As companies pull back on DE&I, their brands will suffer

In the past month, seven large brands have publicly announced a pullback from DE&I efforts, marking a stark shift from the broad corporate embrace of equity just four years ago. 

Ford Motor Co., Harley-Davidson, Lowe’s, John Deere, Jack Daniel’s maker Brown-Forman, Tractor Supply Co. and Molson Coors have all shared plans to scale back their corporate DE&I initiatives to varying degrees, from refusing to participate in the Human Rights Campaign’s yearly Equality Index to ditching diverse supplier goals.

These decisions seem to have been in part guided by a right-wing influencer named Robby Starbuck, who has been threatening to “expose” large corporations’ internal inclusivity efforts. Per his own posts on X, formerly Twitter, these brands have rolled back their DE&I programs in order to avoid backlash from Starbuck and his followers.

These anti-DE&I decisions mark a step change from the broad public demands of corporate accountability after George Floyd’s murder in 2020. But “that swell has seemingly died away in the past years,” said Kumi Croom, managing director at Duncan Channon.

Lola Bakare, CMO advisor and inclusive marketing strategist, believes that “the brands that we’re seeing pull out were never in — the decision was already made,” and added that while employees may have been trying to make changes internally, they have “come up against a lot of friction.” 

“This random guy [Starbuck] has created an opportunity for that friction to become policy. And when one person's opinion becomes what drives decision making, everybody loses,” she continued.

Employees not only support DE&I programs at their companies, but expect them noted Lisette Arsuaga, cofounder of the Association of National Advertisers’ Alliance for Inclusive and Multicultural Marketing (ANA AIMM). According to a study from AIMM and the Cultural Inclusion Accelerator, only 6% of respondents were unmotivated or strongly unmotivated to support equitable workplace practices inclusive of race, gender and sexual orientation. 

The current corporate DE&I pullback is “moving in the wrong direction of where this country should be going and where this country wants to be going,” she said. 

Danisha Lomax, EVP and head of client inclusivity and impact at Digitas, added, “It's not just a moral issue, it is truly an issue that is based on people — and if people are driving commerce and driving business, pulling back on something that will intentionally affect your business is not something we would advocate for, or would encourage any brand to do.”

Why brands are pulling back from DE&I 

According to Croom, companies are reversing course on DE&I because “there’s so much concern and fatigue going on” for Americans worried about the presidential election, escalating war in the Middle East and economic hardship. 

As a result, corporations may feel they have the cloud cover to roll back these policies.

Brands also want to avoid seeming political to consumers, especially during a divisive election year. “Efforts that lean into DE&I often feel to corporations that they are taking a side, when it's quite the opposite of that,” Croom added.

Marketers are still spooked from the backlash against Bud Light last year in response to its partnership with transgender influencer Dylan Mulvaney. But Gem Garcin, associate creative director at Open Influence, believes that while it's easy for some brands to bend to anti-DE&I criticism out of fear that they “might take an initial hit if people disagree and boycott,” those that stand by  their commitments maintain the support of diverse consumers—a growing segment of the population.

Backtracking on a previously held value will also come off as inauthentic and confuse consumers on what the brand actually stands for. 

“Brands that waffle on their identity and what they stand for will always appear weaker” than those that stand strong in their stated values, said Garcin, pointing to Ben & Jerry’s as an example of the latter.

Alienating younger audiences

Gen Z wants the brands they shop to reflect varied identities and causes, and they “choose to spend with brands that are actively and continuously showing up for them in the ways that matter to them,” noted Lomax. 

Those that fail to listen to these demands for inclusivity will “literally become negligent in their ecosystem of brands,” she added.

In other words, “even white, non-Hispanic youth expect to be surrounded by diversity,” as Arsuaga put it, adding that “this country is changing, and the younger the segment, the more diverse that segment is.”

“We're getting browner and we're getting gayer,” pointed out Garcin. 

Lomax noted that brands often neglect to remember the importance of employees, and that “people are part of our brands as well, and those people that work for us are our best advocates.” 

“We are so good at looking to the outside for validation and cultural insights—we need to make our marketing great—that we neglect the people we hired who hold different identities, who are part of marginalised communities,” she added.

“If you want to have a young workforce come to work for you, you have to start thinking about those things,” said Arsuaga. “And not only about who you have now, but who you're going to have later.”

Marketing will resonate less

Marketing experts warn that pulling back on DE&I programs and commitments will impact more than just diverse employees and company culture, and will eventually manifest in their marketing. 

“Brands are smart enough to know that they’ll need to keep up the facade of inclusivity in their marketing to reach diverse audiences,” noted Garcin. “But if a marketing team itself isn't diverse, they won't authentically be able to storytell to those audiences.”

Arsuaga pointed to a Cultural Insights Impact Measure study, which found culture is responsible for a large portion of a campaign’s success, whether the category is inexpensive like CPG (66%) or large-scale, like a vehicle purchase (55%). 

“If you don't get culture right, you're missing the majority of your ability to connect with your consumers and the majority of your ability to gain brand growth,” she said. 

This is true for large-scale campaigns down to social media content. The most recent viral trend on social media—the demure trend—was created by Jools LeBron, a Black trans woman. And Charli XCX, who ushered us through Brat summer, is Indian and has a queer fanbase. 

Cultural trends are often started by Black and/or LGBTQ+ people. Brands that publicly distance themselves from these communities lose the ability to tap into these viral trends.

“Part of brands’ responsibility is to play a role in shaping culture,” added Bakare.

Brands could look to their agency partners to address these blind spots, as marketers note that agencies are still required to disclose DE&I metrics and initiatives in pitches. “Part of the requirement is understanding [the agency’s] commitment to DE&I and making sure there is representation,” Croom said.

Brands can also choose not to fall susceptible to backlash and “impact annual earnings positively by doing smart and effective DE&I-driven marketing and strategy,” said Bakare, pointing to E.L.F. Beauty as an example.

“At the end of the day, America is the same place, and the people who use E.L.F. Beauty live in the neighborhoods where John Deere does business, they’re in the families of the people who use John Deere’s products. They live in the Heartland, too,” she said.