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Tag: Regulations

How to Tackle the DEI Backlash: What’s the Right Approach for Your Company?

Posted on by Laura McGee: Co-founder and Chief Executive Officer

As the political climate shifts, many companies are facing increasing pressure regarding their diversity, equity, and inclusion (DEI) initiatives. The Trump administration’s executive orders have prompted a backlash against DEI programs, particularly those linked to federal contracts. Companies now face critical decisions on how to navigate the political landscape, adjust their strategies, and maintain their commitment to DEI.

In this blog, we explore the three primary options available to companies: stay the course (double down), reposition, or back down. Each option carries its own set of risks and rewards, and the right decision depends on your organization’s goals, stakeholder alignment, and market position.

1. Stay the course (double down)

Staying the course, or doubling down on DEI, means maintaining or even intensifying your DEI initiatives despite the external pressures and political risks. This approach involves reinforcing your company’s commitment to diversity, equity, and inclusion, and continuing to promote DEI programs, training, and messaging publicly and internally.

Examples of companies taking this approach:

  • Salesforce – Despite the political challenges, Salesforce has been vocal in its commitment to DEI, investing heavily in initiatives aimed at improving workforce diversity.
  • Microsoft – Continues to prioritize DEI and is consistently ranked as a leader in corporate diversity.
  • JP Morgan – The company remains committed to DEI, using it as a strategic priority to improve employee engagement and innovation.
  • Ben & Jerry’s – Continues to integrate DEI into its core business values, regularly speaking out on social justice issues.

Pros:

  • Long-term commitment to DEI: Reinforcing your company’s dedication to DEI fosters trust and loyalty with employees who value inclusion and social justice.
  • Attracting diverse talent: Companies with strong DEI initiatives are more attractive to top talent, particularly from underrepresented groups.
  • Reputation as a DEI Leader: Staying the course positions your organization as a leader in diversity, potentially increasing brand affinity among socially-conscious consumers and clients.

Cons:

  • Political & legal risks: Continuing DEI initiatives without adjusting for political shifts could lead to legal challenges, particularly in the U.S. where certain DEI programs may be deemed illegal or discriminatory under recent executive orders.
  • Stakeholder backlash: If key stakeholders (such as investors or conservative employees) are not aligned with DEI efforts, this approach could lead to internal friction.
  • Reputational backlash: Companies in more conservative regions or industries may face reputational damage or public pushback for taking a strong stand on DEI.

Best fit for:

  • Large, progressive companies: Organizations with a strong internal culture of diversity and inclusion, where DEI is integral to the business model (e.g., Salesforce, Microsoft).
  • Tech & finance sectors: Industries where innovation and talent attraction are closely tied to DEI efforts.
  • Companies with progressive geographies: Firms with significant operations in regions that prioritize DEI, such as urban centers or “blue” states (e.g., Ben & Jerry’s, Google).

2. Reposition

Repositioning your DEI strategy involves shifting your focus from specific DEI programs and terminology (such as race-based training or quotas) to broader cultural initiatives that align with employee engagement and workplace optimization. The goal is to maintain the spirit of inclusion, accessibility, and belonging while reframing the language and practices to avoid controversy or political risks.

Examples of companies taking this approach:

  • Bank of America reframed its DEI initiatives to focus on inclusive leadership and organizational culture, rather than identity-based diversity.
  • Costco focused on workforce optimization and engagement while ensuring diversity was a natural outcome of its hiring practices.
  • Apple maintains a strong DEI commitment but emphasizes values such as innovation and employee engagement, reframing DEI as part of the company’s broader culture.
  • Cisco repositioned its DEI messaging to focus on “building an inclusive workplace” and engagement metrics, rather than focusing on identity-based diversity.

Pros:

  • Broader appeal: Reframing DEI within a cultural or business context can make it more palatable to a wider audience, reducing the risk of alienating employees or stakeholders who may be opposed to traditional DEI terminology.
  • Adaptability: By shifting focus to broader cultural initiatives, companies can adapt to changing political climates while still supporting diversity in the workplace.
  • Reduced legal risk: This approach reduces the likelihood of legal challenges by removing direct links to race or gender-based programs that might be considered controversial.

Cons:

  • Potential dilution of impact: Repositioning DEI as a culture-first initiative may reduce its specific focus on diversity and inclusion, potentially resulting in less measurable progress in these areas.
  • Employee disillusionment: Employees who are committed to traditional DEI programs may feel that the shift is a retreat or that the company no longer prioritizes diversity.
  • Stakeholder confusion: Rebranding DEI without clear communication may confuse stakeholders or make it seem like the company is avoiding real diversity issues.

Best fit for:

  • Private companies: Firms that aren’t exposed to heavy public scrutiny or regulatory oversight can more easily adjust their DEI programs without facing significant backlash.
  • Industries with legal or political constraints: Companies in sectors with strict legal or political considerations (e.g., federal contractors) may benefit from repositioning their DEI efforts.
  • Companies facing internal pushback: Organizations experiencing resistance from certain employee groups or key stakeholders may find repositioning a way to navigate these tensions.

3. Back down

Backing down from DEI initiatives means scaling back or even eliminating DEI programs, particularly those that focus on race, gender, or identity-based initiatives. This approach may involve removing certain DEI training, reducing public messaging around diversity, and focusing on other business priorities.

Examples of companies taking this approach:

  • Netflix – While Netflix still emphasizes diversity, it has pulled back on some of its more publicly visible DEI campaigns in response to political pressures.
  • McDonald’s scaled back its public DEI initiatives in response to backlash and legal scrutiny regarding workplace diversity training.
  • Walmart temporarily paused certain DEI initiatives in regions where the political climate was hostile toward these programs.

Pros:

  • Reduced political & legal risk: By scaling back DEI programs, companies can avoid the legal challenges and political scrutiny associated with race- or gender-based initiatives.
  • Reduced operational costs: Scaling back DEI programs can lead to cost savings, as companies eliminate training and reporting requirements associated with these initiatives.
  • Avoiding reputational backlash: For companies operating in conservative areas or industries, backing down from visible DEI efforts can help maintain internal harmony and avoid alienating certain employee groups.

Cons:

  • Talent & innovation loss: Reducing DEI efforts can alienate diverse talent, leading to a decline in employee engagement, innovation, and long-term organizational success.
  • Damage to employer brand: Companies that back down on DEI could face negative press and loss of consumer loyalty, especially among progressive customers who prioritize inclusion.
  • Employee morale: Employees who value diversity and inclusion may feel disillusioned or unsupported, potentially leading to disengagement and increased turnover.

Best fit for:

  • Companies in politically conservative regions: Businesses that operate in areas where DEI programs face heavy resistance may find backing down a pragmatic choice to maintain stability.
  • Companies with high government dependency: Organizations heavily reliant on government contracts that face legal scrutiny over DEI programs may have to consider this option to avoid compliance issues.
  • Companies facing strong internal resistance: Firms with key stakeholders or leadership opposed to DEI initiatives might choose this path to avoid further internal conflict.

What to consider when choosing an approach

Ultimately, the decision between staying the course, repositioning, or backing down depends on several factors, including:

  • Political climate: Is your company located in a region with strong political support or opposition to DEI?
  • Stakeholder alignment: Are your key stakeholders, including leadership and investors, fully committed to DEI?
  • Brand reputation: How much is your brand aligned with DEI, and how will each option impact your consumer base and talent pool?
  • Legal & regulatory risks: What are the legal implications of continuing or reducing DEI efforts, especially if you operate in multiple jurisdictions?

Not sure which DEI strategy fits your business? Let’s talk. Diversio’s data-driven solutions help companies navigate complex DEI landscapes with confidence. Contact us today to schedule a 15-minute call for us to assess your unique circumstances together.

How to De-Risk Your DEI Programs: Navigating the Shifting Landscape

Posted on by Laura McGee: Co-founder and Chief Executive Officer

Diversity, equity, and inclusion (DEI) initiatives are essential for fostering a fair and equitable workplace. However, shifting political landscapes—particularly the recent Executive Orders under the Trump administration— have intensified scrutiny around DEI programs. Companies must now be more strategic to avoid political backlash, legal risks, and reputational damages.

In this blog, we’ll outline some of the most common DEI programs, identify which ones are the most controversial, and provide tactical suggestions for mitigating risks. Additionally, we’ll explore “safe” DEI initiatives under the Trump Administration’s Executive Orders, helping organizations ensure they stay compliant while continuing their DEI efforts.

Importantly, this blog article should not replace legal advice. Diversio’s knowledge resource library is intended for educational purposes only and should replace a lawyer’s guidance. Readers should consult legal counsel if they have concerns regarding their DEI programs. Diversio can support clients through this process.

Common DEI programs & policies & how to de-risk them

  1. Hiring quotas & affirmative action 

Hiring quotas or affirmative action policies aim to ensure that certain demographic groups (such as women, racial minorities, or individuals with disabilities) are hired at a proportional rate to their representation in the broader population.

The risk
Under the Trump administration, Executive Orders have labeled quotas and race/gender-based hiring preferences as “illegal” and “immoral.”


De-Risking Tactics:

  • Focus on business outcomes: Rather than setting quotas, emphasize diversity as a tool for improving business outcomes, such as innovation and productivity. Reframe DEI programs to focus on skill-building and employee potential, rather than quotas tied to race or gender.
  • Metrics-driven approach: Shift from setting rigid hiring quotas to tracking diversity metrics across multiple dimensions (gender, ethnicity, experience, etc.) and using this data to make informed decisions on recruitment and promotions. Avoid tying these metrics to specific targets or quotas, but instead, focus on building a diverse talent pipeline through outreach and inclusive hiring practices.
  1. Employee resource groups (ERGs)

ERGs are voluntary, employee-led groups that focus on supporting and advocating for underrepresented employees within an organization (e.g., women’s networks, LGBTQ+ groups, racial or ethnic identity groups).

The risk
While ERGs can be a great way to build community, some see them as divisive, especially in organizations where employees from different backgrounds don’t feel represented. Under the Trump administration’s Executive Orders, ERGs that focus on racial or gender identity have come under scrutiny.

De-risking tactics:

  • Shift Focus to Professional Development: Reframe ERGs as professional development networks or leadership development groups, where individuals of all backgrounds can learn from one another. This reduces the potential perception of division and increases the broader appeal of these groups.
  • Ensure Open Access: Ensure that participation in ERGs is open to all employees, regardless of identity, to avoid any perception of exclusion or bias.
  1. Unconscious bias training 

Unconscious bias training aims to help employees recognize and address their implicit biases, especially those related to race, gender, and other protected characteristics, to foster a more inclusive workplace.


The risk
Unconscious bias training has been criticized for its effectiveness (or lack thereof) in changing behaviors, and it’s become politically charged, particularly under the Trump administration. Executive Orders have specifically targeted training programs that promote concepts such as privilege, systemic racism, or identity-based training.

De-risking tactics:

  • Focus on skills & leadership development: Instead of focusing solely on bias, pivot the training to include leadership skills, emotional intelligence, and communication strategies to work with diverse teams. This broadens the training’s appeal and emphasizes business benefits rather than focusing on race or gender bias.
  • Opt for voluntary training: Position bias training as optional for those who want to improve their leadership or team dynamics, rather than mandatory, to minimize backlash.
  1. Pay equity audits 

Pay equity audits examine whether employees are paid fairly across gender, race, and other demographics, aiming to identify and address pay disparities.

The risk
Pay equity audits are generally seen as less controversial, as they directly address fair pay practices. However, the results can sometimes be uncomfortable, especially if disparities are found. Some critics argue that these audits are “identity-based” and contribute to the politicization of workplace pay.

De-risking tactics:

  • Frame as business imperative: Emphasize that pay equity audits help ensure the company attracts and retains top talent by offering competitive and fair compensation. Instead of focusing solely on race or gender, include experience and job performance metrics as part of the audit.
  • Ensure transparency: Clearly communicate the company’s commitment to pay equity across all employee groups and that the audit is part of an ongoing effort to retain talent and improve the business.
  1. Diversity & Inclusion (D&I) Reporting

Many companies now track and report on their diversity metrics, including gender, racial, and ethnic diversity across different departments and levels of the organization.


The risk
While reporting diversity metrics is seen as a positive step in ensuring accountability, companies fear backlash if reports reveal low diversity or slow progress. Recent Executive Orders discourage diversity targets that could be viewed as “reverse discrimination.”

De-risking tactic:

  • Use metrics for continuous improvement, not compliance: Position diversity reporting as part of a broader strategy to track continuous improvement. Avoid rigid diversity targets and instead use metrics to monitor trends, identify areas for improvement, and ensure long-term cultural shifts.
  • Balance with business metrics: Combine diversity metrics with other business performance indicators (such as employee engagement or retention rates) to show that your company’s commitment to DEI is aligned with business goals.

“Safest” DEI programs under the Trump administration’s executive orders

While certain DEI programs are more politically and legally risky under the Trump administration’s executive orders, there are others that are considered “safer” and less likely to attract scrutiny. These programs focus on creating inclusive, supportive work environments, without directly addressing race or gender-based quotas or training.

  1. Workplace safety & harassment prevention
    • Why it’s safe: Programs that focus on maintaining a safe, harassment-free workplace are legally required under federal law and are not controversial. These include training on workplace behavior, anti-harassment policies, and establishing reporting mechanisms.
    • Tactic: Ensure these programs emphasize respect, compliance with legal requirements, and the well-being of all employees.
  2. Skills-based development programs
    • Why it’s safe: Programs focusing on skills development (e.g., leadership, communication, project management, and technical skills, like artificial intelligence) are universally beneficial and do not focus on identity-based diversity.
    • Tactic: Position your development programs as tools for overall workforce optimization and professional growth, which benefits employees of all backgrounds.
  3. Cultural awareness & inclusion programs
    • Why it’s safe: Initiatives that promote broad cultural competence (e.g., team-building, cross-cultural communication) can be effective without focusing specifically on identity-based issues like race or gender.
    • Tactic: Emphasize inclusion as a company value that promotes collaboration and innovation, rather than focusing solely on identity groups.
  4. Flexible work and work-life balance programs
    • Why it’s safe: Programs that focus on work-life balance (e.g., flexible hours, remote work) and overall employee well-being are universally accepted and are not controversial.
    • Tactic: Frame these programs as part of your company’s commitment to employee satisfaction, mental health, and work-life balance, making them appealing to all workers.

Conclusion: Striking the Right Balance

As the DEI landscape continues to evolve, companies must be strategic in how they implement and communicate their diversity initiatives. By de-risking potentially controversial DEI programs and focusing on inclusive and business-aligned practices, organizations can maintain their commitment to diversity and inclusion while minimizing legal, political, and reputational risks.

How Diversio Can Help:
Diversio provides data-driven insights and strategies to help organizations optimize their DEI efforts while staying compliant with evolving political and legal landscapes. Whether you’re focusing on employee development, creating inclusive programs, or ensuring workplace safety, Diversio can help guide your organization toward a sustainable and inclusive future.

Navigating Global DEI Policies: A Guide for Multinational HR Teams

Posted on by Laura McGee: Co-founder and Chief Executive Officer

As companies expand their reach into new global markets, HR teams face the challenge of balancing compliance with local laws while maintaining a strong, unified commitment to diversity, equity, and inclusion (DEI). What works in one region may be completely incompatible with laws or societal norms in another. Understanding these regional differences is key to successfully managing DEI initiatives across borders.

We’ll break down the key DEI policies in different regions, highlighting areas where multinational companies may face friction and providing suggestions on how to navigate these complexities. From the progressive laws of Canada and the European Union to more restrictive policies in Russia and Saudi Arabia, let’s explore the global landscape of DEI.

We have several articles and resources discussing the recent changes to United States DEI policies. Learn how to de-risk your United States DEI programs here.

Note: This blog should not be taken as legal advice. For specific legal guidance regarding DEI compliance in your region, please consult with legal professionals familiar with local laws.

Least prohibitive countries: Pro-DEI or neutral

Some countries offer strong support for DEI, with comprehensive frameworks and government-backed initiatives promoting diversity, equity, and inclusion.

  1. United Kingdom
    While DEI remains a politically debated issue, the UK government does not impose outright bans on DEI initiatives. Public institutions have seen some DEI roles removed, but private companies are still free to implement DEI strategies.

What HR teams need to know: The UK offers a generally supportive environment for DEI, though HR teams should stay informed about political developments that could influence public institutions.

  1. Canada
    Canada is one of the strongest pro-DEI countries, with employment equity laws and strong government-backed DEI initiatives. Companies must adhere to strict anti-discrimination and equity requirements, and the legal framework is highly supportive.

What HR teams need to know: Canada is a leader in DEI, particularly with gender, racial, and disability inclusion. Companies should embrace government resources and initiatives to build inclusive workplace cultures.

  1. European Union (excluding Hungary & Poland)
    The EU mandates corporate DEI reporting through the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). These laws require companies to measure and report on diversity, inclusion, and gender parity.

What HR teams need to know: The EU is a strong proponent of DEI, especially with mandatory reporting on diversity. Companies operating in the EU should ensure compliance with these standards while leveraging them as an opportunity to demonstrate their commitment to DEI.

  1. Norway, Sweden, & Denmark
    These Nordic countries are highly supportive of DEI, with mandates for gender diversity on boards and comprehensive anti-discrimination protections. HR teams in these countries can freely implement broad DEI initiatives.

What HR teams need to know: These countries offer some of the most progressive DEI frameworks in the world. Focus on leveraging strong gender diversity regulations and supporting various minority groups with inclusive programs.

  1. New Zealand
    Known for its strong DEI framework, New Zealand includes protections for indigenous rights and corporate reporting requirements for gender equality and other aspects of inclusion.

What HR teams need to know: With strong protections for diverse groups, including Māori and other Indigenous communities, New Zealand is an ideal environment for implementing comprehensive DEI strategies across ethnic, gender, and social lines.

  1. Argentina
    Argentina has gender quotas in government sectors and has implemented trans employment quotas. The country’s legal framework supports the integration of LGBTQ+ individuals in the workplace.

What HR teams need to know: Argentina is a strong pro-DEI country with specific protections for gender and LGBTQ+ rights. HR teams should focus on fostering inclusion for both gender and sexual identity diversity, particularly in the public sector.

Moderate restrictions on DEI

In some countries, DEI policies are restricted or limited, and HR teams must carefully navigate local regulations when implementing diversity programs.

  1. France
    France has strong anti-discrimination laws, but the country bans the collection of racial or ethnic demographic data, making it difficult to implement DEI policies with detailed insights into minority representation.

What HR teams need to know: Companies in France can still promote DEI initiatives but must avoid collecting or reporting data on ethnicity or race. Focus on creating inclusive practices without referencing sensitive demographic data.

  1. Italy
    Under the current right-wing government, LGBTQ+ rights and DEI efforts have been scaled back. There have been restrictions on parental rights for same-sex couples, and LGBTQ+ advocacy has been limited.

What HR teams need to know: HR teams in Italy should avoid highly-visible DEI programs focused on LGBTQ+ rights, but can still implement inclusion initiatives that focus on broader diversity objectives, such as employee engagement.

  1. Turkey
    Turkey has become more authoritarian, with government crackdowns on LGBTQ+ events and women’s rights organizations. DEI programs focusing on gender equality and LGBTQ+ inclusion may be met with resistance.

What HR teams need to know: HR teams should exercise caution when implementing LGBTQ+ or gender-focused DEI initiatives in Turkey, focusing instead on non-controversial areas such as professional development and team collaboration.

Most restrictive countries: Challenging DEI environments

Some countries have strict laws that heavily restrict or outright prohibit DEI programs, creating significant challenges for multinational companies operating in these regions.

  1. Saudi Arabia
    Gender segregation remains strict, and LGBTQ+ rights are criminalized under religious law. While some reforms have been made in recent years, many DEI-related rights are still heavily restricted.

What HR teams need to know: Companies operating in Saudi Arabia must tread carefully, ensuring that any DEI efforts, particularly those focused on gender or LGBTQ+ inclusion, comply with local laws and do not contradict religious tenets.

  1. Russia
    Russia has passed laws banning LGBTQ+ “propaganda” and has cracked down on feminist and minority groups. These laws make DEI efforts in the public sphere increasingly difficult to implement.

What HR teams need to know: DEI initiatives related to LGBTQ+ issues and gender equality may be heavily restricted. Companies should minimize these types of programs and instead focus on employee well-being and operational diversity.

  1. China
    China imposes heavy censorship on LGBTQ+ and feminist discourse and has been accused of committing human rights abuses, including the genocide of the Uyghur population. The government severely limits the promotion of DEI.

What HR teams need to know: DEI policies focused on ethnic, sexual, or gender identity may face significant restrictions in China. Multinational companies should focus on fostering inclusivity without directly challenging the government’s stance.

  1. Hungary & Poland
    Hungary has passed laws banning gender studies, restricting LGBTQ+ rights, and limiting discussions of DEI in schools. Poland has seen the creation of “LGBT-free zones,” and government opposition to DEI programs in schools and workplaces is growing.

What HR teams need to know: In these countries, HR teams should focus on non-controversial aspects of diversity, such as skill development, engagement, and operational diversity, while minimizing DEI programs centered on gender and sexual identity.

Adapting DEI programs to local laws

Operating in multiple regions means HR teams must carefully balance global DEI goals with local legal requirements. While some regions offer robust DEI frameworks, others impose legal or societal constraints that require companies to take a nuanced approach particularly where the political environment limits the scope of inclusion initiatives. 

The key to success lies in adaptability—understanding what’s possible in each region while staying true to core values of diversity, equity, and inclusion. 

How Diversio can help:

Navigating DEI across global markets isn’t one-size-fits-all. Companies must align their strategies with local realities while maintaining a cohesive, values-driven approach. 

Diversio helps organizations: 

✅ Assess regional risks and opportunities using data-driven insights
✅ Develop compliant, culturally-aware, DEI strategies tailored to each market
✅ Track progress and impact while adapting to regulatory changes

Wherever your company operates, DEI remains a business imperative. The challenge isn’t just compliance—it’s creating inclusive, high-performing workplaces in any environment. Contact us today.

The Political & Legal Landscape of DEI: Navigating Changes in 2025

Posted on by Laura McGee: Co-founder and Chief Executive Officer

In 2025, DEI leaders face a shifting political and legal landscape under the Trump administration’s new executive orders. For companies—especially those involved in federal contracting—understanding these legal changes is paramount. The complexity of these shifts requires companies to rethink their DEI strategies or risk facing significant legal and reputational consequences.

The impact of recent executive orders

On January 21, 2025, the Trump administration issued an executive order aimed at dismantling certain DEI initiatives within the federal government and private-sector federal contractors. The order stipulates that ‘private organizations involved in federal contracts can no longer conduct DEI training that focuses on race or gender’. It also revokes specific provisions of the 1965 Equal Employment Opportunity Order, restricting certain affirmative action programs tied to identity.

These actions have sent waves through corporate America, particularly for industries heavily dependent on government contracts, such as defense, tech, and infrastructure. Companies are anticipating greater scrutiny – but what exactly does “DEI” mean in this context? Many are confused about what programs and policies are in versus out of scope.

What the Trump administration considers DEI & what falls outside his definition

The Trump administration has made a distinction between DEI practices that it deems “illegal” and those that are considered outside the scope of DEI initiatives. Understanding this differentiation is crucial for organizations navigating the shifting regulatory landscape.

Practices that qualify as “DEI” according to the US administration:

  1. Quotas or Affirmative Action tied to identity – This includes race-based or gender-based quotas for hiring or promotions.
  2. Racial & gender-based bias & privilege training – Programs that focus on addressing privilege, bias, or systemic inequalities based on these characteristics (race and gender).
  3. Systemic racism or sexism messaging – Discussions framed around the existence of systemic inequality or oppression based on race or gender.
  4. Guilt-based language – Programs that use guilt to induce responsibility for systemic inequities.
  5. Identity-based, supplier diversity programs – Diversity efforts that emphasize race or gender over business-driven goals.

Practices that companies may consider “DEI”, but are likely safe from scrutiny:

  1. Broad cultural improvement initiatives – General efforts aimed at improving team dynamics, alignment of values, or organizational culture.
  2. Workforce optimization programs – Programs focused on improving productivity and employee engagement without a direct link to identity politics.
  3. Skills-building initiatives unrelated to identity politics – Training programs on areas such as leadership development or technical skills that do not focus on race or gender.
  4. Metrics-driven analysis of workforce trends – Tracking and analyzing workforce demographics and trends, without specific DEI framing.

Understanding which initiatives fall under this narrow DEI definition is essential for companies that need to navigate these changes and avoid conflicts with the new executive orders.

Congressionally-approved laws requiring data collection, reporting, & workplace safety

Despite the political shifts, there remain strong, Congressionally-approved laws that require companies to maintain DEI-related data collection and reporting. These laws are still enforced, and failure to comply can result in penalties.

  • EEO Reporting: Employers with 100+ employees and federal contractors with 50+ employees are required to submit demographic workforce data through the EEO-1 Report. This report includes data on race, ethnicity, gender, and job categories, providing transparency and ensuring fair treatment across diverse employee groups.
  • Federal Laws Mandating Fair Treatment: Title VII of the Civil Rights Act, ADA, GINA, and ADEA continue to mandate fair treatment and reasonable accommodations for diverse employees. These laws prohibit discrimination on the basis of race, color, religion, sex, national origin, age, disability, and genetic information.
  • State and Local Regulations: States such as California, New York, and Illinois enforce additional laws that require pay transparency, board diversity reporting, and anti-harassment training. Companies must ensure compliance with both federal and local mandates to avoid legal risks.

Even with the Trump administration’s actions, these federally approved requirements remain in place – at least for now. This means that diversity & inclusion data collection and reporting are still crucial for compliance, regardless of changes to federal DEI policies.

Likely judicial challenges to the executive orders

The Trump administration’s executive orders, while impactful, are likely to face legal challenges that could delay or completely alter their implementation. Several constitutional concerns have been raised about the legality of these orders, particularly in relation to the 14th Amendment and Title VII of the Civil Rights Act, both of which prohibit discrimination.

  • Constitutional concerns: Critics argue that the executive orders may violate equal protection laws by potentially discriminating against employees based on their identity. The American Civil Liberties Union (ACLU) has already indicated its intent to challenge these orders, claiming that they infringe upon civil rights protections.
  • State vs. federal tensions: The orders could also create tension between state and federal governments, particularly in states where DEI initiatives are firmly entrenched in local policies. For example, states like California and New York have already implemented robust diversity measures at the state level, and federal mandates could interfere with these programs, raising issues of federal overreach.
  • Opposition from legal advocacy groups: Organizations like Lambda Legal, the Human Rights Campaign, and various state bar associations have voiced strong opposition to the orders. They argue that these restrictions undermine diversity efforts and violate constitutional protections. Judicial reviews will likely delay the full enforcement of these orders, giving companies some breathing room to adjust.

As these challenges unfold, businesses must stay informed of potential changes that could affect their DEI strategies and compliance efforts.

What does this mean for you? Your pending decision.

As you navigate these legal changes, it’s important to take stock of your company’s DEI strategy and prepare for the potential impact. The decision you face is whether to double down on DEI or reframe your approach in light of the new political landscape.

Two strategic paths:

  • Commit to DEI: For organizations that are fully aligned with DEI principles and have stakeholder support, staying the course might be the best decision. This involves reinforcing your company’s commitment to diversity and inclusion through strong messaging, both internally and externally. Emphasizing the business case for DEI—such as its role in innovation, employee retention, and improved performance metrics, can help mitigate political risks. Microsoft and JP Morgan, for example, have publicly committed to continuing their diversity efforts despite political pressures.
  • Reframe for compliance: If you’re facing resistance from stakeholders or operating in politically conservative regions, you might consider refocusing your DEI initiatives within a broader culture-first framework. This approach shifts the conversation from identity-based programs to a more universal focus on team alignment, employee engagement, and overall workforce optimization. For example, Bank of America has increasingly framed its DEI initiatives around the idea of “inclusive leadership,” which focuses more on values like respect and empathy than on quotas or identity-based measures.

What to consider:

  • Political & legal risk: What is your company’s risk tolerance in the current political climate? If you decide to double down on DEI, you must be prepared for potential legal challenges and scrutiny.
  • Stakeholder support: Do key stakeholders, including board members and senior leadership, support your DEI strategy? If not, a reframing may be necessary to align with their interests.
  • Employee retention & brand reputation: A failure to commit to DEI can lead to talent loss, particularly among underrepresented groups, and can harm your employer brand in the eyes of potential recruits.

Ultimately, the decision will depend on a balance of these factors. While there are risks associated with both options, aligning your DEI strategy with both the political climate and your company’s long-term goals will be crucial for sustaining success.

How Diversio can help:
With shifting legal risks, companies need data-driven DEI strategies more than ever. Diversio provides compliance-ready insights, risk analysis, and tailored strategies to help your business navigate this changing landscape—without losing momentum on DEI. 

Whether you’re doubling down on DEI or adapting to a new approach, we can help ensure that your organization remains compliant, engaged, and on track for long-term success. Connect with us today.

DEI in the EU: A Growing Priority with Big Penalties for Non-Compliance

Posted on by Laura McGee: Co-founder and Chief Executive Officer

For companies with operations in Europe, diversity, equity, and inclusion (DEI) are no longer “nice-to-have” initiatives. The European Union (EU) has implemented some of the most rigorous DEI regulations in the world, and failure to comply with these mandates can result in heavy fines—up to €10 million per country. As global DEI standards evolve, companies must reassess their strategies to ensure they are not only legally compliant but also aligned with the cultural shift toward greater diversity and inclusion in the workplace.

The EU’s comprehensive DEI reporting obligations

In 2023, the European Union enacted a comprehensive set of regulations aimed at improving diversity and inclusion in the workforce. These regulations mandate that companies with more than 100 employees report key DEI metrics, including:

  • Workforce diversity data (gender, ethnicity, disability status)
  • Employee engagement levels across different demographic groups
  • Training & career development programs aimed at underrepresented groups

This regulatory shift is part of the EU’s broader strategy to ensure that companies not only promote equality, but are also held accountable for their DEI performance. The penalties for non-compliance are significant, with fines reaching up to €10 million in each country where the company operates. This is a serious risk for multinational corporations, like Nestlé and Deutsche Bank, as they must comply with diverse regulations across multiple jurisdictions.

Contrasting EU regulations with Trump’s Executive Orders in the U.S.

While DEI has become an increasingly important mandate in the EU, the political landscape in the United States (U.S.) has taken a different direction under Donald Trump’s administration. Executive orders issued in January 2025 significantly restrict DEI initiatives in federal contracting and within federal agencies. These orders:

In contrast, the EU’s approach to DEI has been progressive, focusing on reporting, training, and career development mandates. The EU aims to promote DEI as a strategic business priority with clear accountability measures. Meanwhile, the U.S. is creating a legal environment where DEI practices face heightened scrutiny, particularly for federal contractors.

For multinational companies like Microsoft, this divergence presents a compliance challenge, requiring them to navigate the EU’s stringent DEI reporting requirements while simultaneously adjusting its DEI programs to align with U.S. policies that limit certain DEI activities, especially for federal contractors.

Companies operating in both regions face conflicting obligations

Multinational companies operating in both the EU and the U.S. face unique challenges in managing their DEI initiatives. The conflicting DEI policies in these regions require a careful balancing act to ensure compliance in both areas while maintaining a consistent approach to inclusion across their global operations.

  • In the EU: Companies must continue to meet the EU’s rigorous DEI reporting and compliance standards, ensuring that their workforce demographics, training, and engagement levels are publicly reported and aligned with EU expectations. These regulations are not optional, and the penalties for non-compliance can be substantial, particularly for companies with significant operations across multiple EU countries.
  • In the U.S.: Meanwhile, companies in the U.S. face restrictions on certain DEI initiatives, particularly those that involve race-based or gender-based quotas, training, or messaging. The Trump administration’s executive orders have created an environment where DEI programs could expose companies to legal and reputational risks, especially if they are tied to federal contracts.

For example, Google and Amazon – both major players in the U.S. and EU – must adjust their DEI strategies accordingly:

  • In the U.S., they may need to remove identity-based diversity training programs
  • In the EU, they must continue tracking and reporting demographic data to comply with European laws.

Risks to Consider: Political, Legal, Operational, & Reputational

As companies navigate these shifting DEI landscapes, it’s crucial to consider the risks of staying the course or backing down.

  • Political Risk: The political environment surrounding DEI is volatile, especially in the U.S. Companies that continue to push DEI initiatives, particularly those with government contracts, may find themselves at odds with federal policies. Conversely, backing down from DEI could invite backlash from employees, consumers, and advocacy groups, damaging the company’s reputation.
  • Legal Risk: Legal compliance is a primary concern for multinational companies. In the U.S., the executive orders pose legal risks for companies implementing race- or gender-based diversity initiatives, especially for federal contractors. In the EU, failing to comply with DEI reporting requirements could result in significant fines. Legal challenges to the executive orders could also create uncertainty, potentially leading to changes in the regulatory landscape.
  • Operational Risk: The shift in DEI regulations means that companies must rapidly adjust their internal policies, training programs, and data collection methods. The operational challenge of aligning with conflicting regional regulations can strain resources, particularly for global organizations that must adjust strategies for multiple jurisdictions.
  • Reputational Risk: DEI has become an important part of corporate reputation, and companies that back down from DEI commitments may risk losing the trust of both their employees and their customers. On the other hand, staying firm on DEI efforts, especially in politically conservative regions, could attract negative media attention and public backlash.

Your Choice: Stay the Course or Back Down?

The decision to stay the course with DEI or back down is not easy, especially when considering the competing pressures from various regions. We broke down the key factors for each strategy:

Stay the Course (Double Down): 

✅ Reinforce your company’s commitment to DEI.
✅ Frame DEI as a business strategy that drives innovation, retention, and performance.

Example: Salesforce continues to prioritize DEI despite political shifts, positioning DEI as part of its mission.

Refocus as culture-first: 

✅ Shift from identity-based DEI programs to broader cultural values.
✅ Prioritize your resources on developing programs to improve employee engagement, leadership development, and workforce well-being.

Example: Bank of America frames DEI initiatives as part of leadership development and corporate cult

What to consider:

  • Political & legal Risk: What is your company’s tolerance for risk in the current political climate? Staying firm on DEI could expose your company to legal and reputational risks, especially in the U.S. where federal contractors face more stringent regulations.
  • Stakeholder alignment: Does your organization have broad support for its DEI efforts? If key stakeholders, including leadership, are not aligned, a reframing of your approach might be necessary to maintain internal harmony.
  • Employee sentiment and brand reputation: Consider the potential impact on employee morale, talent attraction, and public perception. A failure to support DEI may result in talent loss, while pushing forward with DEI could risk alienating some employees or consumers.

How Diversio can help:

At Diversio, we specialize in helping global organizations navigate complex DEI regulations. Whether you’re staying the course or shifting to a culture-first approach, our data-driven insights and strategies ensure compliance while fostering an inclusive, high-performing workplace.

Need help aligning your DEI strategy with EU and U.S. regulations? Let’s talk.

Supporting CSRD & ESRS Compliance Across Europe: A How-to Guide

Posted on by Daniel Fellows

CSRD and ESRS Compliance in Europe

How workplaces can be compliant

Diversio helps companies comply with the new ESRS (European Sustainability Reporting Standards) regulations, specifically under the Corporate Sustainability Reporting Directive (CSDR), by streamlining the collection and analysis of key diversity and inclusion metrics. Diversio collects comprehensive data on diversity, including gender, race/ethnicity, sexual orientation, disability, mental health, caregiver, and immigration status. Additionally, employee experience metrics such as culture, fair management, career development, workplace flexibility, and sexual harassment are gathered to assess inclusion.

With this data, Diversio helps companies create action plans with custom recommendations, set measurable inclusion and diversity targets, and track progress. Diversio’s benchmarking data allows companies to compare their performance with industry standards. All data is fully anonymous, and the platform is GDPR-compliant, ensuring that companies meet both transparency and privacy requirements under ESRS.

1. Governance, Risk Management, & Internal Control

Companies must disclose their governance structure and processes, including how sustainability risks are identified, assessed, and managed. Diversio can indirectly support this by providing data-driven insights on diversity and inclusion risks, helping companies assess how well they manage workforce-related risks and fostering a more inclusive governance structure.

2. Sustainability Strategy and Business Model

Companies must outline how sustainability considerations (environmental, social, and governance) are embedded into their business strategy and how they affect financial performance. Diversio supports the “social” component of ESG by collecting diversity and employee experience data, which is crucial for shaping inclusive business strategies and aligning them with sustainability goals.

3. Materiality Assessment

Companies must conduct a materiality assessment to identify the most significant sustainability issues relevant to their business, including social aspects such as workforce diversity and well-being. Diversio provides benchmarking and in-depth diversity data to inform materiality assessments, helping companies prioritise diversity and inclusion as material issues.

4. Workforce and Social Factors

Companies must disclose diversity data, including gender, race/ethnicity, and other social factors, as well as metrics on working conditions, equal treatment, and career development. Diversio excels in collecting and anonymising diversity data across gender, race/ethnicity, sexual orientation, disability, mental health, caregiver, and immigration status. It also tracks employee experience, including workplace culture, fair management, and career development—directly addressing ESRS social factors requirements.

5. Diversity, Equity, and Inclusion (DEI)

Companies must report on DEI, including workforce composition and policies on promoting equality and reducing discrimination. Diversio helps companies collect detailed DEI data, create action plans with custom recommendations, and set inclusion targets. It also provides benchmarking to measure progress against peers and ensure compliance with ESRS diversity reporting requirements.

6. Stakeholder Engagement and Employee Participation

Companies must disclose how they engage stakeholders, including employees, in sustainability initiatives and decisions. Diversio’s employee surveys on culture, inclusion, and fair management give companies insights into how well they engage and include employees in the workplace, feeding into stakeholder engagement reporting.

7. Targets and KPIs for Sustainability Goals

Companies must establish and report on key performance indicators (KPIs) and targets related to sustainability, including social KPIs like inclusion and diversity. Diversio assists by helping companies set specific inclusion and diversity targets and track them over time, providing data for KPIs that align with ESRS reporting needs.

8. Compliance with GDPR and Data Privacy

Companies must ensure compliance with data privacy regulations such as GDPR, especially when handling personal data, including diversity metrics. Diversio ensures that all collected data is fully anonymised and GDPR-compliant, meeting ESRS data privacy requirements.

9. Action Plans and Remediation

Companies must outline action plans to improve any gaps in their sustainability performance, including social and workforce-related issues. Diversio’s platform helps create custom action plans for improving DEI based on the data collected, providing tailored recommendations to remediate any identified gaps in inclusion.

Summary of ESRS Requirements Covered by Diversio

In short, Diversio supports many of the workforce and social aspects of the ESRS, ensuring companies can meet their reporting obligations related to inclusion, diversity, & employee experience.

  • Workforce and social factors (e.g., diversity, inclusion, fair management)
  • DEI data collection and reporting
  • Materiality assessment for social issues
  • Stakeholder engagement (employee experience data)
  • Setting and tracking diversity/inclusion targets and KPIs
  • Action plans to address gaps in workforce diversity and inclusion
  • GDPR compliance for diversity data

How Diversio Can Help You Comply with ESRS and CSRD

Diversio offers a powerful suite of tools and services that are uniquely positioned to help employers comply with ESRS and CSRD, ensuring a proactive approach to collecting diversity metrics in the workplace.

Data Gathering & Analytics

ー Conduct anonymous surveys to assess workplace culture and identify harassment risks.
ー Use data analytics to monitor trends and flag potential issues before they escalate.
ー Track and document harassment incidents to ensure a timely response and compliance.

Comprehensive Training Programs

ー Access 95+ training modules, including best-in-class anti-harassment training.
ー Offer additional relevant topics such as Bystander Intervention and Allyship to foster a safer workplace.
ー Tailored training to fit the unique needs of your workforce and industry.

Anonymous Reporting Tools

ー Enable employees to report harassment anonymously, ensuring confidentiality and safety.
ー Provide employers with the ability to track and respond to reports efficiently.

Start your Journey today

By leveraging Diversio’s data-driven approach, companies can comply with ESRS and CSRD while building more inclusive and respectful workplaces.

For more detailed information, download the full PDF resource now.

Ready to get started? Contact us at hello@diversio.com today.

Navigating Sweden’s Discrimination Act and CSRD with Diversio

Posted on by Daniel Fellows

Sweden’s Diversity and Anti-Discrimination Laws

How Workplaces Can Stay Compliant

In Sweden, organisations must adhere to the Discrimination Act, a comprehensive law that safeguards individuals from discrimination on seven key grounds: gender, ethnicity, religion or belief, disability, sexual orientation, age, and transgender identity or expression. The law goes beyond simply preventing discrimination; employers are also required to actively promote equality and create an inclusive environment.

By ensuring compliance with these regulations, organisations can foster a workplace culture that values diversity and offers equal opportunities for all employees. This not only meets legal obligations but also contributes to a more dynamic and innovative workplace.

CSDR Workplace Reporting Obligations: What You Need to Know

Starting next year, the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) come into force.

ESRS S1 impose new reporting obligations on companies, including a focus on social factors, such as disclosing information on workforce diversity, including gender, age, and other key demographics, as well as their strategies for promoting inclusion and reducing inequalities. The aim is to enhance corporate transparency and ensure that businesses are actively working towards sustainability and inclusivity.

Organisations must prepare for these changes by collecting and analysing data on their diversity metrics to meet these upcoming requirements effectively.

The Opportunity to Drive Business Performance

Diversity and inclusion is not just a regulatory imperative. In Sweden, inclusive workplaces reflect nation’s diverse customer base, leading to better market insights, stronger customer relationships, and improved financial performance. Organisations that actively embrace diversity experience higher employee satisfaction and productivity, ultimately boosting their bottom line, driving key outcomes such as innovation, improved decision-making, & the ability to attract top talent.

How Diversio Helps Swedish Organisations

Diversio is a leading platform that empowers Swedish organisations to build inclusive workplaces. Using anonymous data collection and AI-powered insights, it identifies bias, benchmarks performance, and provides actionable recommendations. Diversio ensures compliance with DEI regulations while delivering the business benefits of a diverse, inclusive workforce. Key features include:

  • Anonymous Employee Data Collection: Ensures compliance with Swedish laws and tracks diversity metrics.
  • AI-Driven Insights: Measures employee experiences, identifies biases, and benchmarks against industry peers.
  • Actionable Recommendations: Provides solutions to drive diversity and inclusion.
  • Training Programs: Delivers comprehensive anti-discrimination and inclusion training to build a more inclusive environment.
  • Data Security: Ensures all data collected is fully compliant with GDPR and SOC2 standards.

Diversio offers a powerful suite of tools and services that are uniquely positioned to help employers comply with ESRS and CSRD, ensuring a proactive approach to collecting diversity metrics in the workplace. business benefits of a diverse, inclusive workforce.

Data Gathering & Analytics

ー Conduct anonymous surveys to assess workplace culture and identify harassment risks.
ー Use data analytics to monitor trends and flag potential issues before they escalate.
ー Track and document harassment incidents to ensure a timely response and compliance.

Comprehensive Training Programs

ー Access 95+ training modules, including best-in-class anti-harassment training.
ー Offer additional relevant topics such as Bystander Intervention and Allyship to foster a safer workplace.
ー Tailored training to fit the unique needs of your workforce and industry.

Anonymous Reporting Tools

ー Enable employees to report harassment anonymously, ensuring confidentiality and safety.
ー Provide employers with the ability to track and respond to reports efficiently.

Start your Journey today

By leveraging Diversio’s data-driven approach, comprehensive training, and anonymous reporting tools, Swedish organisations can effectively meet their legal requirements while building a more inclusive and respectful work environment.

Download the full PDF resource to access detailed insights on how Diversio can help your organisation comply with Swedish diversity laws and improve business performance.

Ready to get started? Contact us at hello@diversio.com today.

An Overview of Diversio for Organizations in the UK & EU

Posted on by Daniel Fellows

Diversio’s mission

Diversio’s mission is to create more inclusive, equitable, and diverse workplaces using data-driven solutions. Through its advanced platform, Diversio provides companies with tools to address hidden biases, promote diversity, and improve employee engagement.

The core of Diversio’s offering is its people and culture analytics platform. Powered by our proprietary AI, the platform collects employee feedback, measures inclusion, and delivers tailored recommendations. It provides real-time DEI (diversity, equity, and inclusion) metrics, enabling organisations to track progress and set measurable goals aligned with their DEI programs.

With a global reach, Diversio works with leading organisations across the UK, EU, and beyond. The platform’s flexibility allows it to adapt to regional DEI challenges while delivering actionable insights. Diversio is an essential partner for companies striving to enhance workplace culture and drive sustainable change.

How is culture, inclusion and belonging viewed in the UK & EU?

In both the UK and EU, there is a growing focus on diversity, equity, and inclusion. Legislation such as the UK’s Equality Act (2010) and the EU’s Equal Treatment Directive push companies to eliminate discrimination based on gender, race, disability, and sexual orientation. This regulatory landscape places DEI at the forefront of workplace discussions.

However, the approach to DEI varies by region. In the UK, there is a particular emphasis on race, gender diversity and social mobility. Efforts are being made to address disparities in employment and leadership. Meanwhile, in EU countries like Germany and France, gender equality and pay equity take centre stage.

Cultural differences also influence DEI priorities. For example, DEI programs in the UK may focus on increasing racial representation and social mobility, while EU countries may prioritise gender parity.

Common cultural and inclusion challenges in the UK & EU

Despite progress, DEI efforts in the UK and EU face several challenges:

  • Gender pay gap: Closing the pay gap remains a significant issue, with some industries lagging behind in achieving parity.
  • Ethnic and racial representation: The underrepresentation of ethnic minorities in leadership and decision-making roles continues to be a barrier.
  • Inclusive leadership: Building diverse leadership teams that foster inclusivity is still a work in progress.
  • Workplace discrimination and unconscious bias: Discrimination, both overt and unconscious, is a common issue across industries, affecting employee satisfaction and retention.
  • Cross-border DEI consistency: Managing DEI initiatives across multiple regions with varying regulations and cultural nuances poses challenges for multinational organisations.

Diversio’s tools & insights for DEI transformation

Diversio provides a suite of tools to help companies overcome these DEI challenges:

  • AI-powered DEI insights: Diversio’s platform uses artificial intelligence to gather feedback and provide an in-depth analysis of workplace culture.
  • Customisable Cultural dashboards: Organisations can track their DEI performance in real-time, setting specific goals and benchmarks.
  • Employee pulse surveys: These surveys measure employee sentiment and identify areas for improvement in inclusion efforts.
  • Expert-led training programs: Diversio offers tailored DEI training to help organizations build more inclusive cultures.

Ensuring compliance with UK & EU regulations

Compliance with DEI-related laws is essential for organisations operating in the UK and EU. Diversio’s platform helps companies meet the requirements of:

  • The UK’s Equality Act (2010) by providing data and insights to eliminate workplace discrimination.
  • The EU’s Equal Treatment Directive supports companies in promoting gender equality and preventing workplace discrimination across member states.

Global impact with local relevance and local expertise

Diversio’s clients have seen tangible results through their platform use, particularly in the UK and EU. For example, one UK-based financial services company reported a 20% improvement in employee engagement after implementing Diversio’s recommendations. In the EU, a technology firm saw significant progress in closing its gender pay gap after adopting Diversio’s AI-powered insights.

Upcoming webinar: Inclusive Performance Reviews

Join us for our final webinar of the year, led by Zakeana Reid, Chief Operating Officer at Diversio EDU. This free 1-hour session will focus on how to conduct performance reviews that foster inclusion and equity in your workplace. Don’t miss this opportunity to learn actionable strategies to enhance your review process. Register here.

By leveraging Diversio’s platform and insights, organisations can drive meaningful change and create more inclusive workplaces, whether in the UK, EU, or beyond.

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