The DEI domino effect: Why we can't ignore the backlash from across the pond

As political tides shift in the US, many firms are pulling back on their DE&I commitments, restructuring or scrapping entire departments in response to legal challenges and cultural pressure. And the ripples are already reaching UK shores.

This isn't just another culture war headline—it's a real, tangible issue that UK organisations, especially those working with global partners, need to pay close attention to.

The US retreat

Let's be clear: the shift in the US isn't subtle. In the last 18 months, we've seen lawsuits challenging corporate DE&I programmes, states banning certain DEI practices in universities and public institutions, and big-name corporates quietly shelving their commitments. For businesses operating in or with the US, this isn't an ideological debate—it's a compliance headache.

But the commercial impact is now going global.

Just last week, Transport for London made headlines by cutting ties with Accenture (see: Khan blocks US consultancy from TfL contracts over diversity clash, The Telegraph, 10 April), after the consultancy "sunset" key DE&I policies. Accenture was removed from bidding on a creative contract because it no longer met TfL's diversity criteria. In a punchy statement, TfL made clear: values matter. "We are proud to hold our suppliers to account," they said, "making sure they are aligned with our commitments on diversity and inclusivity."

It takes courage to follow through on your values, especially when it comes with public scrutiny or commercial cost. But TfL have shown what principled leadership looks like – and it's exactly the kind of example other organisations should be paying close attention to. This isn't just admirable. It's now necessary.

UK values, global accountability

Unlike the US, the UK pensions industry continues to move in the opposite direction – with more trustees, employers and administrators recognising the importance of inclusive practices, both internally and externally. The Pensions Regulator has made its expectations clear, and even in the face of economic challenges, responsible governance and inclusive policies remain high on trustee agendas.

But here's the rub: in an interconnected world, your supply chain is your reputation. Trustees, scheme sponsors and service providers alike need to be thinking hard about their partnerships and the alignment of values.

If your provider or supplier is headquartered in a jurisdiction that's backpedalling on DE&I, that could present a reputational risk. If you're publicly committed to ESG principles, inclusive service delivery, or equitable member communications, how confident are you that your partners are upholding the same standards?

What should trustees and schemes do now?

This isn't about knee-jerk reactions or virtue signalling. It's about smart, strategic governance.

• Start asking the awkward questions. When evaluating or reviewing a service partner, ask about their DE&I strategy. Not the brochure version—the real one. How is it implemented globally? How do they monitor and report on it?
• Audit your alignment. Do your third-party providers align with your scheme's own values? If not, how material is the gap? Could it become a regulatory or reputational issue?
• Watch the contracts. For large schemes or public sector-linked bodies, contract clauses on ESG and DEI delivery aren't just box-ticking—they're risk management tools. If your provider suddenly shifts their stance, what's your exit route?
• Look beyond compliance. The UK pensions world is moving (slowly) towards more member-centric, equitable delivery. This includes how services are communicated, accessed, and supported. A partner who can't keep pace because of internal policy reversals could limit your own progress.

Principles over PR

This is a moment for trustees and sponsors to get real. As the US re-evaluates its stance on DE&I, the UK must decide if it's going to lead, follow, or pretend not to notice.

We say: lead. Not just because it's the right thing to do, but because inclusive, member-focused delivery makes for better administration, better governance and better outcomes. And that's what pensions should be about.

But let's not stop there. For those of us in leadership—those with a voice, influence, and the privilege of making decisions – it's time to step up. If we truly believe in the importance and value of ED&I, then we need to show it. Not just in policies and statements, but in who we choose to work with, what we prioritise, and where we draw the line.

These may not be easy decisions. There will be pushback, awkward conversations, maybe even commercial pressure. But integrity has a price—and it's usually paid upfront. So let's not shy away from it.

Because if we don't stand by our values now, when it's hard, then they're not really values at all.

So, while DE&I might be under pressure elsewhere, let's make sure that on this side of the Atlantic, we don't just weather the storm – we hold the line. And maybe even pull a few others along with us.

Daniel Taylor is client director at Trafalgar House