Six major American companies—Tractor Supply Co., John Deere, Harley-Davidson, Brown-Forman, Ford, and Lowe’s—have recently announced they will modify their DEI programs in response to pressure from conservative activists, hoping to avoid a similar fate as Bud Light and betting that placating their consumers is more important than the potential negative effects on employees and other stakeholders.
Each company announced varied changes, from untethering executive compensation from DEI and/or sustainability goals to ending participation and/or sponsorship of cultural events, but the 2 consistent responses were to stop submitting data/participating in the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI) and making adjustments to the structure and purpose of their employee resource groups, with 5 of the 6 mentioning each.
The CEI is a “national benchmarking tool on corporate policies, practices and benefits pertinent to lesbian, gay, bisexual, transgender and queer employees.” Published since 2002, the index measures:
- Inclusive non-discrimination policies across business entities
- Equitable benefits for LGBTQ+ workers and their families
- Supporting an inclusive culture and corporate social responsibility
AT&T’s employee group for Black employees, The NETwork, Black Integrated Communications Professionals (BCIP), was formed in 1969 and “promotes the African-American experience at AT&T and pursues inclusive opportunities to unite all who share our core values. We facilitate personal and professional growth and development for our members.” Women of AT&T followed in 1972, with InspirASIAN formed in 1978. AT&T now has 26 groups including those focused on current and future leaders, first responders, and faith.
Here is how GE describes their ERGs:
For nearly 30 years, GE’s Employee Resource Groups (ERGs) have added value to our colleagues and businesses by helping to engage and develop the diverse talent needed to build a world that works. These are communities built on common backgrounds and experiences that welcome all employees to learn, connect, advocate, and foster a sense of belonging.
And Adobe on their Employee Networks:
Adobe, we recognize the importance of building a diverse culture not only around race, ethnicity, gender, sexual orientation, gender identity, ability, and age, but also around background, experience, and ideas. Adobe connects those with similar interests and passions, promotes inclusion, and creates a healthy, fun, and collaborative workplace with the help of our employee networks. Our employee networks connect employees with similar backgrounds and identities to help support underrepresented communities.
Currently, 97 of the S&P 100 has employee groups. Employee Resource Groups (ERGs) are the most popular name (51), followed by Business Resource Groups (BRGs) – 11, and Employee Networks (9)
Four of the six companies talked about refocusing their employee resource groups on professional development, networking, mentoring and as Tractor Supply Co. said “supporting the business.” Lowe’s said they will combine their BRGs (they have 8) under one umbrella, though it’s unclear what that means. Brown-Forman didn’t mention ERGs in their communication but on a LinkedIn post from 7 months ago said “Our Employee Resource Groups (ERG) are the heart and soul of our diversity and inclusion efforts at Brown-Forman.”
While not new, many companies encouraged and supported the formation of ERGs after George Floyd’s murder as it often represents the first step for companies towards building more inclusive work environments and engaging employees who feel disconnected or unsupported. It’s also easy, cheap (often free), and provides a great mechanism for management to get regular feedback about employee sentiment.
The main reason companies have specifically focused on building more inclusive environments specifically for the LGBTQ+ community is because of changing demographics. According to Gallup, 7.6% of Americans identify as LGBTQ+, up from 5.6% in 2020 and 3.5% in 2012. Breaking down the results by generation, the results are even more stark: 22.3% of Gen Z (born 1997 or later) and 9.8% of Millennials identify as LGBTQ+.
Employees boast of their inclusive programs and policies because they need to do so to compete with their peers attracting and retaining talent and investment.
We continue to see the opposite of backsliding when it comes to corporate reporting of DEI and HCM metrics, but rather more companies disclosing more granular details each year. A couple of the companies—Tractor Supply and Brown-Forman—completely removed DEI/ESG corporate sites and it’s unclear how reporting will change going forward, but overall we see this as proactive PR moves to placate anti-DEI activists without changing much of the underlying programs and policies in place.
Update: As I was completing this piece Molson Coors became the latest company to announce they will make changes to their DEI programs and policies, including ending participation with the HRC CEI and “Ending ERG groups in favor of BRG groups open to all employees, no longer designed to focus on race or sexual orientation.”
It’s unclear what this means as we already discussed how ERG and BRG is interchangeable and they are already open to all, but again we believe this is Molson Coors trying not to be the next Bud Light more than anything else.
Plus, what we’re reading this week:
- Anti-ESG Bills, Priorities Stall in Congress’ Fourth Quarter (Bloomberg Law)
- Despite Backlash Against DEI, Most US Workers Remain Committed (Seramount)
- How gender pay gap analysis informs investment decisions (Janus Henderson)
- The Right-Wing Crusade Against DEI Isn’t Actually Working (Intelligencer)
- Done right, DEI is good for business—the debate should end there (Fast Company)
- Costco found the antidote to the ills of shareholder capitalism (SmartBrief)
- Older workers aren’t retiring, creating career gridlock for younger ones (Axios)
- In Corporate Boardrooms, DEI Remains Priority but Operational Rigor Wanes (Ariel Investments)
- Top 10: Diversity Leaders (Sustainability Magazine)
- How Americans Really Feel About Corporate DEI Rollbacks (Morning Consult)