Donald Trump attacked social sustainability in an executive move to dismantle diversity, equity, and inclusion (DEI) with the same potential destruction of programs as his attacks on climate and environmental sustainability. As this unfolds in America, many Australian companies wonder what it means for companies and programs here.
Most impacted by this are Australian arms of companies based in the US.
Trump’s order “Ending Radical And Wasteful Government DEI Programs And Preferencing” came into effect on 20 January.
Accenture almost immediately rolled back DEI efforts to provide services to the US federal government. But what was to become of its DEI policies in Australia?
Interestingly, rival Australian operated companies, including Deloitte, PwC, EY, and KPMG, reaffirmed their diversity target commitments. All four companies are structured as networks of independent firms and can individually set their policies, unlike their Accenture counterparts. This created a divide in Australian operated companies within the same business sphere.
According to The Financial Review, industry recruiters said the divide in DEI policies could impact hiring and business productivity relating to internal and external relations. On one hand, the commitment to diversity targets at the four companies could attract diverse talent. On the other hand, the dismantling of DEI at Accenture may be appealing to those who feel DEI policies negatively influenced their career progression.
Some recruiters told the newspaper that they do not believe the DEI policy differences would be the sole reason for candidates to choose one company over the other and may have no impact on hiring.
Despite Trump’s order to drop DEI initiatives to maintain US government contracts, InvestorDaily reported that companies were reminded by Minister for Finance Katy Gallagher that businesses must adhere to Australian laws and standards. The Department of Finance’s Commonwealth Supplier Code of Conduct, mandates suppliers to demonstrate they have appropriate policies or frameworks in place regarding ethics. If companies or suppliers do not adhere, remedial action or termination may result.
However, Accenture is not directly breaking the law, but rather is turning against Australian values, Gallagher told InvestorDaily. The question remains whether Australian companies and business leaders will follow suit with the US’s DEI purging or will continue to work towards DEI targets and initiatives.
HESTA, an Australian industry superannuation fund for workers in health and community service sectors, is another company that will maintain its current initiative towards DEI. Chief executive Debby Blakey told the Sydney Morning Herald that she is optimistic Australia will not roll back diversity targets. The fund expanded its policy to require companies to set targets for gender parity across the entire organisation, and around 80 per cent of the members are women.
Blakey said business is more effective and has higher performance when it is more diverse. In favour of gender diversity, a McKinsey & Company report found that top-quartile companies on executive-level gender diversity worldwide had a 21 per cent likelihood of outperforming its industry peers.
So, even though Accenture rolled back its DEI policies to cooperate with the Trump administration initiatives, other Australian companies, including Accenture rivals, maintain a commitment to DEI initiatives and policies.