Diversity backlash: A worrisome reversal of course

By Sofía Pérez Gasque Muslera

The diversity and equity wave that flooded U.S. companies in recent years appears to be receding. More and more companies are scaling back or eliminating their Diversity, Equity and Inclusion (DEI) programs altogether, generating intense debate about the implications of this decision.

Why this change?

The reasons behind this phenomenon are multiple and complex:

• Political pressure: The current political climate, marked by growing conservatism and polarized discourse, has generated a less favorable environment for DEI policies. Companies, seeking to avoid controversy and possible boycotts, choose to adopt more neutral positions or even align themselves with conservative tendencies.
• Economic pressures: Some companies argue that DEI programs are costly and do not generate a measurable return on investment in the short term. In a challenging economic context, they prioritize other initiatives that they consider more profitable.
• Fear of lawsuits: The fear of facing lawsuits for affirmative action or quotas has led some companies to be more cautious in their diversity initiatives, seeking to avoid potential litigation.
• Fatigue with "woke culture": A growing rejection of "woke culture" and identity politics has led some companies to distance themselves from the policies associated with this trend, fearing to alienate part of their customer base.
• Shareholder pressure: Some activist shareholders pressure companies to focus on maximizing short-term profits and reduce spending on programs they do not consider directly related to financial performance.
• Difficulty measuring impact: Measuring the impact of IED programs is complex and often relies on long-term indicators. The lack of clear and robust metrics can raise doubts about the effectiveness of these initiatives.

The elimination of IED programs has direct consequences for women:

• Fewer opportunities: Women, historically underrepresented in many sectors, will be affected by the reduction of programs designed to promote their advancement and participation in leadership positions.
• Increased inequality: Without IED policies, the gender wage gap and inequality in access to opportunities could increase.
• Rollback of progress: Women have made significant gains in recent decades thanks to IED policies. Reversing these programs could mean a reversal of these gains.
• Less inclusive work climate: A less diverse and inclusive work environment can generate feelings of isolation and discrimination in women, affecting their well-being and productivity.

The future of DEI policies in U.S. business is uncertain. Polarization is likely to increase: The debate over IED policies will continue to polarize society and the business world and there will be increased pressure on companies: Companies will face increased pressure from consumers, employees and shareholders to maintain their commitments to diversity and inclusion.