The Editor’s Post: DEI is under threat, but can it hide in plain sight?

David Lyons 31st January 2025

Can the DEI agenda survive Trump's attack? Davos's diversity problem and fund managers feel ‘squeezed’ by Better Society Capital. This week’s view from the Pioneers Post newsroom.

I know what you’re thinking – ‘not another white man here to mansplain DEI to me’. But wait, I’m also going to talk about everyone’s favourite subjects right now: Donald Trump and Davos!

Still with me? Great, because the discussions about diversity, equity and inclusion which took place at the World Economic Forum annual meeting last week have significant implications for the impact community. (Check out our post-event round-up here.)

At Davos, Trump went on the attack against DEI. He boasted: “My administration has taken action to abolish all discriminatory diversity, equity and inclusion nonsense.” And he backed up his boasts with action: last week he cut federal DEI programmes, alongside ordering all federal DEI staff to be placed on paid leave.

Given the urgency of Trump’s assault on DEI programmes, you might take the impression that the world had made huge strides of progress on this front. If that was the case, you’d expect the make-up of the world’s elites assembled at Davos to reflect the global population, wouldn’t you?

Not so, according to Gosbert Chagula, co-founder of Startup Discovery School, which supports entrepreneurs from diverse backgrounds to resolve climate issues. Chagula wrote about his experience of attending Davos for Pioneers Post, concluding that the event was sorely lacking in contributions from BME leaders.

A lack of progress on DEI was also a topic raised in the latest external review of the UK’s wholesale social investor Better Society Capital, as reported this week by my colleague Laura Joffre.

The review said: “It is no coincidence that most people put forward by BSC for interview during this quadrennial review were male and white, given the continuing challenge of diversity within financial services, where BSC could play an exemplary role.”

Further evidence of the lack of progress the DEI movement has made comes from a survey of UK social enterprises and charities, published this week by consultancy Eastside People and third sector CEO membership body Acevo: 99% of respondents said equality, diversity and inclusivity was ‘important’ or ‘very important’. However, most (56%) rated their progress as ‘starting out’ or ‘developing’. Read more in the Impact World This Week.

Most of you would say the DEI movement hasn’t yet fulfilled its promise, but whatever progress has been made is now under severe threat from the US president and his oversized influence. Back at Davos, Chagula said: “It was noticeable that the Trump inauguration influenced the views of a sizeable cohort.”

But how that influence will manifest in business decisions appears to be nuanced. Both Reuters and CNBC quoted CEOs at Davos emphasising they remain committed to the principles of DEI but suggesting the acronym itself may be dropped to avoid swimming against the political and cultural currents. Many of the CEOs pointed out the commercial benefits of having a diverse workforce. (We have also seen that diversity produces success in the impact investment arena.)

What we can see here is a battle between market forces and political influence playing out in the exact opposite way to how Trump would have you believe. Rather than DEI being a political agenda which undermines meritocracy and stunts businesses success, CEOs want to develop diverse workforces because they deliver better results. But the political right has chosen its battle and Trump is leading the charge, regardless of its impact on society and the economy.

Crucially for the impact community, bankers told Reuters that DEI work will carry on and investment in diversity will continue, but it won’t be branded or foregrounded as it has been during the Biden administration.

Which brings us to the curious case of Alexandr Wang, CEO of start-up Scale AI, who seems to be tying himself in knots in an attempt to appease both sides. Speaking to CNBC he said: “We have no option but to be meritocratic ... And in the process, we achieve diversity.”

But Reuters noted that Wang posted on X to cheer Trump’s executive orders and called for the promotion of MEI (merit, excellence and intelligence) in tech. Brace yourselves for a new acronym.