Why brands may lose billions of dollars by dropping DEI programs

In response to auto and other companies ending support for DEI, the Human Rights Campaign (HRC) Foundation released a new analysis proving the business case against alienating consumers who are LGBTQ and people of color. The debate should now be settled. The findings unequivocally show that brands will lose billions if LGBTQ regressions persist. Fortunately, it's not too late to revert. What’s at stake Since early October—LGBTQ History Month, no less—brands including Toyota, Ford, Molson Coors, Lowe’s and Harley-Davidson have retreated from DEI commitments. The shift comes at a time when inclusivity is not just a social issue but a business imperative. The extremist pressure behind these decisions has led to a critical moment where the bottom line and consumer loyalty are both at stake. Toyota, a long-time supporter of LGBTQ inclusion initiatives, announced plans to scale back support for LGBTQ programs and drop out of the HRC’s Corporate Equality Index. This move coincides with broader corporate trends, signaling a troubling rollback of DEI efforts in multiple sectors. A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here The HRC’s recently-issued report, “Automotive Data Show Massive LGBTQ+, People of Color Consumer Power; Red Flag for Automakers Backtracking on Inclusion Commitments,” cites data and analysis from McKinsey, a Washington Post poll and research conducted by the HRC’s foundation. The numbers indicate that the brands that have scaled down DEI are likely to lose billions of dollars in sales. Auto companies that have stripped down support for DEI and LGBTQ causes have made moral and business mistakes. Since 2020, LGBTQ consumers in America have spent approximately $103 billion on vehicles. Of the new vehicles registered in this time, more than a third of them were purchased by LGBTQ, Black, Asian or Latino buyers. This is more than 19.3 million vehicles. Eighty percent of LGBTQ consumers would boycott companies that roll back DEI initiatives, and more than half would amplify their concerns on social media. What does this mean? Brands can lose billions in sales. While car companies are in the spotlight, the risk isn’t limited to the automotive industry. Companies across sectors, including consumer goods, finance and technology, face similar risks. A message to Fortune 1000 CEOs The takeaway: DEI is essential for maintaining consumer trust and tapping into an economically powerful and diverse demographic. Rep. Robert Garcia, a California Democrat, emphasized this point in a letter to Fortune 1000 CEOs: “Supporting programs that foster inclusivity in the workplace is good for business and benefits employees, customers, and the bottom line.” The letter, cosigned by 48 Democratic House colleagues, said that corporations scrapping DEI support jeopardize talent retention and can prompt consumers to seek similar products from alternative companies. Furthermore, these companies' mass rollback of DEI efforts is having a ripple effect on grant programs for minority entrepreneurs, reducing the funding that supports underrepresented business owners and making it harder for minority-owned businesses to thrive. Here are three steps brands can take to do the right thing: Recommit to long-term DEI Any retreat from DEI erodes consumer loyalty. For companies that made a mistake and succumbed to the extremist efforts to dismantle programs and policies that foster inclusive workplaces, now is the time to change course. Apologize and recommit. This time, DEI must be more than a buzzword—it needs to be woven into the core of the company’s identity. Consistency builds trust. This time don’t repeat the mistake. Ad Age Tech Power List 2025 We’re looking for top digital innovators from agencies, brands, platforms, ad tech companies and tech startups Enter here Leverage authentic engagement Brands must authentically connect with marginalized communities and invest in year-round initiatives rather than relying on token gestures during specific months. For example, investing in talent development while prioritizing inclusive principles is a key way to retain and advance high-performing employees who are LGBTQ or employees who come from historically marginalized communities. Alignment is key Effective DEI programs work when there is internal alignment across marketing, PR, internal communications, human resources and leadership. Synchronizing efforts across these areas ensures consistency and authenticity. It also allows companies to organically amplify the diverse voices of employees and consumers. The HRC Foundation’s new data is a canary in the coal mine for big-name brands considering backpedaling on DEI. Despite Donald Trump winning the popular vote with an anti-DEI platform, the data overwhelmingly shows that dismantling DEI is a losing strategy for brands committed to consumer loyalty and market growth. A win-win is very achievable. The lesson is simple: Alienating LGBTQ+ consumers and people of color is a losing strategy, not just morally but financially. It’s not too late for companies to course-correct, but the window is closing. Brands must act now to be on the right side of history. DEI programs work when they include everyone. When done right, they drive cultural and financial success and reinforce the importance of understanding and valuing diverse customer bases and their significant buying power. NextGen Marketing Summit Join us for a crash course on Gen Z, DTC marketing and the creator economy Register today

Why brands may lose billions of dollars by dropping DEI programs

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