The financial risks of scaling back DE&I
Beyond internal workforce dynamics, the financial impact of abandoning DE&I initiatives is another factor companies must consider. Research has consistently shown that diverse workplaces lead to greater innovation, stronger financial performance, and better employee retention. 
Companies that scale back DE&I initiatives risk alienating key talent, particularly younger workers. According to US jobs site Glassdoor, 76% of job seekers say a diverse workforce is an important factor when evaluating offers. Rolling back DE&I efforts could create long-term recruitment and retention challenges, making it harder for companies to attract top talent.
In parallel, employees are becoming more vigilant on issues like sustainability, where the risk of being seen as a “greenwasher” – or, in the case of DE&I, a “pinkwasher” – is increasingly close at hand.
On a global scale, the political and regulatory environments vary. While the US has seen a pushback against DE&I, Europe continues to promote corporate diversity reporting and gender balance in leadership. For example, the EU’s Women on Boards Directive, which took effect in 2022, requires large publicly listed companies to ensure that at least 40% of non-executive director positions – or 33% of all board seats – are held by women by 2026. 
Similarly, Germany passed a law in 2021 mandating minimum gender representation on executive boards of large companies, and France has expanded corporate gender quotas beyond boards to senior management teams. 
These regulations contrast sharply with the US, where DE&I programs are increasingly scrutinized. DE&I programs have been a fixture in corporate America for decades, but they gained significant traction in 2020 in the wake of George Floyd’s murder, which spurred widespread calls for racial equity and corporate accountability. But the backlash is now in full swing.
For multinational companies, the trick will be ensuring compliance with different frameworks while managing risks in politically sensitive markets. 
Ultimately, the goal is not to abandon diversity efforts but to integrate them more seamlessly into business strategy. When DE&I is tied to measurable business outcomes like talent retention, market expansion, and innovation, it moves from being a divisive issue to a clear driver of success.