The Future of DEI and ESG in a Hostile Political Environment

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6 • 770 Ratings

🗓️ 10 December 2024

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

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.”

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Transcript

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0:00.0	Hello and welcome to the debrief from The Business of Fashion, where each week we delve
0:12.1	into our most popular BOF professional stories with the correspondence who created them.
0:16.9	I'm executive editor Brian Baskin.
0:19.3	In the late 2010s, and especially after George Floyd's murder in
0:23.2	2020, the fashion industry seemed like it found religion on racial justice, climate change,
0:28.6	and a host of other progressive issues. But even as company after company announced new
0:33.5	diversity, equity, and inclusion departments departments and ambitious emissions targets, there were
0:38.1	always voices often in the same groups companies said they were trying to help, who said this
0:43.2	new activism was more about selling products than making the world a better place.
0:48.0	They predicted the industry would abandon their new causes as soon as they hit their first roadblock.
0:52.8	And it's starting to look like those critics
0:54.6	might have had a point. Companies began quietly pulling back on hiring initiatives, grants for black
1:00.2	founders, and other DEI efforts in 2023 after the Supreme Court ruled some affirmative action
1:05.9	programs unconstitutional. And this has threatened to turn into a full-on stampede after Donald Trump's
1:11.2	election in November, especially after Walmart, the world's largest retailer said it would
1:16.5	drop most of the DEI programs it launched in 2020. And there's mounting concern about a similar
1:22.0	retrenchment with sustainability, where the fashion industry is falling well short of its climate
1:26.6	goals and facing a similarly hostile political environment in America.
1:30.9	Is this really the end of fashion's bet on the value of its values?
1:35.4	With me today to discuss is my co-host, Sheena Butler Young, who is also Business of Fashion's senior correspondent covering workplace and talent,
1:43.5	and our chief sustainability correspondent, Sarah Kent. Hello, Sarah workplace and talent, and our chief sustainability
1:45.1	correspondent Sarah Kent. Hello Sarah and hello, Shina. Welcome to the debrief podcast. Hi, Brian. Thanks for
	...

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