Brianna Wilson,
Editor,
Monitor

Diversity, equity and inclusion efforts are under fire again, and corporate America is split. Some companies are boldly and proudly standing up against the backlash, while other companies are quietly cracking under the pressure.

The hard and fast truth is some companies treated DE&I like a trend without ever really making a serious commitment, and those companies are using an anti-DE&I wave to do away with their initiatives and save money by cutting back their budgets. Companies that are truly committed to DE&I, though, are not backing down.

Last summer, the Supreme Court ruled to overturn affirmative action. While this primarily affected colleges and universities across the U.S., which can no longer consider race as a factor in admissions, the ruling served as a catalyst for a persistent wave of anti-DE&I policies and overall backlash, striking fear into companies with DE&I programs.

Much of this backlash is focused on racebased initiatives, once again falsely diminishing DE&I into a race-based practice. Equity and inclusion are notably missing from much of the current anti-DE&I rhetoric, yet the overall practice is taking a major hit across the nation.

WHAT HAPPENED LAST YEAR?
Some companies were starting to slowly phase DE&I out of their budgets prior to the Supreme Court ruling. In February 2023, Revelio Labs collaborated with the Washington Post and Reuters to reveal how the technology industry was starting to phase out DE&I, highlighting that companies may be “heading into a diversity crisis by laying off their DEI talent.”¹

Notably, a number of these companies are corporate giants, which often lead business trends, such as Amazon and Walmart. The companies in Revelio Labs’ study lost more than 300 DE&I professionals in the span of six months, from July to December 2022.

The summer 2023 decision worsened the impact of DE&I backlash. Litigation has been levied against companies and investment firms offering grant programs to historically disadvantaged groups.² Some of these proceedings also threatened legal action against companies that did not lessen or eliminate their DE&I programs.

According to the New York Times, some companies are cracking under the pressure and doing away with DE&I efforts. ZipRecruiter and Indeed’s DE&I job postings tumbled by 63% and 18%, respectively, in just one month — from December 2022 to January 2023.³ This has led many DE&I experts to label the nationwide surge in dollars allocated to and programs created in support of DE&I in 2020 as “performative,” with companies treating DE&I like a trend and either allowing it to fall to the mercy of political pressure, or using the backlash as an excuse to discard an initiative they never believed in in the first place.

COMPANIES AREN’T GIVING UP
Many companies across the nation are actively standing up against this wave of DE&I backlash. Recently, leaders from U.S. Black Chambers, The National LGBT Chamber of Commerce, the Women’s Business Enterprise National Council and more wrote a letter to Fortune 500 CEOs urging them not to crack under “frivolous lawsuits” and “political pressure.”⁴

The letter states, “It is vital that we do not allow the voices of an extreme few to outweigh the voices of the many … To do so would have dire consequences for not only your business and those you serve, but the entire U.S. and global economies.”

Additional research published in January 2024 by Littler, a law firm focused on labor and employment law, found that C-suites across the nation maintain a positive outlook on DE&I. Two key findings from the report indicate:

• Many C-suite leaders became more supportive of DE&I following the boost in legal attacks on DE&I; 17% boosted their dedication, while 36% maintained their commitment level.
• 69% of C-suites reported their companies have not altered their DE&I initiatives despite the Supreme Court’s decision to overturn affirmative action; 16% said it has not affected their emphasis on DE&I but has altered their
  strategy.

Within the report, Jeanine Conley Daves, shareholder and member of Littler’s Inclusion, Equity and Diversity Consulting Practice, says, “We’re seeing many employers maintain — or even double down on — their commitment to [DE&I], even as backlash spikes. Demonstrating that [DE&I] is part of their core values, many organizations are taking the prudent step of auditing and assessing their current initiatives, rather than eliminating them amid the challenges in today’s political and legal environment.”⁵

PERSISTENT PUSH FOR DE&I
The New York Times theorizes that some companies have “rebranded” DE&I in response to the backlash. These companies are avoiding race-based language to instead describe exactly what the company is trying to accomplish with its initiatives.² Notably, some companies are also addressing “I.E.D” rather than “D.E.I,” placing emphasis on inclusion instead of diversity — which, again, is what much of the anti-DE&I movement seems to focus on.

In a Forbes article, Shaun Harper, a University of Southern California professor, argues that “this strategy isn’t what our democracy needs right now.” He says failing to showcase how DE&I initiatives work and benefit the workforce allows the rhetoric of anti-DE&I campaigns to shine through. “What sense does it make to know something is a lie and to have examples of what’s actually true, yet deliberately hide those truths for fear of what liars might do?” Harper writes.⁶

Anti-DE&I rhetoric is born out of a misunderstanding of what DE&I is trying to achieve, which is an equal playing field for all despite identity differences. It is not excluding historically advantaged groups of people; it’s simply opening the door for others. Anti-DE&I groups also often boil the initiative down to diversity only, which is not the case at all.

Now approaching a year since the Supreme Court ruling on affirmative action, companies must continue to make noise about what DE&I is, why they’re doing it and what the positive outcomes are. Otherwise, anti-DE&I rhetoric will continue to spread through populations susceptible to believing DE&I’s only goal is to cast out historically advantaged groups.

THIS YEAR’S DE&I OUTLOOK
Forbes’ 2024 outlook on DE&I presents some ups and downs.⁷ While job postings for DE&I roles have fallen sharply and DE&I is actively under political pressure and legal threats, the article predicts the following upturns for DE&I now and in the coming years:

• DE&I is still seen positively by many employees.
• Investment in DE&I is “steady” and will likely increase significantly in the next two years.
• Organizations are still being pushed to emphasize DE&I by investors and legislation.
• Employees entering the workforce consider DE&I “non-negotiable.”

Though the current pressure on DE&I is intense, chances are it won’t last long. Companies truly committed to DE&I will continue to stand up against legislation and legal threats. Other companies will soon realize Gen Z retention is likely to depend heavily on how diverse, equitable and inclusive their cultures truly are.

CAN EQUIPMENT FINANCE LEAD THE CHARGE?
The equipment finance industry has a chance to truly serve the U.S. economy — more than it already does — by placing an emphasis on DE&I. In its inaugural Best Companies issue, Monitor found companies in the DE&I category have clear and ambitious plans to scale DE&I initiatives in the coming years. The hard work of these and other companies serves as great inspiration to the rest of the industry. The best thing to do in these unprecedented times is to be bold, create clear and useful initiatives and collaborate with fellow DE&I practitioners to lead the necessary change. •

¹Ayas, Reyhan; Tilly, Paulina; Rawlings, Devan, “Cutting Costs at the Expense of Diversity,” Revelio Labs, Feb. 7, 2023.
²Morse, Brit, “Lawsuits Aimed at Diversity Efforts Hurt Small-Business Founders,” Inc., Oct. 13, 2023.
³Kessler, Sarah, “D.E.I Goes Quiet.” The New York Times, Jan. 13, 2024.
⁴Busby, Sr., Ron, et al., Fortune 500 Letter, Feb. 7, 2024.
⁵Littler, “Inclusion, Equity and Diversity C-Suite Survey Report,” January 2024.
⁶Harper, Shaun, “Why a ‘Lay Low’ DEI Strategy Is Especially Bad Right Now.” Forbes, Jan. 15, 2024.
⁷Kratz, Julie, “The 2024 DEI Outlook.” Forbes, Dec. 31, 2023.