A new path to inclusion: How to overcome legal and cultural constraints on building fair workplaces

Over the past decade, the work of diversity, equity, and inclusion (now variously described as belonging, opportunity, culture, engagement, or otherwise) has experienced a wide pendulum swing. In the late 2010s and early 2020s, many organizations established or expanded inclusion efforts by hiring dedicated diversity professionals, creating initiatives to combat inequality in their workplaces, and making public commitments to advance fairness and justice.

In recent years, however, a series of headwinds — including lawsuits challenging the legality of diversity programs under civil rights law, and the actions of the current federal administration — have created pervasive anxiety and confusion.

In 2025, Catalyst and the Meltzer Center for Diversity, Inclusion, and Belonging partnered to explore corporate leaders’ concerns and recommend actions in Risks of Retreat: The Enduring Inclusive Imperative. Now, we have teamed up for the second year to learn how organizations have responded to the current environment and share the solutions that HR, legal, and business leaders need to confidently maximize fairness and inclusion at their organizations today. Based on a new study of more than 2,000 respondents across the United States, we find that most organizations remain committed to inclusion, but are facing legal and cultural constraints that make it hard for them to live up to that commitment. We offer practical guidance on how to overcome these constraints through the framework of “earned universalism.”

Key Findings

• Commitment to inclusion persists: Despite the headwinds, most employees (80%) — at all types of companies — remain confident that their organizations are committed to inclusion, diversity, and fairness.
• Employees value inclusion: Most employees want to support (69%) and work at (74%) organizations that uphold a commitment to inclusion.
• Organizations have adapted their “DEI” strategies: Most US organizations (77%) have made changes to what they do and say about their DEI approaches over the last three years:
  • Most organizations that are not federal contractors (52%) ramped up efforts, while most federal contractors (51%) pulled back.
  • The majority of both types of organizations (55%) signaled a public retreat, even if they didn’t retreat in substance.
• Increasing inclusion efforts pays off: Employees of organizations that are not federal contractors saw stronger financial outcomes, greater efficiency, and greater diversity and inclusion outcomes when their organization enhanced inclusion efforts over the past three years.
• Federal contractors face unique legal and regulatory threats: Employees of federal contractors saw positive business impacts from their organization’s current inclusion efforts, even if their organization had to decrease its efforts under pressure from the legal and regulatory environment.
• What’s the path forward? Regardless of what their company is currently doing, respondents want future inclusion efforts to deliver universal benefits while also prioritizing concrete outcomes for marginalized groups.
• Strategic action plan: Our solution playbook, built around the concept of “earned universalism,” shows leaders how to advance universal goals, support marginalized groups, and communicate strategically to satisfy legal, societal, and employee expectations.