The Future of DEI and ESG in a Hostile Political Environment

The Business of Fashion Podcast

In the late 2010s, and particularly after George Floyd’s murder in 2020, the fashion industry appeared to embrace a progressive awakening on issues like racial justice and climate change. Diversity, equity, and inclusion (DEI) departments were established, and companies announced ambitious sustainability targets. Yet, from the outset, critics - often from the same communities these initiatives aimed to support - questioned the authenticity of this activism, suggesting it was more about marketing than meaningful change.

Now, those sceptics may have been proven right. Following the 2023 Supreme Court ruling against affirmative action, companies have begun scaling back hiring initiatives, grants for Black founders, and other DEI efforts. Sustainability commitments are also under scrutiny, with the industry far behind its climate goals and facing a hostile political environment in the US.

Executive editor Brian Baskin is joined by sustainability correspondent Sarah Kent and senior correspondent Sheena Butler-Young to untangle the future of DEI and ESG (environmental, social, and governance).

Key Insights:

• Diversity and inclusion in fashion was built on already fragile foundations. “Most companies didn’t have a DEI department before George Floyd,” Butler-Young points out. She explains that these departments were often created hastily and emotionally, which left them vulnerable to becoming performative. “We never moved beyond that conversation into ‘how is this good for business? Why does this matter for a company beyond social good?’”

• "The acronym DEI has become so politicised,’” continues Butler-Young. "Something that started off as having some good intentions and some really value-driven tenets, and suddenly it's co-opted and becomes something almost derogatory." Companies are now moving away from the language, but that often means moving away from the work as well.

• The story in the world of sustainability contains some parallels. “What we’ve begun to see in a handful of cases is a quiet reframing of sustainability commitments, making them less ambitious and, in some ways, more realistic,” says Kent. This includes “the restructuring of sustainability teams, significant layoffs, and a shifting focus.”

• Although sustainability efforts are losing traction in the US, Kent points out that European regulations will keep the pressure on global brands. “From an investor standpoint, this is a compliance issue - companies need to meet laws or face significant penalties, which is obviously not good for business.”

Additional Resources:

• What Fashion’s Advocacy Will Look Like in the Trump Era
• Trump’s Impact on Fashion Takes Shape | BoF

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