undermine performance??

One of the core arguments against EDI - especially from conservative business leaders - is that it replaces meritocracy with identity-based hiring and promotion. Critics claim that companies prioritising diversity inevitably lower their standards for talent selection.?

This argument fundamentally misrepresents what EDI is about.?

EDI does not mean hiring unqualified candidates for the sake of diversity - it means ensuring that all qualified candidates, regardless of background, have an equal opportunity to contribute and succeed.?

A 2019 Yale study found that unconscious bias in hiring decisions leads companies to consistently overlook qualified women and minorities, reinforcing the status quo rather than true meritocracy. Companies that actively invest in structured hiring, inclusive leadership, and bias training unlock talent that would otherwise remain untapped.?

The Economic Argument: EDI as a Driver of Growth?

Beyond individual organisations, there’s a macro-level economic case for EDI investment.?

• The World Economic Forum estimates that closing gender gaps alone could add $28 trillion to global GDP by 2025.?
• A Boston Consulting Group study found that companies with above-average diversity in leadership generated 19% higher innovation revenue compared to those with below-average diversity.?
• Countries with stronger anti-discrimination policies see higher economic growth, because they maximise workforce participation across all demographics.?

At a time when businesses are seeking resilience in uncertain economic conditions, deliberately narrowing the talent pool by rejecting EDI isn’t just ethically questionable - it's financially short-sighted.?

Why This Pushback Against EDI??

The opposition to EDI isn’t really about business performance - it's part of a broader cultural and political backlash. Many of those speaking out against EDI are from privileged backgrounds that have historically benefited from the very systems these initiatives seek to reform. Some of Silicon Valley’s wealthiest figures, who argue that EDI "destroys meritocracy," have themselves built networks that overwhelmingly favour people who look and think like them.?

Additionally, in political circles, anti-EDI sentiment is an effective rallying tool. President Trump and his allies understand that framing EDI as "woke indoctrination" plays well with segments of their voter base who feel left behind by economic shifts. Unfortunately, fear-driven rhetoric often drowns out facts.?

EDI: a commitment to fairness and the future?

The core idea behind EDI isn’t radical: it’s about ensuring that everyone - regardless of background - has a fair shot at success. That’s not "woke politics"; that’s good business and good leadership.?

For organisations, the decision to invest in EDI shouldn’t be based on political pressure but on the overwhelming body of research demonstrating its benefits.?

Companies that recognise this will be the ones that attract top talent, drive innovation, and thrive in the global economy. Those who reject it risk falling behind in an increasingly diverse, interconnected world.?

So, the question isn’t "Can we afford to invest in EDI?"?

The real question should be: "Can we afford not to?"

Avtar Gill is a seasoned HR leader with over two decades of international experience across Europe, MENA, and Asia. As Chief Host Engagement (HR) Officer at Soneva and Chair of the People Committee for the World Sustainable Hospitality Alliance, he champions Equity, Diversity, and Inclusion (EDI) as a core pillar of organisational growth. His expertise in talent strategy, performance management, and cultural transformation has shaped impactful conversations on EDI and sustainability, making him a respected voice in the industry.