Corporate America has championed diversity, equity, and inclusion, or DEI, for years. But as the vocabulary surrounding it has become weaponized, critics argue that DEI is more exhibitive than it is effective. Some states even proposed bills to limit such initiatives, prompting companies to rethink their DEI strategies.
Diversity’s New Direction
Many companies consider a diverse workforce necessary to attract and retain talent. But following the Supreme Court’s decision to overturn affirmative action practices at universities, discussions around the legality of diversity practices in business have ignited, leaving DEI initiatives on the ropes.
While business leaders may remain committed to the DEI cause in practice, they may not in name.
The DEI and ESG Conundrum
It isn’t the first time that “woke” business policies are under scrutiny. For investors, the term ESG has undergone some similar attacks.
ESG stands for environmental, social, and governance, describing a set of non-financial criteria used to evaluate whether companies are socially and environmentally responsible. They allow investors to make investing decisions that align with their values. But critics of ESG investing have called it a politicization of investing, and question its relative performance versus the broader market.
Even so, ESG hasn’t gone away. But now that DEI initiatives are facing an uncertain future of their own, it could become harder to evaluate the ‘S’ in ESG.
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