DONALD Trump’s decision to scrap diversity, equity, and inclusion (DEI) initiatives has emboldened some American businesses to ditch their own commitments to working towards a fairer workplace, leaving firms with US ties apprehensive about what happens next.
On his first full day of his second term, Trump signed an executive order that ended DEI funding for government agencies and tore apart orders previously signed by Joe Biden, which aimed to combat racial and gender-based discrimination in the workplace.
In April, the US president signed the last in a series of executive orders on education, directing schools to get out of what his aide called “the whole sort of diversity, equity and inclusion cult”.
Following Trump’s return to the White House, a raft of American businesses have decided to roll back their own DEI commitments, including some of the world’s biggest conglomerates, like Amazon, Google, Meta, McDonald's and Disney.
There have been fears about how Trump’s decision to gut DEI initiatives will ripple through international business with American links.
Diversity Scotland, a consultancy which works across the public, private, and third sectors to embed equity, inclusion, and accessibility into workplace culture and policies, said they have witnessed first-hand the anxiety some firms have over the possible ramifications of Trump’s cuts.
Tony McCaffery, CEO of Diversity Scotland, said some of Diversity Scotland’s clients in Europe who have interests in the US have expressed to his firm their apprehension around the US President's policies.
He said: “There's no doubt that there is a nervousness and apprehension around how they engage in this work, because of the climate within the states since Donald Trump has come back to the White House.
“We've also encountered some of our clients across Europe who have big interests in the states, who have also experienced that same level of apprehension and nervousness.”
However, despite some concerns, McCaffery said nobody who Diversity Scotland, also known as Diversity Company outside Scotland, works with has stopped the initiative and rather has had to “pivot” with how they talk about it.
McCaffery said: “From an existing client base, nobody has actually stopped the work, because they've already been able to see the impact that it's had.
He added: “They've just pivoted how they talk about it, what their external messaging is, they've maybe slightly re-languaged, some aspects of what they do.”
He added that at least two American businesses have rolled back on their verbal agreement to work with the Scottish firm since Trump re-entered the White House.
McCaffery explained that it wasn't because they didn't want to work towards including DEI initiatives, but rather the economic burden caused by Trump's recent introduction of sweeping international tariffs.
He said that the companies were in fact “pretty gutted” they had to pause on working with Diversity Scotland as they believe the work the firm does is important and beneficial from a business perspective.
However, due to the economic turmoil tariffs have created, they were unable to commit to the initiatives.
“I think that's an interesting influence as well, that whatever's happening in the White House has really far-reaching consequences,” McCaffery added.
Those far-reaching consequences have already reached the UK, as BT was one of the first businesses to make changes to its DEI policies.
In March, a survey conducted by the UK’s oldest running organisation for business leaders, the Institute of Directors, found that 11% of respondents expect their firms to scale down DEI initiatives, but 71% said they do not plan to alter their approach.
There have been previous studies that showed that businesses which prescribe to DEI initiatives see tangible benefits, as research by the management consulting firm McKinsey found that racially diverse companies are 35% more likely to outperform their less diverse counterparts.
Meanwhile, the same research found that companies with a strong female representation in leadership positions are 25% more likely to outperform and that gender-diverse executive teams in the highest quartile outperformed male-dominated companies by 21%.
However, McCaffery said that performative, surface-level efforts, driven by appearance rather than meaningful change, do a disservice to genuine inclusion and are not what DEI initiatives strive to achieve.
He said Diversity Scotland’s mantra is that fairness, inclusion, and equity must come first to create workplaces where diversity can truly thrive.
McCaffery also stressed that DEI initiatives help to bestow organisations with the tools in order to work towards a fairer workplace.
Adding that fairness is important, because when companies become fairer, people will start to feel like they matter, that their voice matters, that they're included, and that they start to feel like they belong.
“Lots of organisations out there go for diversity first, and it's all about the optics,” McCaffery said.
“It's all about, we need more women, or we need more people of colour. Frankly, that's a shallow approach.
“Diversity should be your last consideration. Your first consideration should be fairness and inclusion.
“Only then, as an organisation, are you actually able to embrace having a diverse workforce, because that way you're set up to allow people whose voices are not normally heard to actually be heard.”
McCaffery added: “We know that having a range of different opinions, a range of different backgrounds, will bring innovation.”
