FTSE firms ditching ESG and DEI face PR hell
FTSE100 organisations are ditching their DEI and ESG policies. But the reputational (and probable bottom line) damage caused will be profound.
The Observer recently published an interesting article examining how frequently Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Governance (ESG) are mentioned within the annual reports of FTSE 100 companies. The article compares the reports from 2024 to those from 2023 and the findings are rather revealing, showing a significant decline in references to both DEI and ESG.
Key Findings:
- DEI Mentions: Dropped by 16%
- ESG Mentions: Fell by 22%
These statistics come from a study of 85 FTSE 100 companies’ reports. The study tracked terms like “diversity,” “equity,” “inclusion,” “equality,” and “fairness.” The results show a clear change in corporate language and priorities. This shift could seriously affect the reputation of these organisations.
Possible Reasons for the Decline:
- Political changes: Broader political shifts seem to influence the decline. This is especially true during Donald Trump’s second term as president. Trump has campaigned against DEI and ESG initiatives in the US. He has even threatened legal action against companies that use these terms.
- Corporate Backslide: After the 2020 Black Lives Matter protests, many companies promised to support DEI. However, now they are quietly removing or downplaying these terms in their public documents. WPP, one of the largest media companies in the world, removed all mentions of DEI. They also took out the words “equity” and “inclusion” from their 2024 report.
Campaigners like Pavita Cooper of the 30% Club have criticised this move, calling it a failure to follow through on public commitments to diversity and inclusion. People will view these actions as undoing the progress made since the Lord Davies Review of 2001, which started the push for more fairness in Britain’s boardrooms.
Unsurprisingly, both Shell and mining company Rio Tinto double-downed on ESG. There were three-times as many mentions in Shell’s 2024 annual report (6% of pages) compared to that of the previous year (2% of pages), whilst Rio Tinto’s 2024 report mentioned ESG on 28% of all pages against 16% in 2022.
Implications
In recent years, many organisations have focused on being socially and environmentally responsible. This has earned them praise, new partners, and investors. As a result, they have become more attractive employers. Abandoning these commitments could have serious reputational and financial repercussions for years to come.
Future outlook
When the political climate changes, will a new President reverse the anti-DEI and ESG stance? Will FTSE 100 companies change their stance too? How will they do it in a way that doesn’t make them seem insincere? It will require powerful storytelling to regain and build trust and credibility.
As we watch these trends, it will be interesting to see if companies change their branding, especially their employer brand. We will share our findings on this aspect soon.
For more details, you can read The Observer’s full article here.
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