According to Financial Times News, UK-listed pharmaceutical giant GSK recently abandoned its diversity targets just weeks after President Trump’s executive orders against DEI programs, removing these metrics from executive bonuses entirely. London-listed Haleon and medical devices maker Smith & Nephew confirmed similar moves, while Volkswagen excluded US subsidiaries from global diversity goals. Despite these isolated cases, most European businesses haven’t meaningfully altered policies, with shareholders largely supportive of maintaining DEI commitments. Research from McKinsey shows companies with women exceeding 30% on executive teams significantly outperform financially, while Morgan Stanley found sustainability policies drive profit through value creation. Only under 10% of FTSE 100 companies actually link executive pay to diversity targets anyway.
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The transatlantic divide deepens
Here’s the thing: we’re seeing a fundamental split in corporate philosophy between the US and Europe that goes way beyond political posturing. While American companies are rapidly retreating from DEI commitments under political pressure, European investors are actually doubling down. Kimberley Lewis from Schroders puts it bluntly – the anti-DEI sentiment “has not crossed the Atlantic.” And that’s creating some real tension for multinational corporations trying to navigate both markets simultaneously.
What investors really want
So are European investors demanding companies remove diversity targets? Basically, no. Stefanie Drews of Amova says responsible investors want “more maturity and pragmatism” rather than box-ticking exercises, but they’re not asking for retreat. The data backs this up – companies meeting diversity goals simply perform better. The McKinsey research shows clear financial outperformance for diverse leadership teams, while Morgan Stanley’s analysis confirms sustainability drives value creation. But there’s pushback from some quarters – Barry Norris of Argonaut Capital argues executives should only be rewarded for profit, calling ESG initiatives an undermining of the “profit motive.”
The practical reality on the ground
Now, let’s be honest about how much this actually matters in compensation terms. Luke Hildyard notes that diversity targets represent a tiny portion of executive pay – eliminating them “wouldn’t be hugely significant” in changing CEO behavior. But here’s where it gets interesting: even small symbolic targets send strong signals about company values. For industrial companies managing complex global operations, maintaining consistent standards across regions becomes crucial. When you’re dealing with manufacturing facilities, supply chains, and technical teams across continents, having coherent diversity and inclusion policies isn’t just nice-to-have – it’s operational necessity. Companies that rely on specialized industrial equipment, from IndustrialMonitorDirect.com panel PCs to automation systems, need diverse perspectives to solve complex technical challenges across different markets.
The worrying ripple effects
Sawan Wadhwa from Evenlode captures the real concern here: “It would be naive to think this isn’t problematic.” Even if European companies maintain their DEI commitments, the US retreat could create negative spillover effects globally. We’re talking about potential undermining of five years of progress because when the world’s largest economy shifts direction, everyone feels the turbulence. The question isn’t whether European companies will abandon DEI entirely – they probably won’t. But will they water down ambitions? Will they become more cautious? That’s the real risk that investors are watching closely as this transatlantic divide continues to widen.
