Will DEI bounce back or will it die?

European framework

Regulations like the EU's Equality Directives provide a strong legal foundation for DEI initiatives and are less likely to be directly impacted by US policy changes. For example, ever-evolving environmental, social, and governance (ESG)-related regulations, such as the European Union’s Corporate Sustainability Reporting (CSRD) directive (which introduces specific reporting requirements in regard to DEI), help further highlight the importance of DEI, prompting EU entities to acknowledge and integrate this aspect within their structures. 

While the current US political climate may result in short-term uncertainty, particularly for American-owned entities in Europe, the EU’s solid regulatory framework ensures that DEI will, at the very least, remain a necessary consideration. On the other hand, the complete and uncritical removal of these policies in Europe could serve as a basis for employee claims related to the employer's insufficient action against discriminatory practices in the workplace.

What is more, European consumers and investors often prioritise ethical and inclusive practices. Companies may face market pressure (also stemming from consumers expressing their opposition to blind imitation of current US trends) to maintain DEI efforts to uphold their reputation and comply with stakeholder expectations. Ironically, this could lead to a competitive advantage for European companies that continue to prioritise DEI.

We should also mention that the rollback of DEI in the United States has faced international criticism (from, amongst others, Human Rights Campaign) which could reinforce European companies' commitment to maintaining their DEI initiatives. This criticism might also encourage European policymakers to strengthen their support for DEI.

America divided

According to a report by Resume.org, by early 2025, about 1 in 8 companies plan to eliminate or reduce their DEI programmes due to political changes, economic pressures, or a lack of measurable return on investment. Approximately 11% of companies that have maintained or reduced DEI funding are likely to eliminate these programmes later in 2025. 

Although many big-name US companies like Pepsi, Disney, Google, Meta, and Amazon have all openly announced or hinted at a shift in their approaches to DEI, there are also many willing to stand firm and maintain their DEI commitments. Apple, Ben & Jerry’s, Costco, Delta Airlines, JPMorgan Chase, Lush, and Microsoft have all resisted pressure to abandon DEI efforts, rejecting proposals to dismantle these programmes. 

Microsoft Chief Diversity Officer Lindsay-Rae McIntyre said, “I’m thinking about the importance of continuing our diversity and inclusion work, expanding empathy, and anticipating the needs of all our stakeholders, both within Microsoft and beyond … A workforce strengthened by many perspectives, experiences, and backgrounds is critical to our innovation.”

DEI’s return from death

Despite some US rollback, European regulations and societal values are likely to sustain a focus on DEI. This could lead to a divergence in corporate practices between the US and Europe, with European companies potentially gaining a competitive edge in terms of reputation and talent attraction.

It is easy to quote statistics, but 2023 research by McKinsey tells us of the financial advantages of diversity, with organisations boasting gender-diverse executive teams being 39% more likely to achieve superior financial performance, not to mention the fact that women work far better in a workplace that is gender-blind. This is especially important as, according to the American Bar Association (ABA), 56.2% of law school students are women, outnumbering men in law school attendance, and the gap is growing every year. This is in contrast to the proportion of partners in law firms; the UK’s Solicitors Regulation Authority puts the proportion of female salaried partners at 47% and full-equity partners at 32%. Gender diversity in the workplace has never been more relevant.

Diversity naturally expands beyond gender and includes ethnicity, disability, sexual orientation and more. All of these factors continuously prove their value in providing new perspectives and shaping innovative strategies in business. As younger generations enter the workforce, DEI culture is becoming not just a preference, but an expectation. According to 2023 research from EY, 73% of Gen Z expect a diverse and inclusive work environment from their future employer, with Millennials further behind at only 68%. Companies not willing to focus on DEI risk losing top talent and being outpaced in a competitive market.

DEI is necessary to foster innovation and help businesses thrive, yet it is difficult to say with certainty that its stand is entirely immune to external forces. The shifting political climate may create a potential rift between those standing firmly on DEI and those scaling back on their commitments. With major changes unfolding rapidly and constantly, it is crucial to stay vigilant and keep a close eye on developments in DEI.

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Agnieszka Pytlas is Managing Partner at Penteris, a stand-out leader in corporate and employment law, and an officer of the International Bar Association (IBA), recognised for her vision, innovation, and impact. 

Emilia Łowczyk is most comfortable navigating regulatory requirements with an emphasis on data protection and employment matters.