Companies Change How They Talk About Diversity Amid ESG Backlash

Political backlash to ESG is causing some companies to re-think the language they are using to describe their diversity, equity and inclusion initiatives, according to a new study.

Nearly one-third (31%) of 125 major corporations surveyed in the past year by the Association of Corporate Citizenship Professionals, say they have adjusted their language describing DEI projects this year, and 17% have reduced external communication on diversity initiatives. Still, the study found companies remain committed to DEI projects, with 83% saying their initiatives remain the same.

The findings released Monday come as more than 20 states have enacted laws opposing environmental, social and governance policies, including a law in Texas restricting insurance companies from considering ESG factors and another in Montana requiring that investment decisions only be based on financial factors.

“In this divisive climate, companies are adapting by refining how they communicate their DEI efforts and increasing legal oversight of program details,” Carolyn Berkowitz, president and CEO of the professional resource group, said.

• A third of corporations cited facing heightened oversight or legal scrutiny of their DEI initiatives.
• The report also found 28% of corporations had used the term “ESG” less in communications. The survey did not include a breakdown of alternate terminology.
• A quarter of companies said they have implemented technology including artificial intelligence to help them report on ESG.