Last Updated on August 13, 2025 by Bertrand Clarke
In 2025, major U.S. companies are navigating a complex landscape of political, legal, and social pressures surrounding diversity, equity, and inclusion (DEI) initiatives. A recent report from The Conference Board highlights a significant shift in how S&P 100, S&P 500, and Russell 3000 companies are approaching DEI, revealing a trend of strategic recalibration rather than outright abandonment. As businesses adapt to a changing regulatory environment and heightened scrutiny, they are refining their messaging, strengthening governance, and aligning DEI efforts with broader business objectives. This article explores how companies are redefining their DEI strategies to remain resilient and competitive in 2025, supported by fresh data and insights into corporate priorities.
A Shift in DEI Messaging
The Conference Board’s 2025 report, based on Form-10K filings, indicates that more than half of S&P 100 companies have adjusted their DEI messaging in 2025 compared to 2024. Notably, the use of the term “DEI” in S&P 500 filings dropped by 68%, with terms like “racial” declining by 58%, “gender” by 35%, and “diversity” by 33%. This linguistic shift reflects a cautious approach to external communications, driven by a politically charged environment following the 2023 Supreme Court decision on affirmative action and policy changes under the current administration.
However, this reduction in DEI terminology does not signal a retreat from diversity initiatives. Andrew Jones, principal researcher at The Conference Board, emphasized, “This shift in public disclosure doesn’t mean companies are abandoning DEI. Instead, they’re selectively reframing commitments, reducing public exposure, and embedding oversight more quietly yet firmly into governance and human capital management.”
For example, companies like Microsoft and JPMorgan Chase have shifted focus to broader “human capital” goals, such as talent development and employee engagement, while maintaining diversity as a core component. In 2025, 79% of S&P 500 companies disclosed board committee oversight of DEI, up from 72% in 2024, and among Russell 3000 companies, this figure surged from 48.4% to 86.8%. This suggests a move toward integrating DEI into governance structures to enhance legal defensibility while aligning with business priorities.
Workforce and Board Diversity Disclosures Decline
The report highlights a notable decline in transparency around workforce and board diversity. In 2025, only 55.1% of S&P 500 companies disclosed data on women in management, down from 71.2% in 2024. Similarly, the share of companies reporting the total number of female board members dropped from 90.5% to 60.4%. Racial diversity disclosures saw an even steeper decline, with 33.9% of S&P 500 companies omitting board racial diversity data in 2025, compared to just 2.5% in 2024. For Russell 3000 companies, this figure jumped from 14.1% to 54.7%.
This reduction in disclosures coincides with increased scrutiny of DEI practices. A January 2025 executive order targeting private-sector DEI prompted companies like Target and BlackRock to scale back explicit DEI goals. Additionally, a Resume.org report noted that 20% of companies have eliminated DEI programs since the 2024 election, citing political pressures and economic constraints. Despite this, many firms are not abandoning DEI but are instead embedding it into less controversial frameworks, such as employee retention and leadership development.
Executive Compensation and DEI Metrics
Another significant shift is the reduced linkage between DEI metrics and executive compensation. In 2024, 68% of S&P 500 companies and 41.6% of Russell 3000 companies tied executive pay to DEI goals. In 2025, these figures dropped to 35.3% and 18.7%, respectively. Instead, companies are emphasizing broader human capital metrics, such as workforce engagement and skill development. For instance, Walmart’s 2025 proxy statement highlights incentives tied to employee satisfaction and retention, with diversity as an underlying factor rather than an explicit target.
This recalibration reflects a strategic response to legal risks. The 2023 Supreme Court ruling on affirmative action has led companies to avoid metrics that could be perceived as quotas or preferential treatment. “Companies are being more cautious to avoid legal challenges, but they’re not walking away from diversity,” said Ariane Marchis-Mouren, Senior Governance Researcher at The Conference Board. “They’re finding ways to integrate DEI into broader business strategies.”
Political and Economic Pressures
The political climate in 2025, shaped by policy shifts under President Donald Trump’s administration, has intensified scrutiny of DEI initiatives. A Resume.org survey found that 1 in 8 companies plan to reduce or eliminate DEI programs in 2025, with 51% of managers admitting that DEI was initially implemented for public relations purposes. Political climate changes were cited as the top factor for scaling back, followed by budget constraints and lack of measurable ROI.
Economic pressures also play a role. With inflation concerns and rising operational costs, 51% of companies redirecting DEI funds have allocated them to general operating expenses, while 40% are investing in AI and technology initiatives. However, firms like Amazon are adapting by unifying employee resource groups under broader inclusion frameworks, signaling a commitment to diversity without explicit DEI branding.
Global Context and Regulatory Divergence
While U.S. companies face domestic pressures, they must also navigate international expectations. The European Union’s Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) require consistent demographic disclosures, putting U.S. firms at odds with domestic trends. The Conference Board notes that this misalignment could create challenges for multinational corporations, particularly those with operations in Europe, where DEI reporting remains robust.
For example, Unilever, a global consumer goods company, continues to report detailed workforce diversity metrics to comply with EU regulations while adopting more neutral language in U.S. filings. This dual approach allows companies to balance local and global expectations, but it increases compliance complexity.
The Business Case for DEI
Despite the challenges, many companies view DEI as critical to long-term growth. A 2025 McKinsey study found that companies with diverse leadership are 25% more likely to outperform financially, reinforcing the business case for inclusion. Firms like Google and Salesforce are doubling down on DEI by tying it to innovation and customer engagement. Google’s 2025 diversity report emphasizes inclusive product development, citing diverse teams as key to addressing global markets.
Moreover, institutional investors continue to prioritize DEI. BlackRock’s 2025 stewardship guidelines encourage companies to disclose diversity metrics, warning that a lack of transparency could impact shareholder support. This pressure incentivizes firms to maintain DEI commitments, even if communicated more discreetly.
Looking Ahead: DEI in a Fragmented Landscape
As companies move into 2026, the DEI landscape will likely remain fragmented. The Conference Board advises firms to strengthen governance, monitor global regulatory trends, and align DEI with business outcomes to mitigate risks. “Companies that integrate DEI into their core operations—rather than treating it as a standalone initiative—will be better positioned to navigate legal and political challenges,” said Jeff Hoffman, Interim Governance & Sustainability Center Leader at The Conference Board.
Innovative approaches are emerging. For instance, IBM has launched AI-driven tools to analyze workforce diversity anonymously, ensuring compliance with legal standards while identifying gaps in inclusion. Similarly, Accenture’s 2025 sustainability report highlights mentorship programs that foster diverse talent pipelines without explicit DEI labeling.
Conclusion
In 2025, U.S. companies are not abandoning DEI but are adapting it to a new reality. By reframing messaging, strengthening governance, and aligning diversity with business goals, firms are balancing caution with commitment. While political and economic pressures have reduced public disclosures, the underlying focus on inclusion remains strong, driven by business imperatives and global expectations. As companies navigate this evolving landscape, those that innovate and integrate DEI strategically will likely emerge as leaders in fostering inclusive, resilient workplaces.
