The year 2024 was rather bad for DEI. A slew of big brands – John Deere, Jack Daniels, Black & Decker, Ford, Toyota, Zoom and even Walmart – distanced DEI from their social engagement. What is noteworthy is that this was done publicly.
Could 2025 be any different for DEI?
Y2025 dawned somewhat ominously for DEI.
In that, the latest to follow is McDonald’s…the largest fast food chain!
On January 6, 2025, CNN online (https://edition.cnn.com) reported that McDonald’s is ending some of its DEI practices. McDonald’s has not removed all DEI practices entirely, but only specific cases (Supply Chain DEIs and participating in external surveys that measure McDonald’s corporate diversity).
While this was a one-off announcement, the groundswell of reactions in global DEI/sustainability (that has already been facing conservative headwinds) to McDonald’s decision capped an already gloomy outlook on big brand DEI “dis-engagements” that have been ominously trending in 2024.
McDonald’s announced:
“…following our comprehensive review, we also identified a few practices that we plan to modify.
- We are retiring setting aspirational representation goals and instead keeping our focus on continuing to embed inclusion practices that grow our business into our everyday process and operations. We are pausing external surveys to focus on the work we are doing internally to grow the business.
- We are retiring Supply Chain’s Mutual Commitment to DEI pledge in favor of a more integrated discussion with suppliers about inclusion as it relates to business performance.
- We are evolving how we refer to our diversity team, which will now be the Global Inclusion Team. This name change is more fitting for McDonald’s in light of our inclusion value and better aligns with this team’s work.” (From https://corporate.mcdonalds.com )
The corporates’ distancing from DEI are not random acts but are results of other developments that have significant impacts on the DEI / Sustainability sphere.
Firstly, the Corporates themselves are distancing from DEI –such as John Deere, Jack Daniels, Black & Decker, Ford, Toyota, Zoom and Walmart -as mentioned above.
Second, the legal landscape. In June 2023, the US Supreme Court struck down affirmative action in college admissions. With this, the already brewing conservative backlash against woke started spilling over, flowing all the way to DEI. By the end of 2024, more than 60 lawsuits that dispute DEI, have been filed in US consequent to US Supreme Court decision. Elon Musk, on his own X (formerly Twitter) wrote: “DEI is just another word for racism.”
Third, the research findings. Despite the belief that diversity and inclusion practiced by a company contributes to its profits, there appears to be “no scientific relationship between a corporate board’s diversity and its profits!” In March 2024, Jeremiah Green and John R. M. Hand published their study findings that debunked previous study by McKinsey (2015; 2018; 2020; 2023) that showed “positive relationship between the earnings before taxes of some large public firms and the racial/ethnic diversity of their executives.”
Jeremiah Green and John Hand said: “Our inability to quasi-replicate their results suggests that despite the imprimatur given to McKinsey’s studies, they should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”
Fourth: The DEI setbacks in academia…the University of Michigan’s D.E.I. Experiment stands out. A New York Times investigation found that University of Michigan’s ambitious DEI program at an eye watering cost of US$250 Million, has resulted in “increased discord and division on campus.” University of North Texas said that it is restructuring its
Multicultural Center and Pride Alliance into “the student affairs office.” Texas A&M University closed its diversity office while Florida International University, University of Kentucky, Northern Kentucky University, University of North Carolina Wilmington, University of Nebraska (Omaha), and University of Oklahoma too followed suit.
That said, not all hope is lost for DEI….there’s still light at the end of the tunnel.
