Navigating DEI obligations: a UK employer’s perspective amid global shifts

DEI in the United States

The global impact of the Black Lives Matter movement following the murder of George Floyd triggered widespread corporate commitments to diversity, equity, and inclusion (DEI). Five years later, the political and legal climate in the United States has shifted significantly, marked by the rollback of DEI policies through two executive orders issued by the Trump administration earlier this year:

1. The first mandates the termination of DEI initiatives within the Federal Government.
2. The second, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”, repeals the longstanding affirmative action obligation, originally established in 1965, on federal contractors. In its place, the order directs federal agencies to take action against so-called “illegal” DEI policies and programmes in the private sector.

This shift has emerged against a backdrop of growing discontent and legal challenges surrounding DEI in the US. The Supreme Court decision in Students for Fair Admissions v Harvard & University of North Carolina (2023) was a pivotal moment, striking down race-based affirmative action in university admissions as unconstitutional. Although the ruling focused on higher education, its broader implications have fuelled a wave of claims against large employers in the private sector. As a result, many major US corporations have scaled back their DEI policies.

Outside the US, concerns have been raised that a similar rollback may be seen elsewhere, especially in multinational companies with links to the United States. In this article, we consider whether UK companies are likely to follow suit in scaling back their DEI policies.

DEI in the UK: will companies follow suit?

Since developments in the US often influence practices in the UK, there has been speculation that President Trump’s approach to DEI could prompt a rollback of DEI policies here. For instance, some viewed the FCA and PRA’s decision not to introduce new mandatory D&I regulations as reflective of a weakening commitment to DEI in the UK.

However, many UK organisations have been vocal about their steadfast commitment to their DEI objectives, with the Institute of Directors recently reporting that over 70% of business leaders are not planning to alter their DEI commitments in response to the US policy shift.

In understanding why this might be case, it is worth taking stock and reminding ourselves of the existing UK laws, which mean the DEI landscape here is very different from the US.

The UK legal landscape

In the UK (excluding Northen Ireland, where policies differ slightly), principles of equality and protection from discrimination are enshrined in the Equality Act 2010. This protects workers from discrimination or harassment in the course of their employment based on nine protected characteristics. A failure to comply with the Equality Act can result in significant financial, legal and reputational risks for employers.

The current Labour Government has shown that it is committed not only to maintaining current DEI protections, but also to strengthening them. This includes proposals to introduce mandatory ethnicity and disability pay gap reporting for business with 250 or more staff, as well as strengthen protection from harassment (included in the draft Employment Rights Bill).

Preventative duty and defending discrimination claims

Employers in the UK have a legal duty to take reasonable steps to prevent sexual harassment in the workplace (see here for a reminder). The new duty places greater emphasis on proactive measures, including clear policies, procedures, and mandatory training. A rollback of DEI-related policies could undermine an employer’s ability to establish that they took “reasonable steps” if faced with allegations they have breached of the preventive duty.

Similarly, reducing DEI policies may also expose employers to wider discrimination risks. Without adequate anti-discrimination policies, businesses will find it difficult to rely on the Equality Act’s Section 109 statutory defence, which protects employers from liability for discrimination, harassment or victimisation if they can demonstrate that they took all reasonable steps to prevent discriminatory conduct. As a minimum, to rely on this defence, employers in the UK will usually need to demonstrate they have appropriate DEI policies, have provided adequate training for staff, and deal with complaints effectively.

Positive action v affirmative action

In the US, affirmative action (also known as positive discrimination) previously permitted organisations to implement targeted recruitment and support programmes to improve opportunities for historically excluded groups.

In contrast, UK law does not allow affirmative action. Instead, the Equality Act 2010 permits positive action to support disadvantaged or underrepresented groups. Sections 158 and 159 of the Act provide a legal framework for employers seeking to enhance workplace diversity while avoiding legal risks. While positive action is not mandatory, it offers employers a valuable tool for enhancing diversity in the workplace and breaking down barriers for disadvantaged groups. If anything, the US’s recent changes mean the country is moving closer to the position currently in place in the UK and so is unlikely to change UK practice in this area.

(For more details, see our earlier blog posts: Dos and don’ts of positive action and Navigating positive action in recruitment)

Non-legal considerations

Beyond legal considerations, weakening DEI commitments could have far-reaching consequences for businesses. The fundamental objective behind DEI policies has always been to foster workplace environments that provide equal access and inclusivity. This may include consideration of broader DEI challenges than those protected by the Equality Act, for instance, social mobility and access bias, which are both recognised as affecting career opportunities and progression albeit not protected characteristics under the Act. Research consistently shows that diverse and inclusive workforces outperform those lacking diversity. In addition to reducing legal risks, DEI policies contribute to increased innovation, talent attraction and retention, reputation and corporate social responsibility.

Actionable steps for UK employers

There is no doubt that discussions around DEI in the UK will continue to take centre stage, shaped by political, legal, and societal landscapes. As employers navigate these conversations, they should prioritise embracing DEI as a long-term investment while ensuring compliance with existing legal obligations.

To maintain and strengthen DEI commitments, UK employers should consider the following steps:

1. DEI Strategy:

Employers should ensure they have a robust DEI strategy that is embedded in the organisation. See here for suggestions on creating an effective DEI strategy. Regularly evaluate existing policies to confirm they remain fit for purpose and compliant with the Equality Act.

2. Conduct regular training:

Equip employees with the knowledge and education not only in the DEI sphere, but also in other areas including preventing sexual harassment and fostering a respectful work environment. This could involve, for example, working with external organisations that specialise in DEI to provide training, workshops and fresh insights.

3. Employee buy-in:

Focus efforts on engaging employees at all levels, emphasising the benefits of diversity for all staff.

Employers can also seek to address scepticism by highlighting the evidential and moral basis for DEI in the workplace. It can help to expand to initiatives to apply to a broad range of groups (including those not necessarily covered by the Equality Act), for example parenting groups and those focused on mental health and wellbeing, as well as to involve allies in discussions where appropriate.

4. Challenge discrimination:

Organisations should take a zero-tolerance approach to discrimination and challenge any discriminatory or inappropriate behaviour. Consider what steps can be taken to create a “speak up” culture, where staff feel able to raise concerns without fear of recrimination. Employers should consider whether their managers are equipped to challenge unacceptable conduct and manage potential areas of conflict.

5. Foster inclusive leadership:

Encourage senior leaders to champion DEI and model inclusive behaviours.

6. Monitor progress:

Use data to track diversity metrics, workforce trends and employee feedback, and identify risks/areas for improvement.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, May 2025