Corporate Shift in Response to Political Changes
Following the presidential election, many American corporations have started adapting their policies, particularly concerning environmental and social governance, due to the anticipated business climate under the new administration.
BlackRock and the Net Zero Asset Managers' Initiative
- BlackRock's Exit: The world’s largest asset management company, BlackRock, withdrew from the Net Zero Asset Managers’ Initiative, which aimed for net zero greenhouse gas emissions by 2050. This move was reportedly influenced by political pressure.
- Implications: BlackRock's decision has led to uncertainty within the initiative, prompting a review of its activities and the suspension of certain commitments and reporting practices.
Political Influence on Environmental and Social Policies
- Precedent: Other financial institutions like J P Morgan Asset Management have also moved away from green initiatives.
- Trump Administration: Recently, the administration withdrew from the Just Energy Transition Partnership, indicating a broader retreat from international climate agreements.
Diversity, Equity, and Inclusion (DEI) Mandates
- Corporate Reactions: Many corporations, including John Deere, Jack Daniels, and Ford, have started scaling back DEI initiatives, aligning with executive orders and Supreme Court rulings.
- Legal and Economic Factors: While a federal judge blocked DEI executive orders, the economic ties with the government influence corporate decisions as many companies have significant government contracts.
Wider Corporate Adaptation
- Non-government Tied Companies: Companies like Disney and Coca-Cola are also reducing DEI efforts, fearing federal investigations and leveraging executive orders as an exit strategy.
- Stalling of DEI Progress: Despite some progress in diversity, the share of women and racial diversity on corporate boards remains limited, suggesting a plateau.
Impact on Affirmative Action
The shift away from DEI in the US might influence global models of affirmative action. The recent changes allow perceptions of "merit" to potentially overshadow efforts to address social discrimination, posing a challenge to inspirational models of social equity.