While many are setting new goals for 2025 and looking toward the future, we’re also grappling with ongoing uncertainties—from shifting political dynamics to the evolving economic landscape.
Cap Inclusive has always been about leading difficult conversations, bridging the gap between those happening behind closed doors among people who tend to agree. We’ve always tried to avoid interjecting our personal opinions into these important conversations by taking a moderator role. Given the current media and political landscape, we thought it was our role to remind everyone that DEI isn’t about quotas, hiring unqualified people, or stealing anyone’s job.
DEI is about performance.
Creating a work environment where everyone can strive and contribute to their fullest.
Making your employer brand attractive to the best candidates.
Promoting high potential employees by providing fair and quality feedback that helps them grow.
Providing flexibility and balance to retain employees as their personal lives evolve.
Thinking about knowledge transfer between generations and improving employee performance.
That is what DEI is about, and investing in such programs results in improved employee and employer experience, which in turn leads to better financial performance.
In this edition of the Cap Inclusive newsletter, we explore the state of Diversity, Equity, and Inclusion (DEI) in corporate America. We focus on the recent rollbacks of DEI initiatives and how this cultural shift is affecting the workplace and society. Despite these setbacks, we’ll explore why DEI continues to matter, highlight stories of resilience, and discuss how we can keep pushing for a more inclusive future.
We proudly support the open letter by What in the Tech, urging Canada’s tech community to stay committed to DEI principles. As the letter powerfully states:
"We must protect the Canadian values of equity, inclusion, and collective responsibility in our tech ecosystem. If we abandon those values now, we risk losing everything that makes Canada a place where innovation thrives—not just for a select few, but for everyone."
We encourage you to read the letter and consider signing it.
Over the past few years, DEI initiatives have been at the forefront of public discourse, especially now, with the Trump administration taking a sharp turn away from policies aimed at fostering inclusivity. Since President Trump's inauguration on January 20th, several federal DEI programs were scaled back or eliminated, most notably in government agencies and among contractors. Indeed, within the first week of his second, non-consecutive term, the 47th president set the tone and made clear his stance on DEI by signing an executive order ending the Equal Employment Opportunity Rule, first signed by President Lyndon B. Johnson in 1965, as President Trump calls for “restoring merit-based opportunities,” perpetuating a myth that DEI initiatives result in unqualified candidates of colour. Furthermore, President Trump also banned transgender female athletes from women’s sports and declared that there are only two sexes, male and female, and that they cannot be changed; all federal agencies will henceforth use the term “sex” and not “gender” in all applicable policies and documents.
Unfortunately, as per Paradigm’s State of Culture and Inclusion Report, 2025 seems to be the year in which “anti-diversity activism move[s] from the fringe to the mainstream [...] where the acronym ‘DEI’ [becomes] a scapegoat for broader societal issues, or part of a pejorative term (‘DEI hire’) used to discredit the accomplishments of women and people of colour.” While these rollbacks represent a significant setback for DEI efforts, we must remain optimistic. Across the corporate sector, advocacy groups, and local governments, many are doubling down on DEI initiatives, demonstrating that progress is still possible. Some familiar brands pushing ahead with inclusive policies include Costco, Ben and Jerry’s, Old Navy, and more.
The growing backlash against DEI programs isn’t solely the result of political rhetoric. Support for these initiatives has hit an all-time low, with only 52% of American workers expressing support for them. That begs the question: Why have these programs, which once enjoyed broad support, now become so contentious?
Much of the resistance comes from the perception that DEI efforts are either ineffective or superficial. In many organizations, DEI initiatives are seen as “check-the-box” exercises with little to no real impact. As one former DEI executive put it, “We were hired to lead change, but it quickly became clear that leadership wanted optics, not transformation.”
However, the business case for DEI remains strong. McKinsey’s 2023 report showed that companies with greater ethnic diversity are 39% more likely to outperform their peers. Specifically, companies in the top quartile of inclusion see 2.5x higher shareholder returns and 1.3x higher profitability.
DEI isn’t just the right thing to do—it’s a smart business strategy. Companies that embrace inclusivity attract top talent, improve employee satisfaction, and see better financial outcomes. Moreover, research shows that 59% of Americans surveyed oppose rolling back federal efforts to promote diversity, and 39% of employees would leave their current jobs for a more inclusive company. So, while it’s easy to dismiss DEI as an “extra,” it’s clear that organizations that fail to prioritize it risk losing out on both top talent and customer loyalty.
Despite the opposition, DEI efforts are far from over. Many companies, particularly in the private sector, have doubled down on their commitment to diversity and inclusion. Apple and Microsoft, for example, continue to prioritize DEI in hiring and employee development, recognizing that diverse teams are critical for innovation. In fact, 486 of the Fortune 500 companies still display DEI statements on their websites, signalling that, for many, inclusivity remains a non-negotiable core value.
Local governments are also taking action. The City of San Francisco, for instance, reaffirmed its commitment to inclusivity in response to federal bans on diversity training. These efforts show that DEI is not just a political talking point; it’s a deeply ingrained value for many communities and organizations that believe in the long-term benefits of diversity.
Want to learn more? The World Economic Forum has listed organizations that are paving the way for more inclusive practices and are proving that DEI efforts can have a lasting, positive impact.
As we look to the future, it’s clear that DEI cannot be treated as a one-off initiative or a tool for PR. To see meaningful, long-term change, organizations must adopt a comprehensive, outcomes-driven approach. Research from Harvard Business Review outlines strategies that have proven effective in driving DEI success:
Outcomes-Based & Data-Driven: Workplace culture is intangible. Companies need to set clear goals and track progress using hard data, like employee satisfaction surveys, pay equity audits, and promotion rates. This approach ensures that DEI efforts are continually refined based on what’s working and what isn’t.
Systems-focused: DEI isn’t just about individual behaviour; it’s about creating systemic change. Policies, practices, and organizational norms need to be adjusted to support inclusivity at every level, and leaders must be held accountable for driving this cultural shift.
Coalition-Driven & Clear Communication: DEI benefits everyone. Successful initiatives focus on the collective win—better outcomes for employees, higher engagement, and stronger financial performance. By framing DEI as a universal value, organizations can avoid divisive rhetoric and create a more cohesive, inclusive culture.
At Cap Inclusive, we use these principles to guide our work with clients, ensuring that DEI programs aren’t just initiatives but catalysts for lasting change. By gathering insights and data directly from employees, Cap Inclusive’s DEI scorecard is designed to help organizations identify and prioritize People & Culture issues with the most significant financial impact; it clearly assesses the financial benefits associated with investing in a better employee experience.
If you're interested in learning more about this tool, reach out to roxanne@capinclusive.com
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