ESG & DEI

A retreat from corporate social priorities

One of the earliest actions taken by the second Trump administration was an executive order — issued on Jan. 20, 2025 — to dismantle diversity, equity, and inclusion (DEI) programs in the federal government, part of a broader pushback against environmental, social, and governance (ESG) investment principles.

“ESG speaks to what investors care about in terms of how they make money; in short, it speaks to their values.”

While the U.S. has largely lagged behind other countries in its embrace of ESG as an investment philosophy, ESG had grown in prominence in recent years, with some support from large institutional investors and the Biden administration.

In 2021, the SEC enforcement division launched a climate and ESG task force. And in a 2024 speech, SEC director of enforcement Gurbir Grewal declared that “ESG speaks to what investors care about in terms of how they make money; in short, it speaks to their values.”

The Trump administration, however, fundamentally opposes ESG principles. In addition to rolling back Biden-era environmental rules and regulations, the president has focused his attention on DEI programs in effect at both public and private companies, which he has called wasteful and discriminatory.

Several subsequent actions in 2025 highlight the administration’s opposition to DEI:

In February, the Federal Trade Commission (FTC) announced the formation of a task force to investigate and prosecute unfair, deceptive, or anticompetitive labor market practices.

In March, the Equal Employment Opportunity Commission (EEOC) issued new guidance on DEI-related discrimination in the workplace, noting that DEI policies or practices may be unlawful under Title VII of the Civil Rights Act of 1964.

In July, the Department of Justice issued a memorandum advising recipients of federal funding that discriminatory practices — including DEI programs — are unlawful under federal antidiscrimination laws.

Seeking to avoid loss of federal funds, public shaming by the administration, and potential bias claims, employers in various industries have quietly relabeled or abolished DEI practices and roles such as chief diversity officer. As a result, there was far less public discussion or promotion of DEI programs in 2025 than during the Biden and Obama administrations.

In June, the U.S. Supreme Court struck down a legal standard that required a heightened burden of proof for reverse discrimination lawsuits. This decision, in Ames v. Ohio Department of Youth Services, has opened the door to litigation from nonminority group plaintiffs alleging DEI programs and other practices were discriminatory.

In October, the EEOC regained a quorum for the first time since January 2025. The agency is expected to issue formal guidance on and begin adjudicating what constitutes “illegal DEI,” among other stated administration priorities, such as reverse discrimination protections and combating anti-American and religious discrimination.