Corporate DEI has been going through a rough patch. Last year the Supreme Court ended affirmative action in college admissions. This signaled to many that similar rulings might be in store for corporate DEI activities. This saw DEI programs at some companies quietly scaled back for fear of non-compliance. Then this summer we’ve seen companies begin slashing DEI programs altogether, starting with Tractor Supply Company and John Deere. Now Brown-Forman Corp – makers of Jack Daniels – and Harley Davidson have both announced that they are ending their DEI initiatives. Bloomberg writes of Brown-Forman that:
“The company sent a letter to employees on Wednesday informing them that Brown-Forman was going to stop linking executive compensation to progress on DEI. The company said it will also end its participation in an annual ranking of companies with an LGBTQ-friendly work environment. The Kentucky-based business will also scrap plans to push for more suppliers from a minority background.”
Harley Davidson stated on social media that:
“It is critical to our business that we hire and retain the best talent and that all employees feel welcome… That said, we have not operated a DEI function since April 2024, and we do not have a DEI function today. We do not have hiring quotas and we no longer have supplier diversity spend goals.”
It’s worth noting that when Tractor Supply Company cut its DEI programs it also cut its climate programs. So far, none of the other companies walking back DEI appear to be cutting climate. These companies seem to still view climate as a material issue that requires attention, likely due to the possibility of new mandatory climate reporting laws. In times like these it’s important to remember that DEI and ESG aren’t about politics, they’re about building resilient businesses and managing risks and opportunities. Slashing DEI hurts a company’s ability to manage its human capital and build long-term value. Practitioners should remember, that having these programs is about building better businesses. This point is often lost in the noise but business fundamentals can help focus your company’s priorities and transform how ESG is viewed internally.
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