Almost immediately after taking the presidential oath of office, President Trump sprang into action, signing multiple executive orders that address diversity, equity and inclusion (DEI) programs and policies. This included two orders: One mandating the termination of DEI activities in the federal government, the other removing a 1965 obligation on federal contractors to take affirmative action in favour of women and minorities and requiring federal agencies to take action to address “illegal” DEI policies and programs in the private sector (see further here).

The Trump administration’s prioritisation of this topic within minutes of taking power reflects a rise of discontent with DEI within some quarters in the United States, with such programmes characterised by some as divisive and unmeritocratic. The U.S. Supreme Court’s Harvard decision, which ruled that race-conscious admissions practices at Harvard College and the University of North Carolina (which are generally similar to many other higher education institutions’ admissions processes) violate the Fourteenth Amendment’s Equal Protection Clause of the U.S. Constitution, caused many U.S. employers to re-examine their own practices and to pull back or even pull the plug on some or all of their DEI efforts.

The picture in the UK and Europe is very different

In contrast, employers operating in the UK and EU are under rising pressure from new laws and regulatory expectations to drive forward DEI.

In the UK, the new government is proposing a raft of new diversity laws, including imposing mandatory ethnicity pay gap reporting on employers for the very first time. Likewise, while further detail is awaited, financial services regulators are proposing to require regulated firms to meet minimum standards to drive forward gender and ethnic diversity.

In the EU, there are significant new directives about to bite. These include:

• New gender quotas for women on boards in large-listed companies; and 
• A new EU Pay Transparency Directive that will impose onerous obligations on employers to disclose pay data and address gender disparities.

What does this all mean for UK and global employers?

1. Review DEI compliance: While Trump’s orders of course do not apply outside the United States, global employers may want to even more carefully assess the legality of their practices going forward against local requirements. The UK and EU have a different legal framework from affirmative action in the United States, which permits employers to take positive action within legal limits (see here and here as examples for the UK).
2. Navigating anti-DEI sentiment: Not all employees are in favour of DEI efforts. In view of these events, some may feel more confident to challenge them. In recent years, we have seen an uptick in well-publicised Tribunal cases where certain “anti-DEI” views have been upheld in the UK. To help reduce division, many employers are reframing initiatives to focus on inclusion for all – such as including parenting groups, men’s mental health or opening up certain initiatives to allies.
3. Risks of abandoning diversity goals: However, given the starkly different political and regulatory trajectory in the UK and EU, abandoning DEI efforts would be risky. For example, if ethnicity pay gap reporting is implemented as expected, it is likely that employers will need to demonstrate actions taken to address disparities. This is something that a broad focus on inclusion alone may not achieve. Instead, it will be even more important for employers to develop legally compliant strategies and communicate them clearly.
4. The role of DEI training: Some employers may be tempted to cut DEI training, but this can increase legal exposure. For example, anti-harassment training can help defend against discrimination claims and UK employers now have a new legal duty to take reasonable steps to prevent sexual harassment, which typically includes delivering training.
5. A more nuanced approach: All of this means that it will be more difficult for global companies to make powerful sweeping statements about their commitment in this area. It’s now more important than ever to work with local experts to tailor initiatives to local legal and cultural contexts.

Note in this article we refer to these initiatives as DEI initiatives as they are referred to in the executive orders, but others may refer to them as “IE&D” (inclusion, equity and diversity) initiatives or otherwise.