How corporate America got DEI wrong

Still, Bermiss and others point out that DEI policies can have significant business impacts, even if they’re not apparent in short-term financial results. Having a more diverse team can help create products that appeal to more consumers, or help employees feel more satisfied with their jobs.

Costco, for example, recently told investors that its DEI efforts “help bring originality and creativity to our merchandise offerings” and “enhance our capacity to attract and retain employees who will help our business succeed,” among other benefits.

The massive retailer, which also calls DEI part of its “code of ethics,” successfully brushed off an anti-DEI shareholder proposal last month. Meanwhile, JPMorgan Chase CEO Jamie Dimon, who runs the nation’s largest bank, has called DEI “good for business; it’s morally right; we’re quite good at it; we’re successful.”

It probably helps that both JPMorgan Chase and Costco are financial powerhouses, whose profits and share prices keep their investors happy. But both companies are also framing their DEI policies as a matter of morality or ethics, rather than just profits.

That’s exactly how more companies should be thinking about DEI, according to Bermiss — if (and only if) they see it as valuable. Bermiss acknowledges that not all companies will want to continue pursuing greater diversity, equity, and inclusion. But he argues that if business leaders decide that pursuing such workplace goals is morally right and aligned with a company’s values, then they’ll be better able to stand up to criticisms or attacks.

And, as he adds, that’s firmer ground than hoping that “if we get two more Latinos on the board, our stock price will go up.”

Some DEI work will continue — by any other name

Despite the ongoing pressures, Costco and JPMorgan aren’t the only employers still spending money on DEI. In fact, 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. Corporate America’s diversity results have been “a mixed bag,” she adds, “in part because companies often spent too much time and energy on initiatives that didn’t have a measurable impact.”

Now she’s hoping that employers are taking the time to create more thoughtful — and effective — programs to increase fairness.

“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.

That could be a tricky balance, especially as the Trump Administration continues ramping up attacks on DEI — including efforts to uncover rebranded diversity efforts inside of federal agencies.

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.