A wave of companies in the US have decided to roll back their ED&I policies in the past month, ahead of the inauguration of Donald Trump.

This has included large companies such as Meta and Amazon pulling back from various hiring and training initiatives, with the former citing a "shifting legal and policy landscape".  

What is causing this backlash against ED&I in the US?

Our affiliate in the US, Elena Paraskevas-Thadani of EPT Legal, has given us a really insightful back and forth on this point. It’s fascinating how we see it differently.  

The US has had a proliferation of mandated anti-harassment and non-discrimination training for far longer than we have in the UK. Programmes were well established in the 90s. Many were forced on employers by their customers or clients requiring them for firms in their supply chains, rather than being adopted by choice. Much of the training has an obvious tick box feel and is perceived by many to be ineffective.    

Also, the US has always had a far greater focus on affirmative action, on quotas and positive discrimination than the UK. Both systems aim to combat discrimination, but they approach it with different emphases. The US system focuses on equal treatment, while the UK system focuses on ensuring fair outcomes for all.

As a result, it’s probably easier to react to training and to initiatives aimed at achieving quotas as an outright personal attack, and to respond in a manner akin to “road rage” (in the words of our US Affiliate).

The societal context in the US today is also important. All three branches of the US government: the judicial, legislative, and incoming executive, have, in some very public recent cases, spoken critically of ED&I programmes. Donald Trump is a vocal critic of ED&I policies; a spate of recent court cases and executive actions have been used by critics of ED&I to argue that ED&I calls for preferential treatment of some groups over others.

US companies also live in fear of the threat from activists who successfully push the “Go woke, go broke” agenda, resulting in serious boycotts. Apple’s recent skirmish with the NCPPR (a conservative lobbying group) is informative. Apple presented a firm stance to its investors, advising them to vote against the NCPPR’s proposal demanding the cessation of its ED&I programme.  

NCPPR warned Apple that the recent Supreme Court decision against race-based affirmative action in colleges could set a precedent affecting corporate ED&I policies. Apple’s retort was that the proposal was unnecessary, it already has a well-established compliance programme.  

Apple is far from alone in being a major US corporate to restate its belief in ED&I: Citigroup, Costco, Coca Cola and John Deere have done so too. But, without doubt, recent developments in the US have shown that certain programmes that fall under the ED&I umbrella can lead to liability or potential liability. Companies operating in the US need to revisit the programmes they run as the risk profile changes. Remember, risk avoidance inspired ED&I programmes in the first place.    

What about the UK?

ED&I isn’t dead or dying, in the US or the UK.

The acronym has become charged in the US for the reasons stated. The UK’s system is less easy to condemn as one centred on unequal, preferential treatment, but it won’t offer UK’s ED&I programmes full protection from the same media heat.  

UK politicians including Kemi Badenoch, Robert Jenrick and Nigel Farage have not been slow to include ED&I programmes in their culture wars; they pay no heed to nuance and to the different focus of our legal system. And, of course, our media is globalised: Elon Musk is a frequent commentator on the actions of the UK government.  

What hasn’t changed is that anyone falling foul of discrimination law in either jurisdiction faces serious financial, regulatory and reputational consequences. As Apple made clear in responding to the NCPPR, ED&I is about compliance too.  

It’s also important to remember that there is a different direction of travel legislatively, both in the UK and the EU; the Labour Government in the UK has already presided over the introduction of a proactive duty on employers to take reasonable steps to prevent sexual harassment. It’s planning to continue running counter to the ED&I rollback in its Employment Rights Bill.  

Labour made manifesto commitments that will extend ED&I protections. Its plans to protect workers from harassment by third parties is a case in point. It’s not difficult to see where Elon Musk will stand in a debate centred on whether pubs should ban their customers from discussing trans rights or other politically charged issues to protect their workers.  

The EU’s Corporate Sustainability Reporting Directive requires reporting in relation to  ED&I and it indicates that different direction of travel. It will be interesting to see what happens geopolitically. And with Regulators too, as we await significant responses in this area from the FCA.    

What will happen next? What role will HR play?  

Firms in the UK, particularly those whose values, mission or purpose centrally weds them to diversity and inclusion, are already facing a dilemma. What to say, how to respond to the reported US rollback from ED&I. Many of their employees will be seeing what Musk, Zuckerburg and Trump are saying, hearing it from UK politicians and media figures too, and wondering about the panoply of ED&I statements that their employers have made in recent years.  

We  predict a period of soul searching by UK firms. And we suggest that the role of HR leaders here is central. The truth is that there is a solid body of evidence to support the key principles of ED&I as being enablers of business. That, and how to package (or rebrand) this truth needs to be at the centre of boardroom discussions in the coming months. The arguments in favour of ED&I and the articulation of this message is what has been missing in the debate.  

It also feels important to ask the people you employ for their views on ED&I. There is a clearly held view that much of this is generational; that perhaps the demographic who are employed value ED&I initiatives more. Perhaps that is something to test. But that will require companies to be clear about what specifically they are proposing and what they stand for.  

In all likelihood: in the medium term, the US in particular will see certain programmes discontinued and others renamed. There will also be a widespread rebranding; the core principles of ED&I - ensuring respect and fairness for everyone in your workplace irrespective of their background - are likely to continue.   

But unless firms get ahead of this, they are likely to come under intense pressure, possibly orchestrated by the UK equivalent of the NCPPR, to abandon some important initiatives that do much to mitigate people risk as well as drive engagement and opportunity.  

Our sense that what we will see will be a rebrand, not an abandonment, is supported by close analysis of recent announcements from the US. Zuckerburg was clear: he still believes in inclusive workplaces. Meta’s statement said they “will no longer have a team focused on ED&I”, but they pledged to continue to have “the best teams with the most talented people”; their former Head of ED&I, Maxine Williams, is now in charge of Accessibility and Engagement. That’s what ED&I is at its core.  

McDonald’s announced that it was retiring the practice of setting aspirational representation goals, while maintaining their focus on continuing to embed inclusion practices that grow their business. They talked about a more integrated discussion with suppliers about inclusion as it relates to business performance; also that they would now be referring to their diversity team as the Global Inclusion Team.  

Both firms (and those in the UK too) will be finding ways to get the best people, from a diversity of backgrounds, which requires them to broaden their searches to include all applicant pools, but they want to do it in a way that does not expose them to risk.  

And they have to keep the legal and regulatory landscape in mind when assessing what those risks are. 

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