Among them are those whose careers are sustainable only as long as environmental, social and governance (ESG) policies — under which DEI falls — are extended. These include the consultants, advisors and companies’ internal specialists who constructed their grift for years, adding new cost centers on the books, which only siphoned dollars from corporate resources without adding any corresponding profitability.
One of the consultants administering defibrillator paddles is Matteo Tonello (pictured above) of The Conference Board, who wrote up a “CEO and C-Suite ESG Priorities for 2025” advisory piece about navigating the new environment. Amusingly, based upon surveys of business leaders globally, it’s only in the United States that “anti-ESG sentiment” ranks among the top concerns for CEOs — “ahead of even regulatory concerns.” From the piece:
This highlights the growing momentum of ESG backlash in the US since 2022, fueled by concerns over perceived overreach of ESG initiatives, skepticism about their financial materiality, and broader debates on the role of corporations in addressing social and environmental issues. High-profile developments, such as state-level restrictions on ESG-related investments and critiques of corporate ESG policies, have further polarized discourse.
Make sure you catch what Tonello is trying to sell:
- The problem is “perceived overreach” of ESG, not actual ESG;
- The problem is “skepticism” about ESG’s financial materiality, not its actual financial materiality or immateriality;
- The problem is pesky “broader debates” on corporations’ involvement in social and environmental issues, not the corporations’ actual involvement in those issues that divide.
Tonello continues (emphasis added):
Looking ahead, anti-ESG sentiment is likely to remain a significant force shaping US corporate strategy, particularly amid a shifting political and legal environment. The anticipated rollback of federal climate disclosure rules, coupled with potential state-level restrictions on ESG-aligned investments and litigation challenging the link between ESG and fiduciary duty, will further complicate the landscape. To navigate these pressures, companies should adopt nuanced communication strategies that emphasize the alignment of ESG initiatives with financial performance and risk management, while addressing diverse stakeholder expectations. Additionally, business leaders can focus on measuring and clearly demonstrating the tangible return on investment from sustainability and ESG initiatives…
Recent research from The Conference Board indicates that most firms have adjusted DEI messaging and terminology in the past year to mitigate legal and political risks, and this trend will likely continue in 2025.
One question asked in The Conference Board survey was, “In the past 12 months, has your company modified its DEI terminology to focus more on concepts like ‘inclusion,’ ‘belonging,’ and ‘engagement,’ to emphasize broader organizational culture goals rather than racial diversity?” Fifty-five percent of respondents said they had changed their DEI terminology for either internal or external communications, or both.
With that in mind, NPR also reported today:
…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….
“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….
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.”
These reports only confirm what NLPC has pointed out recently in all the fanfare across both social and traditional media that ESG — and DEI especially — are dead. As two examples, we know from personal experience that Walmart tried to avoid accountability on DEI less than a year ago, and its alleged turnabout away from the anathema acronym is being replaced with “belonging.”
Similarly, while McDonald’s recently claimed it was rolling back its DEI programs, our direct engagement with the company showed no such intentions, with “inclusion” their preferred buzzword and corporate policies only indicating that executives plan to do a better job of hiding their DEI.
Indeed, a Heritage Foundation analysis of Fortune 500 companies’ statements and reports on DEI found that there has been a little “retreat” superficially, but the vast majority still retain commitments to the policies.
DEI is no longer a useful term, but it lives on under alternative names and methods.
