July 22, 2024

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Is Fashion Done With Diversity Departments?

6 min read

In 2019, Liela Touré, a public relations lead at a high-end e-commerce retailer, approached the company’s leadership about creating an employee resource group for racial-minority staffers.

Her first point of contact – the company’s global social responsibility manager — told Touré he had already made the suggestion to senior executives several times to no avail.

“It just wasn’t a priority,’” she said. “Then, cut to 2020.”

As the now-familiar tale goes, after George Floyd’s death, the global protests and feedback from Black employees, Touré’s company greenlit the employee groups and created a diversity, equity and inclusion committee. Touré, who is Black and Asian, was appointed as one of its chairs.

But by the time she left the company about a year later, the committee, which was mostly made up of volunteers from the human resources department, hadn’t done much beyond arranging a few meetings and posting job openings for DEI specialists.

“It was altruistic intentions, but there wasn’t actually a figured-out formula as to how it would operate,” she said.

Touré’s experience is typical in the fashion industry, where many companies can show halting progress at best towards the ambitious goals they set in 2020 for everything from diversifying the executive ranks to increased representation in marketing to improving morale among minority employees.

Increasingly, the departments and staff tasked with meeting DEI goals are themselves the target. Some minority employees doubt their effectiveness, while executives question the link between investing in diversity and the bottom line. Meanwhile, conservative activists are looking to abolish DEI programmes via the courts.

Several companies have quietly wound down or renamed their DEI departments; where the role still exists, diversity chiefs are featured less prominently on corporate websites. Kohl’s and GameStop are among the firms that have removed DEI language from annual reports, The Wall Street Journal reported in April. In June, Tractor Supply Co. told customers it was shutting down all of its DEI efforts.

Few fashion companies are likely to follow the lead of Tractor Supply Co., which has an overwhelmingly rural, conservative customer base. But the industry’s approach to DEI is at a crossroads.

“We are in the repercussions part of the journey,” said Amber Cabral, a DEI strategist who runs her own consultancy. “We’re in the part where you have to decide how you want to show up, and [there’s] a lot more uncomfortable, difficult things happening.”

Best-in-class DEI programmes are evolving quickly, tweaking the language they use to stay off the radar of conservative activists. They’re also moving beyond the box-checking approach that centred on numerical diversity targets, instead putting an emphasis on areas like management training, communication and hiring practices. Experts in the field say, in addition to helping minority employees, these efforts are more likely to live on even if DEI departments themselves disappear.

Diversity specialists are also making the case that they should be considered part of companies’ commercial efforts, rather than an offshoot of charitable giving or human resources. Many diversity specialists make the business case – such as linking diversity to innovative products and building authentic connections to consumers.

“The biggest reason companies invest in diversity, equity and inclusion is because it makes business sense — because it drives, first and foremost, a competitive advantage,” said Aniela Unguresan, founder of the Edge Certified Foundation, a Switzerland-based organisation offering DEI certifications. “There is no other industry more than fashion … where that is more needed in order to tap into a diverse and ever-changing customer base.”

Nice to Have

From the beginning, many DEI departments weren’t set up for success. Assembled rapidly in the summer of 2020, they were frequently comprised of BIPOC employees who volunteered or were “voluntold.”

They were given lofty goals: increase representation of racial minorities, women and LGBTQ employees; foster belonging through events and internal groups. Some companies also created scholarships, made donations and formed partnerships with historically Black universities.

Some fashion and beauty retailers logged tangible wins on those fronts. In its 2023 impact report, Sephora said it increased its appointment of Black leaders by 7 percent since 2020, and 90 percent of the college students in its internship programme are people of colour. The North Face and Vans parent VF Corp. reported that 19 percent of its leadership was BIPOC and 42 percent women as of 2023, and that its staffers participate in 23 employee resource group chapters globally. Macy’s, one of the few fashion companies with a DEI department before 2020, said 29 percent of its board members were non-White and that its diverse employees can choose from 18 ERGs.

All told, however, a fair chunk of DEI mandates were often paid for through funds already earmarked for social impact and charity. This signalled that, from the start, DEI was seen by senior management as a nice to have rather than a key driver of growth or profits, and an easy cut when times get tough.

“I haven’t seen any examples — or very, very few — within the global fashion industry where diversity and inclusion teams have been proficiently resourced with the right infrastructure,” said Jamie Gill, non-executive director of the British Fashion Council and founder of The Outsiders Perspective, a nonprofit incubator programme for people of colour.

“But there was this expectation that those under-resourced and small diversity teams were going to … show an ROI,” he added.

He said this mentality explains why companies unwound DEI efforts so rapidly in the wake of the US Supreme Court’s striking down affirmative action programmes last year, even though the ruling only affected college admissions. US courts have yet to issue a broad crackdown on corporate DEI, and only a handful of organisations have been targeted by private suits, Gill pointed out.

“It’s an easy ‘get out of jail free card’ to use to [end DEI programmes],” he said. “They are small legal cases that have hit the mainstream but this is not a massive movement.”

What’s Next?

The next phase of DEI should move beyond creating awareness and towards more business-centric outcomes, such as resonating with increasingly diverse customers, improving product innovation, and driving hiring and retention, Unguresan said.

Businesses must lay out a “clear rationale as to why we are pursuing [DEI]” and strive for tangible “results and impacts,” she said.

The way companies talk about DEI is also changing to fit the new, more hostile environment. But fear of legal challenges shouldn’t drive the conversation internally, Gill said; he cautions there’s a slippery slope from avoiding phrasing that might irk conservative activists, and adopting the mentality that “we don’t need to talk about [diversity] because it’s happening naturally.”

Ultimately, DEI experts see several paths for the movement.

There’s the trajectory of MeToo, where initial enthusiasm and rapid movement to address sexual harassment and gender discrimination gave way to a more gradual cycle of progress and setbacks.

A best-case scenario could see DEI executives go the way of chief digital officers, the role many companies created in the mid-2000s to navigate the rise of e-commerce. Eventually, the values and skills they advocated for became part of the corporate fabric, and many companies decided they no longer needed a specialised department.

Fashion is nowhere near the point where consideration of equity and inclusion will naturally occur within organisations without targeted policies and oversight, Unguresan said.

“We’re learning and it’s uncomfortable and it doesn’t feel like it’s working and maybe we don’t like it,” Cabral said. “But, if you continue, you will get to a place where it starts to get better. This is just the difficult part.”

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