Explainer: What is DEI and why is it under attack?

Jasmine Crittenden, Claudia Hayman and Nabeela Rasheed 

From the beginning of his second term in office, US President Donald Trump has issued a series of executive orders aimed at deterring diversity, equity and inclusion (DEI) efforts.¹

One such order states:

“Hardworking Americans who deserve a shot at the American Dream should not be stigmatized, demeaned, or shut out of opportunities because of their race or sex.”

President Trump is reversing the typical narrative around DEI which is intended to ensure a fair go for people of all backgrounds. The order claims “illegal DEI” efforts undermine "hard work, excellence, and individual achievement".

Corporate America has scrambled to work out what this means for companies. By and large, they appear to have capitulated to the pressure, with the likes of Meta and Amazon abolishing DEI programs.

The reaction in Australia has been mixed, with companies such as Google and Meta pulling back some of their DEI policies, but that’s not the whole story.

What is DEI?

DEI forms part of the long project of equality for all people. It has gained momentum in recent years, as social movements including #BlackLivesMatter and #MeToo called upon businesses to address systemic inequalities in the workplace. DEI fosters environments where workers of every background can belong, be valued, and do their best work. 

DEI recognises that equality is located within the patterns of society and history, which have operated to privilege some and exclude others. When we don’t all arrive at work on equal footing, identical treatment may in practice entrench disadvantage.

For these reasons, DEI initiatives aim to correct inequality and ensure fairness in workplace practices, including in recruitment, promotion and pay. But DEI involves more than crunching the numbers of wage gaps and quotas – it impacts the ‘soft tissue’ of the organisation, forming healthier workplace cultures and systems where workers are treated with dignity and experience psychosocial safety.

What about merit?

Workplaces where effort and talent determine success – rather than privilege, favouritism, or arbitrary obstacles – will reward merit and ensure inclusion. In fact, DEI is an essential prerequisite to constructing a merit-based workforce. If systemic inequalities are not addressed, measurements of ‘merit’ may reflect privilege instead of real talent. The best person for the job may not even get into the interview room or be considered for the promotion simply because of biases and barriers associated with their race, gender, sexual orientation or other personal characteristics. For example, a UNSW study of the Australian public sector found culturally inclusive hiring processes – such as First Nations ‘yarning circles’ – were critical to attracting and identifying suitable candidates. 

DEI initiatives aim to bring true merit forward, ensuring talent in all its diverse forms is recognised and rewarded in the workplace.

Is DEI good for business?

Research by McKinsey & Company demonstrated a strong business case for DEI. The 2023 study – spanning 1,265 companies, 23 countries and six global regions – found that companies in the top-quartile of gender and ethnic diversity had a 39% greater likelihood of financial outperformance than their peers in the bottom-percentile.

Diversity was not only beneficial to the companies’ bottom line – it was also associated with greater workplace satisfaction and social impact. Prioritising DEI also helps companies gain an edge in innovation, recruitment, and customer attraction and retention.

How have US companies responded to the backlash against DEI?

Many US corporations appear to have acceded to political and legal pressure. Mentions of ‘DEI’ in Fortune 100 reports dropped by 98% from 2024 to 2025, reports Forbes and many companies have scaled back DEI-related initiatives. These include Meta, Google, Amazon, Walmart and PepsiCo.

Meta axed its DEI-related team, representation goals and training programs. Amazon eradicated DEI-focused roles and hiring quotas. Pepsico abolished the role of DEI officer and its DEI strategy.

The term DEI has become "charged", Meta wrote in an internal memo. "It is understood by some [to] suggest preferential treatment of some groups over others." The memo also referred to the 2023 US Supreme Court decision that banned affirmative action in college admissions.

While the retreat from DEI is alarming, it is important to note that some companies have stood their ground, by maintaining or even extending initiatives. 

"Our North Star of dignity and respect for everyone, and our work to that end, will never waiver," said Apple CEO Tim Cook.

And, overwhelmingly, shareholders have backed them. More than 98% of voting shareholders rejected anti-DEI proposals at Apple, Pfizer, Goldman Sachs, BMS, Levi Strauss, American Express, Coca-Cola, John Deere, Gilead Sciences, Visa, Walt Disney and Costco in early 2025.

Some companies, despite having abandoned DEI, have kept related programs. Approximately 78% of Fortune 500 reports in 2024-25 discussed diversity and related initiatives, albeit in different language, says The New York Times. For example, PepsiCo introduced an ‘inclusion for growth’ strategy. 

However, Cook has admitted that Apple may yet need to make changes "as the legal landscape evolves" and President Trump continues to exert pressure. "Apple should get rid of DEI rules, not just make amendments to them!" he wrote on Truth Social.

Concerns also remain that Meta, Amazon and others will have a domino effect on other businesses.

What is the situation in Australia?

The Australian Labor Party’s landslide victory in 2025 indicated that anti-DEI rhetoric in Australia has not attained the level of support it has in the United States. Former opposition leader Peter Dutton’s comments about DEI mirrored those of the Trump Administration. In contrast to the United States, these comments were met with little voter support.

Professor Andrew Stewart, who specialises in Work and Regulation at the Queensland University of Technology Business and Law Faculty, attributed this to Australian workplace discrimination laws being "stronger than [that of] the US".  But a closer look at the US framework might indicate otherwise.

Although the legislative framework in the United States operates differently to the Australian framework, it can be argued that it is (or was) similarly robust. Until early 2025, it included the Biden Administration’s executive orders on equity, relevant state law, and a comprehensive legal framework that the Equal Employment Opportunity Commission is still required to enforce. Furthermore, DEI and anti-discrimination are not one and the same. While they can intersect, they have two different functions: 

1. DEI policies seek to open up the workforce to a more heterogeneous employee base;
2. Anti-discrimination laws seek to protect that employee base from unfair treatment. 

Professor Stewart summarised the Australian approach to DEI in the following statement:

"A lot of [DEI] programs are voluntary, so you can wind them back… but we do have [anti] discrimination laws, and there will be times when failing to pursue diversity, equity, and inclusion might put you in breach of those laws."

The Australian legislative framework targets discrimination in the workplace and in broader civil society. Australia has developed legislation regulating fair working conditions, race discrimination, disability discrimination, and sex discrimination. But unlike the United States, the Australian federal government does not issue DEI-related executive orders to corporations. Instead, governmental bodies use reporting mechanisms to signal that corporations have a responsibility to promote diversity and inclusion within their employee base. 

While the Australian framework protects against non-inclusivity in the workplace, it does not necessarily mandate that corporations actively improve diversity and inclusion within their employee base.²

However, the Fair Work Ombudsman publishes a ‘Diversity and Inclusion Strategy’ every few years, outlining the tools it uses to promote diversity and inclusion in corporations. In its 2024-2027 Strategy, the Office of the Ombudsman included a Corporate Board, which will monitor the implementation and effectiveness of the recommended diversity and inclusion policies. Company compliance with the Corporate Board is voluntary.

Why is the debate about DEI different in Australia vs. the United States?

One possible explanation for the different approaches is that the United States and Australia have used disparate language to inform their respective politico-legal discourses around diversity, equity, and inclusion. In the United States, the acronym ‘DEI’ has been charged with varying connotations depending upon each administration’s political agenda. However, no comparable, overarching terminology had been used in Australia, prior to DEI becoming such a hot-button issue in the United States. Thus, the ‘anti-woke’ character assigned to DEI by the Trump Administration has not translated across in the Australian context. 

For example, Peter Dutton used the phrase ‘culture, diversity, and inclusion’, rather than ‘DEI’, to refer to the same issue. The Fair Work Ombudsman refers to the subject as ‘diversity and inclusion’. Workplace Australia, a government agency facilitating recruitment, also refers to the subject as ‘diversity and inclusion’. A major Australian organisation that promotes this cause goes by the name Diversity Australia, rather than DEI Australia. These slight differences in language indicate that there is no equivalent to ‘DEI’ in the Australian context that would evoke similar levels of political division.

What is the impact of the Trump Administration’s anti-DEI movement on Australian corporations? 

Australia has not escaped the Trump administration’s anti-DEI movement unscathed. Its flexible approach has left it vulnerable to external influence. 

Due to the market influence of major US-based corporations in Australia, US DEI policies have potentially impacted their approach to diversity and inclusion in their Australian subsidiaries. In 2025, Meta and Google opted out of Sydney’s Mardi Gras, while MasterCard and PepsiCo refrained from posting their usual Pride month content both in the United States and Australia. 

US-based law firms A&O Sherman, White & Case, Sidley Austin LLP, and Latham and Watkins LLP, all of which have offices in Australia, were subject to executive orders to scale back DEI. The orders stated that non-compliance could result in loss of US government contracts, removal of national security clearances, and restricted access to federal buildings. In response, Latham and Watkins removed DEI related content from its website. 

Australian universities have also faced funding cuts to medical research projects, resulting from an executive order detailing the ‘anti-woke agenda’ of the Trump Administration. Whereas the United States used to be Australia’s biggest research partner, this move has cast doubt on its viability in future. 

Nonetheless, given that DEI in Australia is not as politically sensitive as it is in the United States, corporations have faced less resistance to their DEI policies. Coca-Cola has resisted the Trump Administration’s orders to scale back DEI not just in the United States, but in Australia too. Whether or not corporations in a similar position choose to wind back their DEI policies in Australia might depend on a number of factors, including their size and political bargaining power, stakeholder interests, and prior planning and investment into DEI policies.

Jasmine Crittenden, Claudia Hayman and Nabeela Rasheed were Australian Human Rights Institute interns in Term 2, 2025.

Endnotes