If you believed everything you read in the media, you might be mourning the demise of corporate diversity, equity and inclusion (DEI) efforts in the US. But a number of moves in recent months suggest the real story is more complicated, more nuanced – and far from over.

The latest GlobeScan poll, offering an appropriately timed temperature check of US consumer sentiment on a range of corporate responsibility issues, highlights robust bipartisan support for corporate action on both climate and DEI issues. In fact, 72 percent of respondents say companies should have commitments to DEI in spite of headwinds from a rather unsupportive administration.

This flies in the face of narratives claiming US consumers are turning against corporate diversity programs. And it may explain why some companies are facing criticism – not for supporting DEI, but for backing away from it.

The risks of fair-weather values

Yes, the backlash to the backlash is real — and it’s putting brands at a new crossroads: how to maintain inclusive policies without becoming the next lightning rod. Some are doubling down. Others are rebranding. And a few are learning the hard way that trying to please everyone might please no one.

Retail giant Target is a good case in point. The company was once held up as a leader in DEI, with strong internal goals and a raft of public-facing initiatives that had everybody talking and people queuing up in support. Then, in 2023, amid conservative boycotts and political pressure, the firm began quietly rowing back its DEI commitments – shifting away from inclusive hiring goals and dialing back LGBTQ+ merchandise displays in stores across the country.

The response? Backlash from the other side. Consumers and advocacy groups alike criticized the move as a betrayal of the very communities Target once celebrated. Social media lit up with disappointment. Employee morale reportedly took a hit. And now, competing retailers including Costco could be reaping the rewards.

It’s not that Costco made a strategic decision to dodge the DEI debate. It has simply remained consistent with its approach to inclusion and diversity, quietly sticking to its principles without launching flashy campaigns or having to backpedal in the face of perceived antipathy towards DEI. The payoff? A boost to consumer goodwill and reputational strength. While Target continues to navigate controversy, Costco is seen as a stable, values-driven brand. In a time when customers are increasingly savvy about performative allyship, that consistency matters.

Adapting, not retreating

Meanwhile, there has been a similar DEI showdown over at Disney. In March, an anti-DEI shareholder proposal aimed at derailing the company’s support for LGBTQ+ initiatives was overwhelmingly rejected. It wasn’t just a win for DEI advocates; it was a clear signal that investors – many of whom are often cast as wary of so-called ‘woke capitalism’ – see value in inclusive practices. Disney’s position reflects a growing understanding that DEI isn’t just a moral imperative; it's a business one.

Other companies are finding clever ways to navigate the polarized landscape. PepsiCo recently announced it would move away from the language of ‘DEI’ and instead emphasize “inclusion for growth.” According to reports, the shift aims to avoid political entanglement while still pursuing the same internal goals. It’s a reframing strategy – less about changing the work, more about changing how it’s talked about. The question now is whether this semantic pivot will work. Will critics accept the rebranding? Will employees and communities still see the company as an ally?

“The rebranding can be either strategic or superficial,” Futerra co-founder and Chief Solutionist Solitaire Townsend tells Sustainable Brands® (SB). “‘Inclusion for growth’ could be a smart move if it helps embed DEI deeper into core business strategy. But if it’s just a new label to dodge controversy while quietly cutting back, people will see right through it. And your employees will definitely know.”

Why are so many brands struggling with their DEI identities? Part of it is timing. DEI became a corporate focus in 2020, when companies made bold promises to support racial justice. But the US political climate has since shifted: Conservative activists and politicians have made DEI a target, accusing companies of ‘reverse discrimination’ and overreach.

That pressure has led to a wave of second-guessing and, in some cases, retreat.

The ROI of standing your ground

But research continues to show the business case for cultivating diverse and inclusive corporate cultures: Inclusive companies are more innovative, attract better talent, better reflect and engage their customer base and weather reputational storms more effectively.

The business case hasn’t changed. What’s changed is the level of scrutiny – and the need for companies to show that DEI isn’t just a buzzword but baked into culture and operations.

Another company that continues to stand its ground is outdoor apparel brand REI. According to Director of Workforce DEI & Belonging Kristin Rodney, the long-term value of the company’s Racial Equity, Diversity and Inclusion (REDI) commitments “shows up everywhere.”

“Centering the voices and experiences of our employees is key to our approach,” she tells SB. “We conduct regular surveys, seek input from our five employee-led Inclusion Networks and our Co-op Compass Group to learn about our employees’ experiences and what matters to them.”

Nicole Lacasse, the co-op’s Senior Manager of Brand and Customer REDI, adds that “success in inclusive design has already shown measurable short-term impacts – from increased product sales to higher attendance at inclusive community events.”

In the short term, more companies may follow PepsiCo’s lead: pivoting language, adjusting optics, but keeping the core. Others seem likely to stick to their guns, like Disney and Costco. There’s also a growing emphasis on substance over statement. Flashy campaigns or Pride Month tie-ins are no longer enough. Today’s consumers and employees are asking deeper questions: What are your pay equity numbers? Who’s in leadership? What’s your supplier diversity strategy?

“Ultimately, truly effective DEI work moves at the speed of trust. When we show up consistently, listen deeply and make belonging a shared responsibility, we strengthen our brand and co-op community,” Lacasse tells us.

Brands that treat DEI as a political liability will likely continue to face headwinds from both sides. Those that stay consistent – and transparent – will build longer-term trust.

“Scaling back our commitments would fundamentally contradict who we are,” Lacasse adds. “Inclusion isn’t a political stance for us; it’s a strategic and moral imperative.”

The DEI conversation isn’t ending. It’s evolving. Companies are being forced to sharpen their strategies, clarify their values, and own their decisions – whether that means standing firm, rebranding smartly or facing the consequences of retreat.

“DEI isn’t just a nice-to-have. It’s becoming core to risk management, innovation and business continuity,” Townsend asserts. “The companies that rolled back DEI are already suffering more than those sticking to their principles. The market will take note.”

The backlash to the backlash is a reminder: DEI isn’t a fad or a PR stunt; it’s a reflection of the world as it is, and the world consumers want to see.

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Tom Idle

Founder
Narrative Matters

Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.

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Tags:

Futerra

Disney

Costco

REI

Diversity, Equity & Inclusion

ROI

Systems Shift

Brands Taking Stands

Meaningful Connections

Responsible Consumption

Politics/Policy

Published Jun 23, 2025 8am EDT / 5am PDT / 1pm BST / 2pm CEST