Conservative Backlash Raises Existential Issues for DEI Programs

There’s an old country fable that goes: When you sit down to bacon and eggs at breakfast, the chicken is involved, but the pig is committed.

Many dedicated customers of retail chain Tractor Supply Co. and Deere & Co., manufacturer of John Deere lawnmowers, have probably heard that old saw before. The two companies recently had chicken-or-pig moments of their own regarding their corporate sustainability programs. Both came out looking more like poultry than pork.

Tractor Supply went first. Last month, the retail chain announced it is cutting back on “nonbusiness activities,” which entails dropping its diversity, equity and inclusion program. That means initiatives such as sponsoring LGBTQ+ pride festivals and efforts to encourage voting will become relics of Tractor Supply’s past.

Deere followed suit this month. The Illinois-based company on July 16 announced it was undoing a series of internal DEI-directed policies. For example, the equipment manufacturer said it is “auditing all company-mandated training materials and policies to ensure the absence of socially motivated messages.” Additionally, Deere said it is dedicated to “reaffirming within the business that the existence of diversity quotas and pronoun identification have never been and are not company policy.”

Contrast those statements with the full-throated endorsements Tractor Supply and Deere offered for their DEI programs in proxy statements filed earlier this year. The about-faces followed a familiar pattern of companies backing down from DEI and environmental issues in the face of pressure campaigns orchestrated by right-wing activists and boosted by corporate titans such as Tesla founder Elon Musk and hedge-fund billionaire Bill Ackman. Tractor Supply landed in the crosshairs of conservative firebrand Robby Starbuck, who ran for office in the company’s home state of Tennessee in 2022. Its response prompted Starbuck to use his social-media platform to launch a similar boycott of John Deere next.

Such firestorms illustrate the battles over sustainability now playing out in boardrooms across the country as stakeholders with competing interests are pitted against each other. Importantly, it seems support for corporate DEI initiatives has waned in the four years since the death of George Floyd sparked civil unrest across the country. In fact, we’re arguably witnessing a backlash against the campaigns championed by progressive interest groups and activist investors.

So, do C-suites answer to their stockholders or their customers? If employees are in favor of DEI programs, is it worth risking the ire of activists?

Some companies appear intent on trying to keep everyone happy. For example, that might entail subtle adjustments to how they talk about sustainability, avoiding hot-button words and phrases tied to DEI.

However, while such stall tactics can buy companies’ time to sort out their preferred strategies, they’re likely delaying the inevitable when it comes to sustainability policies. Half measures risk alienating progressives wary of greenwashing, while stalwart conservatives haven’t shown much interest in accepting compromises on DEI. Moreover, as companies show they can be moved by campaigns originating from either side of the debate, activists will have even more incentive to turn up the pressure on their competitors.

In the end, there doesn’t seem to be much room for companies to be involved with sustainability. They’re either committed, or they’re not.