Five years ago, in the wake of George Floyd's murder and the sweeping reckoning on racism it sparked, corporate America rushed to join in.
Big businesses started making big — and expensive — promises to fight racism and increase diversity. Walmart, the world's largest company, spent $100 million on a new center on racial equity — and that was just one of many such investments.
All told, the country's largest companies pledged almost $50 billion toward addressing racial inequality in the year after Floyd's death, The Washington Post estimated in 2021. And their CEOs announced these promises with solemn rhetoric about their companies' roles in fixing societal problems.
"We want to address systematic racism in society head-on and accelerate change," Walmart CEO Doug McMillon said in June 2020.
But today, corporate America is rushing just as quickly in the other direction. Mounting political and legal attacks have turned DEI — "diversity, equity and inclusion" — from a corporate rallying cry to a politically-toxic football.
Many big companies had been backing away from their diversity promises even before President Trump was re-elected. After long criticizing DEI, Trump last month signed executive orders that will terminate what he calls "illegal" DEI programs and policies throughout the federal government. He called the programs "radical and wasteful" and discriminatory against non-minorities who, he says, are denied opportunities and recognition as a result.
Trump continued these criticisms last week, suggesting — apparently without evidence — that DEI programs at the Federal Aviation Administration were to blame for a deadly airliner crash.
It may seem that big companies are just adapting to political and legal pressure, but diversity experts also blame a more fundamental failure: Many businesses didn't think through their pledges — or their costs — from the start, they say. So corporate America may have never gotten DEI right in the first place.
"What we're seeing in the moment is the few companies who took it to heart … and the many who just wanted to sprinkle some DEI on top, especially after George Floyd," says Portia Allen-Kyle, who runs the racial justice nonprofit Color of Change. "And that was never going to be a viable strategy."
Allen-Kyle is pretty pessimistic these days about the future of DEI in corporate America, and the fallout for Black and other minority workers.
But some diversity experts see a silver lining from the scrutiny: They hope that companies that care about building fairer, more inclusive workplaces are rethinking their strategies — and may now finally have a chance to get it right.
How corporate America retreated from DEI
Conservative critics have long claimed that DEI is itself discriminatory. But these attacks picked up momentum in 2023, when the Supreme Court overturned affirmative action at colleges and universities, ending the consideration of race in college admissions.
That ruling handed a powerful legal weapon to anti-DEI voices like Robby Starbuck, a social-media influencer who has successfully pressured several big companies to end diversity-focused programs. Starbuck has said he is focused on ending "wokeness" in corporate America, and has posted on X that his activism will give workers "a neutral workplace without feeling that divisive issues are being injected."
Now President Trump's efforts to end DEI in the federal government are expected to ripple into the private sector. Walmart, Meta, Amazon, and many others have already joined the retreat, ending many of their 2020-era pledges and programs. For example, Walmart in November said it won't renew the funding for its racial equity center and that it will end some other diversity-focused programs.
"We remain committed to creating a culture where everyone can be successful, and ensuring we are a Walmart for everyone," a company spokesperson tells NPR.
The other companies have said similar things. For example, in a note shared with NPR, Amazon executive Candi Castleberry told employees last year that "we remain dedicated to delivering inclusive experiences for customers, employees, and communities around the world." (Meta did not respond to a request for comment.)
The "business case for diversity" is complicated
Under the political headlines, there's a more subtle undercurrent at work.
When Floyd was murdered, many big companies were already promoting themselves as leaders in society, not just business. This widespread trend was known as "stakeholder capitalism": Companies argued that they could do more to help workers, society, and the planet — while also making more money for investors.
But many experts saw this rhetoric as fundamentally flawed — and, it soon turned out, largely ineffective. Paying workers more inevitably costs money, and cuts into short-term profits; so does turning down business opportunities that could have a negative impact on the environment. Meanwhile, CEOs who take stands on social or environmental issues risk drawing the ire of politicians and customers who disagree.
"It is always going to be difficult, if you are a for-profit publicly traded company, to have your leader talk about anything other than maximizing profits," says Sekou Bermiss, an associate professor of strategy and entrepreneurship at the University of North Carolina at Chapel Hill. "That is, in the U.S., the way we are wired."
But when Floyd was murdered, big companies had raised the expectations of employees and customers that they would take a stand. And Bermiss argues that many rushed into promises without thinking through the costs — or what made the most sense for each individual business. Instead, some companies relied too much on the prospect of financial rewards for DEI programs, or what became known as "the business case for diversity."
"It was being pitched as, 'Diversity is always going to help the bottom line,' Bermiss says. "But no one [who studies this] would ever say that."
Indeed, although some analysts have made the business case for diversity, Bermiss's research has found that when companies increase the diversity of their executive teams, they generally don't see a financial impact — good or bad.
The "ethical case for diversity" is stronger
Still, Bermiss and others point out that DEI policies can have significant business impacts, even if they're not apparent in short-term financial results. Having a more diverse team can help create products that appeal to more consumers, or help employees feel more satisfied with their jobs.
Costco, for example, recently told investors that its DEI efforts "help bring originality and creativity to our merchandise offerings" and "enhance our capacity to attract and retain employees who will help our business succeed," among other benefits.
The massive retailer, which also calls DEI part of its "code of ethics," successfully brushed off an anti-DEI shareholder proposal last month. Meanwhile, JPMorgan Chase CEO Jamie Dimon, who runs the nation's largest bank, has called DEI "good for business; it's morally right; we're quite good at it; we're successful."
It probably helps that both JPMorgan Chase and Costco are financial powerhouses, whose profits and share prices keep their investors happy. But both companies are also framing their DEI policies as a matter of morality or ethics, rather than just profits.
That's exactly how more companies should be thinking about DEI, according to Bermiss — if (and only if) they see it as valuable. Bermiss acknowledges that not all companies will want to continue pursuing greater diversity, equity, and inclusion. But he argues that if business leaders decide that pursuing such workplace goals is morally right and aligned with a company's values, then they'll be better able to stand up to criticisms or attacks.
And, as he adds, that's firmer ground than hoping that "if we get two more Latinos on the board, our stock price will go up."
Some DEI work will continue — by any other name
Despite the ongoing pressures, Costco and JPMorgan aren't the only employers still spending money on DEI. In fact, some companies are ramping up: Paradigm, a tech consultancy that advises employers on diversity and inclusion, says it saw a 12 percentage-point increase last year in how many of its customers had dedicated DEI budgets.
Paradigm CEO Joelle Emerson says that even companies that are ending DEI programs may rebrand the work rather than abandoning it altogether. Corporate America's diversity results have been "a mixed bag," she adds, "in part because companies often spent too much time and energy on initiatives that didn't have a measurable impact."
Now she's hoping that employers are taking the time to create more thoughtful — and effective — programs to increase fairness.
"I see this less as a rollback of DEI and more as sort of an evolution to the next phase of this work," Emerson says.
Many of the companies ending DEI programs are scrubbing the now-politically-toxic acronym from their websites and corporate statements. But their public statements insist that they still want to make everyone feel included.
That could be a tricky balance, especially as the Trump Administration continues ramping up attacks on DEI — including efforts to uncover rebranded diversity efforts inside of federal agencies.
And it remains to be seen whether corporate America can really be more effective while softening its language — and goals — around diversity, equity, and inclusion. But Emerson, at least, is bullish.
"I'm actually pretty optimistic about the future of this work," she says. "I'm not optimistic about the acronym DEI — nor do I particularly care."
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