USA Wall Street drops DEI 

Content Warning: Racism, Police Brutality 

Wall Street, the shorthand term for the financial industry in the United States, has long been a mirror for the politics of the nation. Like in politics, corporate America has recently taken a stance on diversity policies, though not always a consistent one. Recently, DEI has hit the headlines again as, with the introduction of a new Presidential Administration in America, many companies are reversing their previous pledges to the scheme. 

Diversity, Equity and Inclusion (DEI) programmes have their roots in the Civil Rights Act of 1964, which made it illegal to discriminate based on race, religion, sex and national origin, DEI is defined as a set of policies and practices that aim to create a more inclusive workspace. Examples of this include: fair hiring practices, unconscious bias training, establishing employee resource groups and using inclusive language. 

This subject was previously the center of mass media focus in May 2020 after George Floyd, a Black American man, was senselessly murdered by Minneapolis police officer, Derek Chauvin. The killing sparked mass international protests over the injustice experienced by Floyd and millions of other marginalised individuals in the US who make up the ‘global majority’ yet are subjected to police brutality and the institutional racism of the policing system in the country. 

Ultimately, whilst not as systemic as many people had hoped, some tangible policy change was achieved, with many states passing new laws addressing police corruption, cracking down on controversial tactics like no knock warrants that are so often disproportionately used against black and brown communities.

The same was true for private businesses, who looked inwards at their own diversity schemes. Having gutted many of their DEI teams in the year prior, due to the financial turmoil that had been brought by the COVID 19 pandemic, corporate America recommitted to hiring staff from diverse backgrounds and growing their support for DEI initiatives. 

While these pledges from Wall Street were initially welcomed, years on from them and the current realities suggest that much of this claimed commitment was merely performative, with companies implementing superficial changes to check the box of diversity quotas, rather than offering substantive changes. 

For example, in 2022, American multinational financial company Wells Fargo, amongst others, were accused of conducting fake interviews with candidates from diverse backgrounds to fill a quota, when in reality the position had already been filled. Evidence also suggests that potential employees are aware of these practices. Indeed, one study found a staggering 62% of employees felt as though they had been interviewed for a job solely so the company could check a diversity requirement.

This topic has come back into the zeitgeist recently since the inauguration of President Trump back into the White House on the 20th of January 2025. Trump has already made a concerted effort to dismantle DEI initiatives, and he gives no indication of stopping. Indeed, he has already signed multiple executive orders calling for the elimination of government diversity programs and the removal of all federal offices and jobs related to DEI. 

The President’s actions have not been limited to government departments as he has also encouraged private companies to similarly rescind on their DEI initiatives. Following this, many major US companies such as General Motors, Pepsi, Amazon and Disney have removed some, if not all, of their references to DEI in their annual reports. This has been linked to the recent inauguration of President Trump who has spoken openly about his stance that DEI programmes are “dangerous, demeaning and immoral”, going as far as to argue they are inherently discriminatory.  Wall Street executives were quick to echo this rhetoric, similarly describing the schemes as “toxic” and “crazy”. 

But how does this affect the profits of the companies themselves? Despite the microfocus on companies ‘bottom line’, DEI schemes are not merely in place for ethical benefits; they have in fact proven to increase profits for investors and shareholders in the companies. 

According to the Harvard Business Review, who conducted a detailed study of 79 large companies, for every 0.1 per cent improvement in DEI ratings for a company, there was a corresponding 13% increase in the change-power score on average. A strong Change power, being a company’s quantifiable ability to change, was then linked to a 200% improvement in shareholder return. Whilst it is acknowledged that causality cannot be proven, there is strong evidence of a relationship between DEI and real increased profit. 

This aligns with many first hand accounts from US citizens who actively avoid giving their business to companies who do not invest in diversity programmes. For example, American Civil Rights Activist Reverend Al Sharpton who recently announced a boycott of companies who are eliminating their DEI programmes as he called on fellow US citizens to do the same. 

Additionally, DEI has been linked to other tangible benefits such as employee engagement, greater innovation, highest retention rates and improved company reputation, all of which increase the likelihood of a profitable business. 

In a corporate world that places so much emphasis on maximising profit above all else, the recent scrapping of DEI has led to wider reflections on ethical investing. This is a term for all approaches to investing that consider ethical values as well as financial returns. Whilst we have already established that, contrary to many recent claims, DEI can be linked to increased profit for shareholders, shouldn’t it be enough that its existence makes the companies more ethical? 

Fundamentally DEI exists to preserve each individual’s right to respect and equity in all facets of life. Whereas policies like DEI and affirmative action (the practice of favouring individuals belonging to marginalised groups) have been branded as discrimination against the existing power holders (See: caucasian, cisgendered, able bodied, male ect.), in reality they are a small combatant against a society that both historically and currently discriminates against the global majority. While the onus should always be on these conglomerates to lead on creating more inclusive workplaces, this cannot always be relied upon, therefore it is up to the consumer to be vigilant about which businesses they support. 

Words by Elsie Henderson