COMMENTARY: Trump's DEI ban can't stop global diversity efforts

President Trump is rolling back diversity, equity and inclusion programs across the U.S. government and is pressuring contractors to do the same.

But that does not mean all of GovCon will pull back their own DEI programs.

One subset of contractors will not be able to fully do so because their parent organizations are headquartered outside of the U.S.

Publicly-traded companies must comply with DEI regulations in order to be listed on stock exchanges in Europe, the U.K. and Canada.

“We’ll follow the law in the countries we operate,” one executive told me.

So even if there is less emphasis on DEI in the U.S. operations of these companies, changes by the corporate parents are unlikely.

Companies with headquarters in Europe and Canada have DEI requirements that fall under the umbrella of environment, social and governance rules.

ESG rules require a variety of reporting and disclosures on hiring and promotion practices, community involvement, and the promotion and use of green technologies.

Investment bankers and analysts in Europe ask a lot of questions about ESG. They also often make investment recommendations at least in part based on ESG.

“They’ve even asked why we are still in the defense business,” one executive said. “But that stopped when Russia invaded Ukraine.”

Some of the larger companies on the Washington Technology Top 100 have foreign parents. This group includes BAE Systems, (U.K.), CGI Group (Canada), Serco Inc. (U.K.), Leonardo DRS (Italy) and NTT Data (Japan).

Not on the Top 100 but growing in the U.S. market are companies such as Thales Group (France) and QinetiQ Group (U.K.)

Those companies will have to continue to meet DEI standards if they want their stock traded in their home companies.

Likewise, U.S. companies that do business in foreign locations will still have to follow the DEI regulations in the countries where they operate.

Many executives have told us they do not expect actual hiring and promotion practices to change for any government contractor because of the Trump DEI rules.

But one question no one seems to want to answer is whether U.S. companies will tout their DEI efforts as much as they do now.

We’ve gotten polite "No comments" from most companies we have reached out to.

A Leidos spokesman told us this: "We are in the process of assessing recent executive orders and taking steps to ensure our continued compliance. Our human resources policies and practices are designed and executed to recruit, hire, train and retain best-in-class talent on a non-discriminatory basis."

The spokesman added that Leidos does not set quotas or provide incentives based on demographics or affirmative action plans. 

Many GovCon companies still have DEI language on their websites amid the pressure to pull away from those efforts. They also include environmental sustainment goals around clean energy, another Trump target, on their websites and in annual reports to investors.

Several companies display awards they have received for diversity and inclusion programs. They also include DEI goals and the racial and gender breakdown of their employees in their annual reports.

To further pressure contractors, the Trump administration has tied compliance with its no-DEI executive order to contract payments. The connection to payments opens contractors up to the risk of whistleblower lawsuits under the False Claims Act, if they are accused of having received a government payment after certifying they do not practice DEI.

The executive order also requires agencies to identify up to nine companies to investigate for violating the no-DEI executive order.

To avoid calling attention to themselves, will companies begin to scrub their websites of references to DEI even if they don’t change their hiring practices? In essence, many will probably keep their heads down and hope no one at the White House notices.