At the End of DEI it’s Getting Dark!

Diversity, Equity, and Inclusion (DEI) once stood as a cornerstone of corporate responsibility, driving meaningful progress toward fairer, more inclusive workplaces. Yet, in recent months, we’ve seen a troubling shift, companies, particularly in the U.S., scaling back or quietly abandoning their DEI initiatives. What was once an imperative for business success is now caught in the crossfire of political, legal, and cultural pushback.

This edition of the Strategic Sustainability Nexus explores the forces behind this retreat: the mounting political pressure, legal challenges following the Supreme Court’s ruling on affirmative action, and the shifting corporate priorities in uncertain economic times. But beyond the headlines, we’ll examine what this means for the future. Does stepping back from DEI risk eroding the progress made, or is there a way forward that aligns inclusion with business resilience?

Whether you’re working to uphold DEI in your organization or analyzing how businesses can adapt to this evolving landscape, this edition invites reflection and dialogue. The choices companies make now will shape not just their workplaces, but also the broader fabric of society. The question is: where do we go from here?

Best regards,

Michael

Table of Content:

In the Spotlight: At the End of DEI, It’s Getting Dark … But Some Companies Are Keeping the Lights On

Five Key Trends in Diversity, Equity, and Inclusion

Three Questions (You Never Dared to Ask)

Podcast Highlights: The Circular Coffee Break

Top Picks: News & Resources

Over to You

In the Spotlight: At the End of DEI, It’s Getting Dark … But Some Companies Are Keeping the Lights On

For years, Diversity, Equity, and Inclusion (DEI) has been more than a corporate buzzword, it has been a driver of innovation, employee engagement, and long-term business success. Companies embraced DEI not only as a moral and social responsibility but as a competitive advantage, recognizing that diverse teams perform better, foster creativity, and are more resilient. Yet, in the last year, we’ve seen a sharp backlash against DEI efforts, particularly in the U.S., where businesses are increasingly retreating from their commitments due to political pressure, legal challenges, and shifting economic priorities.

One of the biggest turning points was the 2023 U.S. Supreme Court ruling on affirmative action, which struck down race-conscious college admissions policies. This decision has emboldened critics to challenge DEI initiatives in the corporate world, arguing that race-based hiring, promotions, and workplace policies could face similar legal scrutiny. High-profile lawsuits and public opposition have left many companies reconsidering the risk-reward equation of DEI, fearing legal challenges, shareholder pushback, and political controversy. At the same time, economic uncertainty has caused companies to reevaluate budgets, and in some cases, DEI programs have been among the first initiatives to be scaled back. Tech giants like Meta, Alphabet, and Amazon have all reportedly dropped their DEI goals, sending a concerning signal that inclusion efforts are often seen as discretionary rather than fundamental to business success.

Despite this growing retreat, there are companies that aren’t backing down. Organizations that truly understand the value of DEI are doubling down, demonstrating that inclusion isn’t just a feel-good initiative, it’s a strategic advantage. Studies continue to show that companies with diverse leadership teams outperform their peers. The 2023 McKinsey report “Diversity matters even more: The case for holistic impact” found that companies in the top quartile for ethnic diversity in leadership were 39% more likely to outperform their industry peers financially.

Companies like UBS, BT Group, Costco and Apple prove that DEI remains a business imperative, not a political statement. UBS’ Chief Executive Sergio Ermotti emphasized that the bank's DEI policies remain unchanged, stating that these initiatives are embedded in the bank's culture and are not influenced by political changes. The British telecommunications company BT Group has reiterated its commitment to DEI, with goals such as achieving a 50-50 gender workforce balance by 2030 and increasing representation from ethnic minorities and individuals with disabilities. Costco's shareholders recently rejected a proposal to assess risks associated with its DEI practices, with the board highlighting the benefits of such initiatives in driving innovation and customer satisfaction. Apple's board has recommended that shareholders vote against proposals to eliminate DEI policies, emphasizing the importance of fostering a culture of belonging. These companies and their shareholders recognize that inclusion leads to innovation, stronger decision-making, and better financial performance. More importantly, they understand that dismantling DEI efforts today risks undoing years of progress in creating more equitable workplaces.

The backlash against DEI presents a defining moment: Will companies allow short-term pressures to erode long-term progress, or will they adapt and evolve their approach to sustain meaningful inclusion? The future of DEI may require more nuanced, data-driven, and legally sound frameworks, shifting from broad diversity goals to clear, measurable, and impact-driven strategies that emphasize inclusive leadership, equitable pay, and opportunity access. Companies that are truly committed to diversity and inclusion won’t abandon it when the climate gets tough, they will adapt, refine, and continue to build organizations where everyone has the opportunity to thrive. Let’s ensure that at the end of DEI, it’s not getting dark, but rather, we’re finding new ways to keep the light shining.

Five Key Trends in Diversity, Equity, and Inclusion

As companies navigate the evolving landscape of Diversity, Equity, and Inclusion (DEI), the conversation is shifting from symbolic commitments to strategic, impact-driven approaches. While some organizations are scaling back their DEI efforts due to political, legal, or economic pressures, others are doubling down, adapting their strategies to ensure long-term success. Here are five trends shaping the future of DEI in 2025.

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1. The Rise of DEI 2.0: From Symbolism to Impact-Driven Strategies

The era of performative DEI initiatives is ending. Companies that remain committed to DEI are focusing on measurable, business-integrated strategies that align diversity with performance outcomes. Rather than simply tracking workforce demographics, organizations are emphasizing equity-driven leadership, pay transparency, and clear career progression for underrepresented employees. Companies that are leading this shift, incorporate DEI metrics into leadership evaluations and tie executive compensation to progress on diversity goals. The focus is moving beyond hiring quotas to structural changes that ensure long-term inclusion and representation at all levels.

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2. DEI and Legal Compliance: Navigating a Changing Regulatory Landscape

The legal environment around DEI is becoming more complex, especially in the U.S., where affirmative action policies have faced legal challenges. In the wake of the Supreme Court’s 2023 decision on race-based college admissions, some corporate DEI programs are facing lawsuits or scrutiny over race-conscious policies. To navigate this, companies are restructuring DEI initiatives to emphasize economic opportunity, skills-based hiring, and inclusive leadership training rather than race- or gender-specific quotas. Organizations that remain committed to diversity are focusing on legally sound approaches such as expanding outreach to diverse talent pools, supporting supplier diversity, and fostering inclusive workplace cultures that comply with anti-discrimination laws while advancing equity.

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3. Inclusive AI and Technology: Addressing Bias in the Digital Age

As AI adoption accelerates in recruitment, performance evaluations, and decision-making, concerns about algorithmic bias are at the forefront of DEI discussions. AI tools, if not carefully designed, can reinforce systemic discrimination, from biased hiring algorithms to facial recognition technologies that disproportionately misidentify certain demographics. Companies committed to ethical AI are investing in AI bias auditing, diverse datasets, and transparency in AI-driven decisions. Many are implementing human oversight in AI-assisted hiring and ensuring that diverse teams are involved in technology development to prevent biased outcomes. Inclusive AI governance is emerging as a critical component of modern DEI strategies.

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4. The Shift from DEI Programs to Inclusive Business Models

Organizations are moving beyond internal workforce DEI to embedding inclusion across entire business models. This means considering diversity in product design, marketing, and supply chain partnerships to better serve diverse customer bases. Brands are integrating supplier diversity programs and designing products that meet the needs of a wider range of users, ensuring accessibility and inclusivity. In retail and consumer industries, companies are focusing on representation in advertising, culturally competent customer engagement, and ethical sourcing from minority-owned businesses. This shift makes DEI an integral part of long-term business resilience, ensuring that diverse communities are not just included in hiring policies but also in broader market strategies.

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5. Employee-Led DEI: The Power of Internal Advocacy

As some organizations scale back centralized DEI departments, employee-led initiatives are gaining traction. Employee Resource Groups (ERGs), affinity networks, and grassroots advocacy within companies are driving change from the ground up. In organizations where formal DEI structures are being dismantled, employees are stepping up, advocating for pay equity, inclusive policies, and greater transparency in corporate decision-making. Some companies are amplifying employee voices through leadership mentorship programs, ensuring that inclusion remains a priority even when corporate budgets fluctuate. Internal advocacy is proving that DEI is not just a top-down mandate, it’s a cultural transformation that employees are willing to push forward, regardless of external pressures.

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While some companies are retreating from DEI due to regulatory uncertainty or political pressure, others are adapting their approaches to ensure long-term sustainability. The shift toward impact-driven, legally sound, and technology-conscious DEI strategies reflects a maturing landscape, one where companies that truly value diversity are embedding it into their core business functions rather than treating it as a standalone initiative.

Organizations that navigate this transition effectively will future-proof their workforce, strengthen innovation, and remain competitive in an increasingly diverse global market.

Three Questions (You Never Dared to Ask)

1.???? Has DEI Become Just a Corporate Buzzword?

Yes and no. While some companies use Diversity, Equity, and Inclusion (DEI) as PR tools without real action, others embed it into their culture and strategy. True DEI goes beyond quotas, it’s about fostering an environment where diverse perspectives drive innovation and business success. The challenge is ensuring DEI efforts lead to meaningful, measurable change rather than being performative.

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2.???? Is DEI at Risk of Backlash?

Absolutely. In some regions, companies are scaling back DEI due to political pushback and economic pressures. Critics argue that DEI fosters exclusion rather than inclusion, but research consistently shows that diverse teams perform better. The key is shifting the conversation from compliance to business value, DEI is not just about fairness; it’s about competitive advantage.

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3.???? Does DEI Mean Lowering the Bar?

No. DEI is about widening access, not lowering standards. Hiring diverse talent doesn’t mean compromising on qualifications—it means ensuring that everyone, regardless of background, has the opportunity to succeed. Inclusion drives excellence by leveraging different experiences and perspectives, making companies more adaptable, innovative, and ultimately more successful.

Podcast Highlights: The Circular Coffee Break

The Circular Coffee Break podcast is a bi-weekly podcast dedicated to exploring the latest trends, challenges, and innovations in circularity and sustainability. Through expert interviews and in-depth discussions, we aim to provide valuable insights and perspectives to enhance your understanding and engagement. Below, you will find concise summaries of our latest episodes, capturing the essential points and conversations. We hope you find these highlights both informative and inspiring.

#46 - Engineering a greener future: Circularity in heavy industry

The manufacturing and heavy machinery sectors are often seen as slow-moving when it comes to sustainability. However, Konecranes, a global leader in lifting equipment and crane technology, is proving that circular principles can reshape even the most traditional industries.

In this episode of the Circular Coffee Break, I sat down with Anniina Virta-Toikka, VP of Sustainability at Konecranes, to discuss how the company is embedding circularity across its entire value chain. She shared how Konecranes is extending product life cycles through modular design, predictive maintenance, and retrofits, including modernizing old port cranes by electrifying them to reduce emissions.

One of the biggest sustainability challenges for manufacturers is Scope 3 emissions, which in Konecranes’ case make up more than 99% of their footprint. Anniina explained how the company is tackling this by engaging suppliers, using recycled materials like steel, and driving innovation in product design and end-of-life recycling.

Looking ahead, Konecranes is committed to net-zero emissions by 2045, embracing automation and electrification as key enablers of sustainability in industrial operations. But achieving these ambitious goals requires collaboration across the value chain, from customers to suppliers to policymakers.

How can other heavy industries take similar steps? Tune in to learn how circular principles are transforming manufacturing and what it takes to build a more sustainable industrial sector.

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#47 - How Circular is the World Economic Forum?

Circularity isn’t just about waste reduction, it’s about redesigning our economic systems to drive sustainability, resilience, and long-term prosperity. In Episode 47, I spoke with Harald Friedl, founder of the Circular Economy Innovation Agency, about what’s needed to accelerate this transition.

Harald warns that global circularity rates are declining, making it urgent to scale financial models like Product-as-a-Service and carbon trading, alongside technologies like AI-powered waste sorting and Digital Product Passports. But human collaboration is just as critical, governments, businesses, and investors must align to create systemic change.

He sees waste-free cities, circular infrastructure, and carbon-neutral industries as the future, but bold leadership and policy shifts are required to get there. Harald believes the circular economy can drive economic growth and job creation, proving that sustainability and profitability go hand in hand.

The big question remains: How do we scale circularity faster? Tune in to the full episode to hear Harald’s vision for a more circular and regenerative future.

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Top Picks: News & Resources

The Top Picks section provides a curated list of relevant and interesting news articles, reports, and resources that have caught my attention this month. The selection is designed to keep you informed and provide valuable insights into the ever-evolving landscape of sustainability.

o?? Report on DEI and Financial Performance: McKinsey's 2023 report underscores a positive correlation between diverse leadership teams and improved financial outcomes. Companies with higher diversity are more likely to make public commitments to DEI, which can enhance decision-making strategies and drive better business performance. Read more

o?? DEI in the Workplace: A 2023 survey by the Pew Research Center found that 56% of employed U.S. adults view DEI initiatives positively. The study also revealed that women and minority groups are more likely to value DEI efforts, emphasizing the importance of inclusive practices in fostering a supportive work environment. Read more

o?? The DEI Backlash - Employers 'Reframing Not Retreating': The Financial Times explores how several U.S. companies, including Meta, McDonald's, and Target, have recently scaled back their DEI programs. The article suggests that while some businesses are recalibrating their DEI efforts due to legal and political pressures, they are not entirely abandoning these initiatives. It also highlights that many executives believe DEI programs positively impact economic performance.

o?? Which US Companies Are Pulling Back on Diversity Initiatives? This piece by the Associated Press provides an overview of the growing number of prominent companies that have scaled back or set aside their DEI initiatives. It discusses the influence of political and legal challenges on these decisions and the broader implications for corporate America. Read more

o?? Challenges in Measuring DEI Effectiveness: Research from Boston University highlighted that few workplace DEI programs robustly track their impact. The study emphasized that successful DEI efforts share common elements, such as clear objectives and accountability measures, but the overall lack of rigorous evaluation makes it difficult to assess their true effectiveness. Read more

o?? Importance of Intentional Implementation: Harvard Business School research indicates that the underlying motivations for DEI initiatives significantly influence their success. Programs driven by a genuine commitment to inclusivity tend to yield better outcomes compared to those implemented primarily for compliance or public relations purposes. Read more

Over to You

Thank you for joining me in this edition of The Strategic Sustainability Nexus. The conversation around Diversity, Equity, and Inclusion is evolving rapidly, with businesses reassessing their commitments and the broader impact of these programs coming under scrutiny.

I’d love to hear your thoughts. How do you see DEI shaping the future of work and business strategy? Have recent shifts changed your perspective on the role of DEI in driving real impact? Are there approaches that you’ve found effective or areas where you see gaps?

Your insights fuel these discussions, and I always appreciate the exchange of ideas. Let’s continue challenging assumptions, exploring new perspectives, and working towards meaningful, lasting change.

Until next time, let’s stay engaged and keep the conversation going.

All the best,

Michael

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The?Strategic Sustainability Nexus?is a monthly newsletter dedicated to exploring the intersection of strategy, digital innovation, and sustainability. It offers curated news, expert insights, and highlights from the “Circular Coffee Break” podcast, aiming to deepen understanding and share best practices for a sustainable future. This newsletter is an experiment to reach more people and expand our collective impact on creating a more sustainable world.