The future of DEI: are UK companies withdrawing their DEI policies?

Earlier this year, we commented on the current trends shaping responsible business. One observation was the trend in businesses rolling back from DEI efforts.

Diversity, equity and inclusion (DEI) is a familiar phrase that encompasses a wide range of issues. These include discrimination, equal opportunity, equality law and workplace policies, all of which come together to create a more diverse and inclusive workforce and workplace culture.

In recent months, DEI initiatives have faced increased scrutiny and, in some cases, outright opposition. This has followed a shift in the political landscape and the public narrative, particularly in the US.

We have taken a deeper look at what has been happening in the US and the UK, and how companies have responded. Keep reading for an overview of the current situation and key considerations for both companies and shareholders.

In the US

Recent executive orders in the US have directed federal contractors to halt programs that promote diversity or call for affirmative action, enabling major US companies to scale back their DEI commitments. Industry giants like Boeing, Walmart, Meta, and Amazon have all followed suit, reducing diversity programs, cutting DEI-related roles, and softening public commitments. As a result, there has been a marked decline in workplace diversity efforts internationally.

This trend has also been apparent during this year’s Annual General Meeting (AGM) season in the US, where investor activists have challenged companies’ diversity practices. Notably, a number of global investment managers have gone as far as to drop DEI from their proxy voting policies, further reinforcing the idea that DEI is an expendable corporate objective.

Despite this, there are notable examples of companies and shareholders pushing back. Apple has continued to emphasise DEI after their shareholders rejected a conservative think-tank’s anti-DEI proposal, vindicating a management decision to stand behind its diversity commitment and demonstrating that certain corporate leaders continue to see value in DEI. In doing so, Apple has raised important questions about the future of corporate diversity initiatives.

In the UK

In some cases, UK companies appear to be following the political weather in the US. One such company is GSK, which has paused diversity initiatives for its UK workforce, citing the need to align with US executive orders due to its significant market presence in the US. As a result, GSK has removed references to diversity from its website and halted programs such as mentoring for women and initiatives supporting social mobility for underprivileged students.

Elsewhere, US policy has had some influence on the UK subsidiaries of US corporates, leading to changes in their DEI strategies. For example, Accenture has announced changes to its DEI policies, citing the "evolving landscape." The company is ending employee representation goals and discontinuing external and career development programs for "people of specific demographic groups." This shift applies globally, not just in the US, affecting around 11,000 employees in the UK.

Despite these examples, a number of UK firms continue to uphold their diversity and inclusion goals, reflecting a broader commitment to fairness and equality. Co-op Group has reaffirmed its dedication to DEI, with CEO Shirine Khoury-Haq warning that rolling back on diversity efforts could undo decades of progress. Deloitte UK has also taken a firm stance, contrasting with its US counterpart. CEO Richard Houston assured employees that the firm would continue reporting annually on inclusion progress and maintaining its diversity networks, regardless of changes initiated by its parent company. Barclays has expressed an "unwavering" commitment to inclusion, emphasising that shifts in DEI policies elsewhere, particularly in the US, will not influence its approach. McDonald's UK has maintained its diversity goals despite its US parent company scaling back DEI initiatives. The UK division remains committed to ensuring that 40% of senior leadership roles are held by underrepresented groups by 2030.

A key factor contributing to the resilience of DEI in the UK is a robust legal and regulatory regime. For example, the Financial Conduct Authority (FCA) Listing Rules impose diversity reporting requirements on certain listed companies, enforcing transparency and accountability. UK regulations also safeguard diversity efforts through reporting requirements: the Equality Act 2010 establishes a legal foundation for workplace equality, while companies with over 250 employees must report on gender pay gaps. Organisations across the UK therefore have a legal duty to promote equality of opportunity and eliminate unlawful discrimination.

The political climate in the UK also differs from that of the US. UK Employment Rights Minister Justin Madders has stated that British firms operate under their own approach to equality, and should not be influenced by US pressures to scale back diversity initiatives. This stance suggests that, while some UK businesses may adjust their DEI strategies, there are public voices and a broader legal and political environment which remain supportive of inclusion efforts. 

Why DEI remains crucial for good corporate governance

Baroness Martha Lane Fox, chair of the British Chambers of Commerce Business Group, has criticised the rollback of DEI efforts, arguing that diversity is essential for attracting top talent and appealing to a broad customer base. She believes the UK has an opportunity to "lean into diversity – to stand apart from the US," reinforcing the competitive advantage that DEI offers.

From a shareholder perspective, investors increasingly expect companies to uphold DEI commitments as part of good corporate governance. PIRC, a shareholder advisory group, provides voting recommendations in favour of DEI and ESG based on its assessments of company performance and progress. It is also actively engaging with companies on these issues, including climate change, social impact, and governance practices.

Research consistently shows that inclusive workplaces lead to stronger financial performance, improved innovation, and better decision-making. Companies with diverse leadership teams outperform their peers, benefiting from a wider range of perspectives and a more engaged workforce. Strong governance frameworks, including clear DEI policies, can therefore ensure accountability and long-term value creation.

The future of DEI in the UK

In the UK, the future of DEI will likely depend on a careful balance between legal and regulatory obligations, public expectations, and corporate leadership priorities. While diversity and inclusion remain important, businesses must ensure that these strategies work in tandem with their core objectives. DEI policies are increasingly scrutinised, so businesses will need to ensure they are robust in their objectives, value-oriented and align with the strategic priorities of the business.

The apparent trend away from DEI policies does not signal a wholesale rejection of the principles behind DEI. In many cases, companies are reassessing specific initiatives rather than abandoning diversity efforts entirely. Understanding why there has been a backlash against certain policies, and evaluating what is really effective, may well be justified from both an ethical and a commercial perspective. Strategies to promote DEI should be carefully designed, measured for impact, and implemented with a long-term perspective. A data-driven approach is essential. A well-structured DEI strategy is part of an effective governance framework that ultimately drives value creation. This blog from our Employment team sets out actionable steps on how businesses can go about this. 

For now, we do not see shareholder activism calling for the rollback of DEI measures featuring in the 2025 AGM season in the UK. Looking ahead, we do not anticipate a wholesale reversal of DEI commitments in the UK. Shareholders are unlikely to vote against progress made in this space. On the contrary, we expect to continue to see companies recognise that diversity is a key element of good corporate governance, contributing to stronger decision-making, innovation, and overall business success.

Many thanks to trainee Madeleine Ross for their help in writing this article.

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

© Farrer & Co LLP, July 2025