Major Corporations Scale Back DEI Policies Amid Scrutiny

In the last week, a large-scale change has occurred in corporate Diversity, Equity, and Inclusion (DEI) policies in large sectors of the economy. Top companies like State Street, BlackRock, Wells Fargo, Berkshire Hathaway, and Goldman Sachs have changed their DEI promises, marking a larger recalibration of diversity initiatives against changing political and legal environments. At the same time, new government regulations are transforming the way organizations engage with diversity-related initiatives, compelling businesses to navigate an evolving regulatory landscape while meeting investor and consumer demands.

In a significant trend in the financial industry, some top institutions have reduced or abandoned DEI programs in the face of increasing political pressure. State Street Global Advisors, which has made headlines with its high-profile "Fearless Girl" campaign encouraging gender diversity on corporate boards, said it was ending its board diversity quota policy, in effect since 2017. The company attributed the move to regulatory pressures and changing priorities. Also, BlackRock, a global asset manager of massive size, dispensed with its DEI-oriented unit and merged it under a larger "talent and culture" group, essentially disposing of its former DEI-specific hiring numbers.

Goldman Sachs, which had previously pledged to double female and minority leadership by 2025, dropped diversity goals from its regulatory filings, marking a step back from its previous commitments. Wells Fargo then did the same by ending its policy of ensuring a diverse pool of candidates in the first round of interviews for senior positions in the United States, marking another trend of corporate retreat from formal DEI programs.

Aside from banks, Berkshire Hathaway and Target also altered considerably their publicly stated DEI commitments. Berkshire Hathaway, in its 2025 annual report, silently deleted all instances of diversity and inclusion, an extreme reversal from past years when it openly discussed making the workforce more representative. Berkshire Hathaway's move is indicative of an increasing reluctance by companies to be publicly vocal about DEI efforts as political and legal landscapes have evolved. Target, another giant among corporate giants, dropped its firm-wide DEI objectives and dissolved portions of its Supplier Diversity organization, a nod to strategic course correction as the company drew opposition from conservative bases.

Other finance and corporate heavyweights have, too, redirected their DEI strategies. JPMorgan Chase, Morgan Stanley, Citigroup, and Bank of America have started stripping websites, public communications, and hiring documents of DEI-specific language, showing a wider trend to play down diversity vows in light of outside pressures. KPMG US, one of the biggest consulting firms, closed down its "Accelerate 2025" DEI initiative, further validating the corporate pullback from formalized diversity programs. In the meantime, Paramount Global suspended the gathering of demographic information and abolished numerical diversity targets, falling in line with the changing legal and regulatory environment that has subjected corporate DEI initiatives to closer scrutiny.

The changing corporate approach to DEI policies is not happening in a vacuum. Actions by the federal government have been a driving force behind these changes. In accordance with an executive order signed by then-President Donald Trump, federal affirmative action policy requirements were eliminated, excluding federal contractors from race-conscious hiring or supplier diversity programs. The directive, in addition to wider agency compliance adjustments, has caused federal agencies to abolish internal DEI offices, eliminate diversity-oriented programs, and clean related language from official websites. These regulatory changes have put extra pressure on companies to revisit their DEI pledges to comply with changing legal obligations.

Public response to these corporate and governmental shifts has been divided, underscoring the polarizing aspect of DEI policies. Consumer advocacy organizations have voiced robust opposition to the reversal of diversity efforts. The People's Union USA, for example, issued a 24-hour economic boycott on February 28, encouraging consumers to hold back purchases from large retailers in response to corporate rollbacks of DEI. The action is an indication of the general anger among activists and consumers who perceive these corporate changes as a backward move in the advancement of workplace equality.

The cultural sector has also experienced the ripple effects of these changes. In Washington, D.C., the Art Museum of the Americas canceled exhibitions featuring Black and LGBTQ+ artists, citing compliance with new federal orders limiting diversity-related funding. The cancellation has been widely criticized by the artistic community, which views the action as a move backward for representation in the arts.

For finance professionals and CSOs, these changes represent the key challenge and considerations. The evolving regulatory landscape requires recalibrating company compliance policies in relation to novel federal and legal regulations. Organizations that had long been adopting DEI as an integral component of their Environmental, Social, and Governance (ESG) agenda must now find the balance of satisfying stakeholder needs while complying with these modifications.

Investor considerations are also changing as asset managers shift their attention from stated DEI targets to broader ESG objectives. This requires a rebalancing of investment strategy by financial institutions, so they remain in line with sustainability and governance priorities but move away from strict diversity metrics. While at the same time, businesses are required to balance their reputations with caution, especially in response to growing demands from regulatory institutions and the general public. Reducing DEI programs might assuage a few investors as well as politicians, but can also drive off employees, clients, and stakeholders who see commitments to diversity as an essential element of corporate ethics.

As the business arena operates within this complicated environment, the future for DEI among leading industries cannot be determined with certainty. Though some companies are likely to gradually roll back diversity initiatives quietly, others might have to explore substitute strategies to preserve inclusivity at the expense of remaining within newly evolving legal and regulatory limits. What is certain is that the discourse surrounding corporate diversity is a long way from being concluded, and companies will have to balance carefully compliance, reputation, and stakeholder interaction over the next months and years.