The Scoop: How multinational companies need to address global DEI dilemma

Multinational companies face a challenge in adjusting their diversity, equity and inclusion policies to align with the different political and regulatory environments in the United States and Europe.

The Wall Street Journal reported that businesses such as Aldi, McDonald’s and Institutional Shareholder Services scaled back or modified their DEI commitments in the U.S. to avoid running into issues with the Trump administration, which threatened to investigate corporate practitioners.

But they’ve done so while being cautious overseas, especially in Europe where several countries are working to introduce more DEI requirements.

Aldi, for example, scrubbed references to DEI from its U.S. website but still displays support for a diverse and inclusive workplace in parts of Europe, according to the Journal. Santander, on the other hand, announced last month that it’d no longer tie executive bonuses to efforts promoting women into management roles in countries where government policies don’t support specific inclusivity targets

“European companies choosing to pause or roll back DEI initiatives could face significant regulatory risk and reputational backlash in Europe,” Jeanne Martin of ShareAction, a responsible-investment nonprofit, told the Journal.

For U.S.-based McDonald’s, the company outlined plans to eliminate diversity targets stateside while standing by a commitment to ensure that 40% of all senior leadership roles in Britain are held by people from underrepresented groups by 2030.

Why it matters: Taking an “we believe in this here, but not there” approach has the potential to create a nightmare for both internal and external audiences.

Consistency is the foundation of any messaging effort, but in this situation, it’s especially difficult to maintain.

Companies must explain to employees why policies differ based on location while also assuring socially minded investors of their true corporate values.

“It’s like an avalanche,” Christoph Seibt, a partner at Freshfields, told the Journal while describing the flood of companies seeking guidance.

The first and most crucial step is proactively addressing changes with both internal and external stakeholders. If the reasons behind the shifts aren’t clear, anger and backlash may follow. Companies must not only explain what’s changing but also prepare to discuss the values driving their decisions.

U.S. businesses launching new DEI efforts abroad should also consider how those initiatives will be perceived by investors, employees and even policymakers in Washington. Inversely, foreign stakeholders might have feelings about what’s happening on this side of the Atlantic.

Today, no message stays confined to one region. Whether shared internally or externally, in the U.S. or Europe, companies must assume that every stakeholder will see and interpret their communications.

For communicators on both sides of the pond, make sure to have tailored, transparent messages for both internal and external audiences, offering clear explanations for DEI policy shifts by region, and equipping managers with FAQs and talking points to handle employee concerns and prevent misunderstandings.

People will have questions so it’s your job to have those answers ready for them.

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Casey Weldon is a reporter for PR Daily. Follow him on LinkedIn.