McDonald's retires some diversity goals in latest corporate retreat

McDonald's is revamping its approach to diversity, equity and inclusion, becoming the latest large company to change its strategy as the once-ubiquitous goals come under pressure from conservative advocates.

The company will no longer set "aspirational representation goals" and will instead continue to "embed inclusion practices" into its day-to-day business, the burger chain said in a post on its website. It will also retire a DEI pledge in its supply chain "in favor of a more integrated discussion with suppliers about inclusion as it relates to business performance."

Additionally, the company's diversity team will now be called the Global Inclusion Team. McDonald's said its "commitment to inclusion is steadfast." 

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McDonald's shares dropped 0.9% on Monday. The stock fell 2.2% last year. 

Companies across the U.S. have increasingly retreated from the DEI targets they implemented after the murder of George Floyd in 2020. Following the Supreme Court's ban on affirmative action in college admissions, legal challenges to corporate diversity programs that favor minority groups have also made executives review such initiatives. President-elect Donald Trump, a vocal critic of DEI policies, has promised to root out the practices from the federal government.

Anti-DEI crusader Robby Starbuck said he contacted McDonald's Friday to ask about its diversity programs but didn't get a response. On Monday, he claimed victory in a post on X. 

The company said that the changes had been under consideration over recent months and were the result of a variety of factors, including the Supreme Court decision and the "evolving landscape around DEI" in the U.S.

Read more:  DEI isn't going anywhere — but it may get a rebrand

Shifting landscape

The changes at McDonald's are similar to modifications made at other companies pressured by Starbuck, including changes at Walmart and most recently at Nissan. In all, he has claimed victories at more than 15 companies, includingToyota, Ford and Harley-Davidson.

The Chicago-based company will continue to report demographic information regarding its board, employees and suppliers in its annual impact report. It said it focuses on internal efforts to support building a diverse employee, applicant and supplier pipeline, and a commitment to pay equity. 

McDonald's added it engages with employee and franchisee groups. For workers, that includes networks for working parents, LGBTQ+ people and women.

The company's latest impact report said 33% of its corporate staff in the U.S. at the senior director level or above came from underrepresented groups. Meanwhile, about a third of franchisees were Asian, Black or Hispanic.

McDonald's removed the term "ESG" from parts of its website in 2023, when environmental, social and governance initiatives were attracting more criticism from conservative policymakers.

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In 2022, the company's investors voted in favor of a proposal calling for an independent audit of its civil-rights policies. Last year, McDonald's released the results of the study, conducted by WilmerHale, which said that, among other findings, the company had "made admirable progress toward its representation goals for gender and underrepresented groups." 

Efforts to promote diversity in its company-operated restaurants, which make up about 5% of the total, "are less developed than its efforts to support its corporate workforce" and McDonald's is working to develop its policy there, according to the report.

In 2021, McDonald's pledged to boost diversity among its franchisees as well as increase spending with suppliers owned by women and minorities. The same year, the company settled a lawsuit that accused of discrimination by Black franchisees in Tennessee.