Retreat from Corporate Diversity Initiatives Continues as Citigroup and PepsiCo Roll Back DEI Policies

New York, February 2023 - The recent reversals in corporate diversity, equity, and inclusion (DEI) programs gained momentum this week as Citigroup (C) and PepsiCo (PEP) announced scaling back their DEI initiatives.

Citigroup Adjusts DEI Focus

Citigroup CEO Jane Fraser outlined changes in an internal memo, stating that the bank would no longer mandate the selection of new hires from a diverse pool of applicants. Additionally, the existing "diversity, equity and inclusion and talent management" team will now be known as "talent management and engagement."

Fraser emphasized the evolving regulatory landscape and the need to adapt: "It is important to note that we’re living in an environment where things are changing quickly."

PepsiCo Ends Dedicated DEI Role

PepsiCo's CEO, Ramon Laguarta, announced in a memo the elimination of a dedicated DEI officer and the sunsetting of DEI workforce representation goals. However, the company stated it would expand its supplier base and unveil a new "inclusion for growth" strategy.

"As we have always done, we will continue to hire and promote the best talent, ensuring we reflect the skills and perspectives needed to succeed in a competitive market," Laguarta said.

Anti-DEI Advocacy Influences Decision

Anti-DEI activist Robby Starbuck claimed that PepsiCo's decision came after pressure from an impending publication highlighting the company's "woke" policies.

Supreme Court Ruling and Executive Order Impact

The changes at Citigroup and PepsiCo align with a trend of corporate retreats from DEI efforts following the 2023 Supreme Court ruling in Students for Fair Admissions v. President and Fellows of Harvard College and an executive order from President Donald Trump.

Goldman Sachs and JPMorgan Chase Adapt

Other financial institutions have also adjusted their DEI approaches. Goldman Sachs (GS) eliminated a requirement for IPO clients to include women and minorities on their boards. JPMorgan Chase (JPM) omitted references to DEI in its recent annual report and decreased the use of the phrase by four instances compared to the previous year.

CEO Jamie Dimon cited legal changes and a desire to reduce bureaucracy as factors influencing alterations to JPMorgan Chase's DEI programs, including the elimination of quotas and a critical view of bias training and certain DEI expenses.