As the war on DEI intensifies, some companies hold the line while others work behind the scenes

There’s a delicate balance playing out at corporations across America.

As the Trump administration targets diversity, equity and inclusion initiatives, many prominent companies have publicly scaled back or scrapped their programs and goals for metrics such as employee and leadership representation. Others have insisted they will continue to support DEI, opening themselves up to political pressure — but also financial opportunity.

DEI professionals told CNBC that either strategy comes with tricky pros and cons: Brands seen as advocating for DEI could face legal challenges, but they also stand to benefit from the advantages of DEI and the loyalty of customers who share their values. Brands that publicly pull back may avoid the scrutiny of President Donald Trump and his allies, but risk stirring up controversy in an increasingly polarized environment.

Some companies, fearful of moving too loudly in either direction, may continue to support DEI internally, experts said, even as they stay silent publicly in order to avoid activist campaigns against them.

“I can’t be clear enough: DEI isn’t dying. It’s evolving,” said Daisy Auger-Domínguez, founder and CEO of workplace consulting firm Auger-Domínguez Ventures.

Trump signed an executive order on his first day in office ending all DEI programs across the federal government. He issued another order a day later demanding the Justice Department identify and potentially sue “the most egregious and discriminatory DEI practitioners.”

The White House’s hostility toward DEI has elevated the stakes for corporations already grappling with how to navigate the principles of diversity, equity and inclusion amid a growing culture war, experts said.

Several companies, such as Lowe’s and Ford, had begun rolling back DEI programs even before Trump’s election victory in November. In a statement to CNBC, Ford said it was committed to a “respectful and inclusive workplace for all employees.” On Nov. 25, Walmart said it was winding down some DEI-related efforts, though in a statement to CNBC this week, the retailer said it is focused on its values of “respect, integrity, service and excellence.”

In late January, Target issued an internal memo ending several DEI-related goals and partnerships and emphasizing a program centered on “belonging.” On Wednesday, Google said it will retire its aspirational hiring targets in light of the executive orders and recent court decisions. A Google spokesperson told CNBC in a statement this week it’s “committed to creating a workplace where all our employees can succeed and have equal opportunities.”

Others, including Caterpillar and 3M, told CNBC they are currently reviewing the executive orders to assess their implications. Citigroup is also analyzing the impact of the orders, a person familiar with the process told CNBC on the condition of anonymity in order to discuss internal matters.

“What you’re seeing right now is people trying to safeguard internally the work that is necessary, because they understand not just the business but the people value of this work,” Auger-Domínguez told CNBC.

“This is not the time to be experimenting with this. This is the time to be doubling down on what’s important to your organization,” she added.

Some companies have stood firm on their support for DEI since the executive order. Costco is perhaps the most prominent example: Its board of directors unanimously opposed a proposal by the National Center for Public Policy Research, a conservative think tank, for the wholesaler to publish a report on the risks of its DEI policies. Investors defeated the proposal with about 98% voting against it, the company announced at its annual shareholder meeting Jan. 23.

“A welcoming workforce has been integral to the company’s culture and values since its founding,” Costco Chairman Hamilton James said at the meeting.

Apple is similarly resisting the think tank’s proposal for the tech giant to consider abolishing its diversity and inclusion initiatives. The measure will receive a vote at Apple’s annual shareholder meeting Feb. 25.

“We strive to create a culture of belonging where everyone can do their best work,” Apple’s board said in a statement.

Several high-profile CEOs including Bill Ready of Pinterest, Jamie Dimon of JPMorgan Chase, and David Solomon of Goldman Sachs have recently indicated that their businesses will stick with their current approaches to DEI.

Both JPMorgan and Goldman are also targets of anti-DEI proposals by the National Center for Public Policy Research.

JPMorgan directed a CNBC request for comment to Dimon’s 2024 shareholder letter, where he wrote that the company’s DEI initiatives “lead to more innovation, smarter decisions and better financial results for us and for the economy overall.” Goldman Sachs declined to comment to CNBC.

Ice cream company Ben & Jerry’s, which haslong been vocal about social activism,said in a statement to CNBC that it remains committed to supporting equity and justice throughout the company, while also calling out companies that have rolled back DEI commitments made in the wake of George Floyd’s murder by police in 2020.

“We believe that companies that timidly bow to the current political climate by attempting to turn back the clock will become increasingly uncompetitive in the marketplace and will ultimately be judged as having been on the wrong side of history,” the company said.

Outdoor apparel company Patagonia, which likewise has a history of activism for climate action, also said in a statement to CNBC that it wouldn’t be rolling back its DEI policies.

“We stand firm in support of our justice, equity and antiracism policies and practices,” Patagonia said.

Although cosmetics brand E.l.f. Beauty does not have formal DEI programs, it promotes inclusivity in its company culture and has not changed its stance on DEI, CEO Tarang Amin said in written comments to CNBC.

“This isn’t about risks or rewards, it’s about having a diverse set of views to best serve our community with exceptional products they want, at prices they can afford,” Amin wrote.

Andrew Clarke, CEO of clothing retailer Francesca’s, posted a LinkedIn video last week affirming the company’s commitment to respect and inclusion. He told CNBC that he sees DEI as having been key to Francesca’s rebound after the company filed for Chapter 11 bankruptcy in 2020.

“D&I is not an abbreviation or a mandated deliberate strategy in this organization, it’s a human strategy,” Clarke said. “The notion of inclusivity, respect and belonging and treating our fellow associates as we would like to be treated ourselves — that has been awesome for the culture, but also for the turnaround of our business from a financial perspective.”

Clarke cited a senior leadership team composed of 69% women and employee policies such as a flexible dress code as examples of how Francesca’s centers inclusivity. Although he said he is mindful of potential legal limitations from recent White House policy, he said the company will continue the strategies that have made it successful.

Even if brands are staying silent or rolling back their external goals or messaging, DEI experts told CNBC, they may still be working to promote diversity and inclusion within their companies.

Amira Barger, executive vice president and head of DEI advisory at Edelman, said businesses’ approaches to DEI might look more like they did before 2020, when many companies were quick to issue public statements and launch programs in support of DEI and social justice in the wake of Floyd’s murder and the national demonstrations it sparked.

DEI programs boost talent retention and consumer loyalty, Barger said, adding she doesn’t expect corporations to end them entirely. Researchers have identified relationships between corporate DEI and benefits such as adaptability and financial outperformance.

“I do think we will continue to see companies be less vocal, but I think people should take a pause and really ask more questions, because I do think many of these companies are still quietly doing the work behind the scenes,” Barger said.

Some companies have been rebranding and renaming their diversity, equity and inclusion initiatives. Eloiza Domingo, CEO and founder of consulting firm FourTen and former chief DEI officer and vice president for human resources at Allstate, said she’s seen an increase in the use of terms such as “belonging,” “cultural competency” and “employee engagement” in place of the typical acronym DEI.

As someone who’s worked with companies on DEI, Domingo said, she’s empathetic toward those companies that are reconsidering their external DEI strategy. She said she’s grappling with that issue for her own business, as she works on attracting more clients.

“I’m known as a diversity keynote. I’m known as a changemaker. Now, that is under not only scrutiny but under attack,” Domingo said. “And so what do I do as an entrepreneur to keep my business going, but also to feed the kids? That’s really, really scary.”

In a Jan. 6 statement titled “Our Commitment to Inclusion,” McDonald’s announced it was retiring “aspirational representation goals,” participation in external DEI surveys, and its supply chain DEI pledge. It also changed its diversity team’s name to “Global Inclusion Team.”

The fast food giant faced immediate backlash, leading to McDonald’s Executive Vice President and Chief Legal Officer Desiree Ralls-Morrison defending the company in a LinkedIn post. Ralls-Morrison asserted that many critics hadn’t fully read the statement, which also said that McDonald’s had met its targets in areas such as gender pay equity and supplier diversity and that the company was “proud of our incredible accomplishments in this space and excited to continue our inclusion journey.”

“McDonald’s was suggested in the headlines as having killed DEI,” Barger said. “It is much more nuanced. I think they strategically rebranded their approach.”

Ralls-Morrison and McDonald’s didn’t respond to requests for comment.

Sina Port, a brand strategist and diversity consultant, said businesses that aren’t publicizing their DEI policies can still communicate their support for inclusion to consumers — without being overly performative or making empty commitments.

She cited actions such as promoting the personal brands of diverse employees and creating products that are actually useful to communities, such as sports equipment for people with disabilities.

“In general, I’m not a huge fan of just making announcements to customers. I look more at the action that you’re taking,” Port told CNBC.

It’s too soon to determine whether companies currently taking stances on DEI will see an impact on their stock or revenue, Barger said, but she expects some consumers will make buying decisions based on the company’s values.

“In these moments we’re going to be tested in terms of consumer loyalty, every brand,” Barger said.

Activist campaigns targeting specific corporations have had a demonstrable impact in recent years.

Backlash against Bud Light’s partnership with transgender influencer Dylan Mulvaney in 2023 contributed to a sales slump for the brand that resulted in Bud Light losing its long-held status as the top-selling U.S. beer.

Target said a boycott of the retailer over its Pride merchandise that same year hurt its sales. The company had offered Pride merchandise for years prior to the boycott.

DEI supporters are hoping to leverage the same influence for their cause.

Civil rights activist the Rev. Al Sharpton, founder of the National Action Network, has organized two “buy-cotts” at Costco, in which the organization mobilized people to shop at the wholesaler to support its pro-DEI stance. The two events collectively brought in more than 400 shoppers, he told CNBC. Sharpton said NAN is planning more shows of support at Costco and other businesses.

The organization is also actively researching companies to boycott for their DEI policy rollbacks, Sharpton said, adding that NAN is specifically looking at corporations that have small profit margins and a significant Black consumer base. The group also plans to buy stock in these companies and submit shareholder proposals.

“We’ll support those that support us.
We believe that corporations have the right to decide their policy, but we have the right to decide who we’re going to patronize,” Sharpton said.

— CNBC’s Melissa Repko and Jennifer Elias contributed to this report.