More than half of UK businesses are changing the way they approach ethical policies and practices because of the Trump administration’s criticism of the “woke” agenda, research suggests.
Interviews with 250 general counsels and chief legal officers at leading UK organisations found that they are reacting to the pushback against diversity, equity and inclusion (DEI) initiatives in the US by reviewing – and in some cases scrapping – policies.
In the US, black public servants have been sacked and measures attempting to tackle racial inequality have been labelled “discriminatory” by the Department of Justice.
Following in the Trump administration’s footsteps, the Reform party has vowed to scrap DEI initiatives from councils it controls in the UK while the Blue Labour group has urged ministers to “root out DEI” to counter the threat posed by Nigel Farage’s party.
The law firm Freeths, which carried out the research, published on Thursday, found that of the organisations surveyed, all of which make more than £100m in revenue, 28% said they had made wholesale changes to initiatives including DEI and environmental sustainability, or abandoned them altogether, in response to US criticisms of the “woke” agenda.
A further 26% said that it has led to specific changes, while 32% said it had led to discussions about potential changes.
Philippa Dempster, senior partner at Freeths, which acted for 555 post office operators wrongfully accused of theft, fraud and false accounting in their high court victory, said: “The truth is that a drive for profit can significantly impact or impede ethical decision-making. Our research exposes a troubling reality: while businesses express commitment to doing the right thing, there’s still a significant gap between principle and practice. And even in the light of the Post Office scandal, we’re seeing some UK businesses abandon valuable ethical and moral initiatives in response to outside influence.”
The corporate legal leaders from five sectors – technology, retail, hospitality and leisure, energy and the public sector – overwhelmingly (83%) said that they believed that “doing the right thing” came secondary to profit in business decision-making within their organisation.
When asked how frequently profit motivations came into conflict with ethical and moral concerns at their organisation, 22% of respondents said very regularly, 32% said regularly, and 37% said sometimes.
In the US, companies including Amazon, Disney, Google and Meta have abandoned DEI policies in response to Trump’s actions.
The legal risk of discrimination cases in the UK mean protections afforded by the Equality Act limit the ability for rollback to the same extent. However, the former Conservative ministers Suella Braverman and Jacob Rees-Mogg have called for the act to be abolished, while Reform has said it would replace it and the research by Freeths suggests that many UK firms are already changing their behaviour.
Earlier this year, BT reportedly cut DEI initiatives from its bonus scheme for middle managers, while saying it remained “committed” to diversity principles.
Helena Morrissey, a former City fund manager, who chairs the Diversity Project, a cross-company investment and savings industry initiative, said the report – the first she had seen of its kind – was depressing. “After every scandal that’s cost so much money and shareholders have suffered as well, why would people think, ‘Oh, now we can take the foot off the gas when it comes to being ethical,’” she said.
“I understand that some policies or agendas have become sort of politicised but ethics is not. Ethics is all about doing the right thing. I don’t really see how it’s ethics or profits or how ethics are woke – that doesn’t really make any sense to me.”
The Freeths report did identify some “good news”, including the equality (race and disability) bill, which would compel employers with more than 250 staff to report on ethnicity and disability pay gaps.
