Happy new year, and welcome to 2025!
This year is starting similar to how last year ended—on Monday, McDonald’s issued a press release titled “Our Commitment to Inclusion at McDonald’s”—and predictably all the headlines read something along the lines of ‘McDonald’s is rolling back its DEI program.’
In reality, it was more of a reiteration of their commitment and celebration of their accomplishments.
“As we start the New Year and set our ambitions for McDonald’s, we want to also update you on our accomplishments embedding inclusion throughout our system and highlight a few important changes to our approach.”
Similar to the other major companies that have announced changes to their diversity programs, this represented mostly a change in communication and branding, as well as rethinking practices that could run afoul of the law or make them more liable to litigation.
The specific changes included:
- changing the name of the diversity team to the “Global Inclusion Team”
- eliminating specific goals related to diverse supplier spending
- eliminating specific targets/goals for workforce representation
- ending the practice of participating in external surveys
They reiterated they will “continue to transparently report our demographic information in our annual Purpose & Impact report with respect to the Board, employees and suppliers.”
This aligns with what we have seen with every other company that is ‘rolling back’ their DEI program. Companies are changing their strategy around communicating purpose and strategy, ending the practice of setting specific goals and targets, and rethinking the right organizational structure when it comes to DEI.
What they are not doing is changing the type and granularity of human capital and workforce disclosures—this is not controversial, and the trend has been towards more information and more detail. We have seen this from Walmart, Lowe’s, and Harley-Davidson, each of whom released workforce data as granular or more than the prior year after they communicated changes to their DEI programs.
What has also been very consistent among the companies that have publicly communicated changes to their programs is they will stop participating in external surveys, specifically the Human Rights Campaign Corporate Equality Index (CEI), which measures how inclusive companies’ corporate policies, practices and benefits are for LGBTQ+ employees. This has been a main target of conservative activists, branding the index a ‘social credit score.’
The latest HRC CEI was published this week, and included scoring for 1,556 US companies, with 1,449 participating by actively contributing data, up from 1,496 rated and 1,386 participating last year (the HRC will score a company based on available public data even if the company doesn’t actively participate). For S&P 500 companies, 81.6% were scored with 73% actively participating.
However, 10 companies that participated in the latest survey (including 8 in the S&P 500) announced they will not participate going forward: Brown-Forman, Caterpillar, Ford, Harley-Davidson, Lowe’s, Molson-Coors, Stanley Black & Decker, Toyota North America, Tractor Supply Co., and Walmart. (we’re not including McDonald’s but assuming they will be added to the list).
As we watch this landscape evolve, it’s clear companies are recalibrating their approaches to DEI practices and programs. The focus appears to be on reshaping strategy and communication while continuing to disclose workforce data transparently—an approach that balances internal goals with external pressures. We will continue to monitor closely and keep you informed in any trends we spot in the data reporting.
What we’re reading this week:
- Anti-DEI shareholder proposals tripled since 2020 (Axios)
- Global ESG Body Prioritizes Rule Rollouts Over New Standards (Bloomberg Law)
- When an anti-DEI activist took a swing at Costco, the board hit back (Seattle Times)
- Walmart’s DEI Compromise Holds Lessons for Corporate America (Bloomberg)
- They Helped Create DEI—and Even They Say It Needs a Makeover (Wall Street Journal)
- Market Failure and The Case for Mandatory Human Capital Management Disclosures (SSRN)
- 2024 Was a Bad Year for Sustainability (Harvard Business Review)
- Sudden Loss of Undocumented Workers Threw Tech Supplier Into Upheaval (New York Times)
- Corporate America Drew Back From DEI. The Upheaval Isn’t Over. (Wall Street Journal) and Corporate DEI Programs Recoil and Rebrand as Pressure Mounts (Bloomberg Law)