Rolling back on Sustainability: a spotlight on DEI

Adam Gates, Becky Mackarel and Richard Plaistowe, Odgers Interim, Financial & Professional Services Practice hosted a webinar in which sustainability expert Tracey Groves explored the trends she is seeing given that ESG and DEI have come under intense scrutiny.   

In March 2025, the US formally rejected the UN Sustainable Development Goals (SDGs). A decision which the Harvard Forum on Corporate Governance noted marked a significant departure from previous bipartisan support for multilateral sustainability frameworks. The move came in the wake of controversial Executive Orders from the White House on ‘Ending Illegal Discrimination and Restoring Merit-Based Opportunity’ and ‘Ending Radical and Wasteful Government DEI Programs and Preferencing.’

Sustainability and DEI strategies have been scrutinised and come under attack. Clearly, the Trump administration wants to see a rolling back of such strategies, which raises numerous questions for organisations across the world.

Last week (26 June 2025) we ran a webinar on ‘Rolling back on Sustainability: a spotlight on DEI’ which covered a lot of ground in relation to this changing landscape. Our speaker Tracey Groves is Partner, Sustainable Business & ESG Advisory Practice at law firm DWF. You can find DWF’s informed perspective on the legal risk of taking a backward step on DEI here, but with our webinar we deliberately chose to look at the issues through the wider lens of why and how company leaders should ensure sustainability efforts,  including DEI, remain anchored.

Tracey set the scene by addressing the moral, economic and corporate governance drivers around DEI and Sustainability. She wondered whether Sustainability is becoming once again the poor cousin to other short-term issues. But she added the compelling point that Mother Nature is driving climate change, not businesses or politicians. Yet as we know, politicians loom large in the current discourse.

We designed our webinar to glean insights from participants too. It included three polls. The first asked participants whether they had modified their ESG policy to reflect the rise in anti-ESG sentiment and actions. A resounding 82% answered “no change at all”, with the remaining 18% selecting “a little bit of change.” No one opted for the third option: “a lot of change”.

Tracey said she felt “quite positive” about this finding as it showed organisations were sticking to their guns. “However, this volatility is not going to go away,” she observed. “Having a long-term vision and staying constant with that is really important.”

For companies signed up to initiatives such as the UN SDGs or OECD Responsible Business Conduct, rolling back on Sustainability is in effect “a massive disconnect” that throws into doubt the integrity of a strategy and a company’s commitment to doing the right things. A big danger of 90-day earnings cycles in businesses is that this breeds 90-day behaviours. “I see this all of the time,” said Tracey.  “Actually, we need to see leaders being brave, being ethical, being informed, and consulting about how we can protect the long-term values of companies that we are running.”

Tracey recently heard a CEO explain that the business is growing so fast that it will not meet its 2030 Sustainability targets which are absolute in nature. But he remained committed to delivering on Sustainability.   

“He said, and this I thought was so strong, ‘we're always reframing our strategy, but our North Star and our commitment to doing the right thing has remained constant. And that is the story we will tell.” While targets are obviously important, commitment is essential. Strategy is nothing without it.

Our second poll question asked participants whether they are consulting with their people on how the increased scrutiny and challenges on DEI is affecting them. 11% were not consulting at all, 61% were consulting a little bit via informal chats, and 28% were doing “a lot” of internal consultation through channels such as listening posts and focus groups.

Tracey applauded those companies fostering an environment for constructive debate and dialogue. “You don't necessarily have to come up with a definitive resolution or solution,” she said. “But if you engage and involve people in some of those choices and acknowledge the things that are happening out there, the more people will feel that they matter and that you are taking this seriously. What I'm seeing is those organisations who are doing this is are learning so much. We always underestimate the power of conversation.”

Our third and final poll question asked where pressure on their business is primarily coming from. No surprise that the top answer (40%) was the US, followed by “US and Europe (including UK)” at 33%.

Yet while Trump’s anti-DEI culture war is undoubtedly making waves, it remains to be seen whether this brings about significant change. Research published on 25 June 2025 in FT SustainableViews reveals that in 2024 Conservative activists filed a record number of anti-DEI shareholder proposals – 13 in comparison with just one in 2021 – but this is still below the number of pro-DEI resolutions. Investors have rejected nearly all corporate anti-DEI resolutions, with average support below 2%. Reassuringly, even though the attacks have gathered pace, data shows 97% of investors remain firmly in favour of DEI.

This appears to hold true across different ownership structures. “The firm that I work in, DWF, was taken private in 2023,” says Tracey. “The pressure on us as a professional services firm to hold on to our ESG strategy and commitments has not wavered whatsoever. They see this as a multiplier and as an imperative in terms of exit strategy.”

Our webinar was highly engaging and Tracey’s insights into the trends she sees sparked a series of interesting questions.

• To what extent have you seen firms loosening their ESG approach? And can this be interpreted as a reaction to the stance of the US government?
• Should ESG be replaced by ESD (“emerging, strategic and disruptive” factors)?
• What is the impact of regulators the FCA and PRA walking back on plans to publish new DEI rules?
• Will localised differences lead to businesses becoming more segregated in a globalised world?
• Many companies understand the concept of the moral compass. However, at a senior level, the challenge appears to be the more extreme expectations, often at a very individual level, which arguably can also go against the views of the majority. The risk of the anti ESG sentiment means that senior leaders can use this as an excuse not to recognise the individual expectations. Is this something you're seeing?
• Are you starting to see a different position depending on how big a public spotlight there is on the business?

Tracey provided a series of wise responses, but of course these are not the kind of questions that are easily answered. Organisations should proceed with care and try to learn from their peers.

“I genuinely think that we've got to learn from and help each other navigate this maze,” said Tracey. “Because there is no right answer. By the way, I am asking everyone. If I knew what the answer was, I would share it with you!”

Given the speed of change, we will revisit this topic soon.