Get Ahead of a Potential Change in Congress: Cultural and Political Scrutiny Would Return

Written by Adam Goldberg, Co-Founder and Partner, and Emily Kingsland, Executive Vice President

Let’s review the last 12 or so years – a time of instability and insecurity for companies navigating what cultural and political positions to take and voice. The 2010s saw companies widely adopting DEI and ESG policies, with mostly broad support from internal and external stakeholders and with little material blowback. For a good while, it seemed the primary risk to organizations was going too far, being viewed as inauthentic and performative, and being accused of woke-washing.

For a good while, it seemed the primary risk to organizations was going too far, being viewed as inauthentic and performative, and being accused of woke-washing. 

Then came the backlash from certain conservative quarters that presaged the coming change. The 2022 beginning of Disney’s fight with Ron Desantis, quickly followed by the 2023 Bud Light and Target controversies, caused companies and institutions to drastically rethink their engagement on cultural and political issues. Many developed more rigorous internal guidelines on when and how to engage with such issues, if at all: if issues didn’t go to the core of an organization’s mission and business, speaking on them (at least publicly) became presumptively verboten. But, this wasn’t without cost, especially with many employees.

Notably, the controversies that began in 2022 mostly impacted public-facing positions and marketing; they generally didn’t affect corporate programs like DEI and ESG. That is, they didn’t until the 2024 presidential election got into swing, the political and consumer waters became rougher, and pressure mounted. During the 2024 summer, we saw John Deere, Harley Davidson, and Lowe’s all scale back their DEI efforts in a sign of what was to come. But, at the time, many companies held fast.

Then came the election, the Executive Orders, the government contract rules, the grant reviews, the Truth Social posts, and the law firm settlements. Confronting legal demands and survival threats, DEI and ESG programs were whittled down or away, with some notable exceptions. For example, according to Gravity Research, 40 companies made public DEI changes after the inauguration, and the term “DEI” fell 98 percent across Fortune 100 communications. And, so, the pendulum swung back, with stakeholders across the board recognizing that organizations had little choice but to retrench.

And, so, the pendulum swung back, with stakeholders across the board recognizing that organizations had little choice but to retrench.

One hallmark of President Trump’s reelection that often goes unnoted has been the diminished influence of social justice organizations and Democratic congressional caucuses to shape corporate behavior. For years, these groups exerted meaningful pressure on companies to adopt favored policies and practices. However, once Democrats lost power, the political and cultural dynamics that sustained that pressure began to erode. At the same time, organized consumer opposition on the right continued to grow, and companies favored business imperatives over broader environmental and social objectives.

And that is where we remain today. But, companies need to think about where they’ll be if Democrats take back the House in November. Wholly apart from oversight, renewed power would put renewed pressure on companies to better attend to Democratic priorities. And with Democrats back holding the gavels, their core constituencies (like social justice groups) will have renewed influence. This would impact the cultural conversation and pressures in a way that has been mostly dormant since November 2024.

But, companies need to think about where they’ll be if Democrats take back the House in November. Wholly apart from oversight, renewed power would put renewed pressure on companies to better attend to Democratic priorities.

True, it seems that views have shifted even on the left, and that the new debates will be different. And, it’s also true that the upcoming presidential election will temper Democratic outspokenness on DEI, ESG, and similar wedge corporate issues in an effort to win back moderates and disaffected Trump voters. But, it would be unwise to assume that Democrats in power wouldn’t push agendas they care deeply about or that a change in control would be interpreted solely as a commentary on the state of the economy. Indeed, pressure has already begun and a lot of companies are currently being put to the question of whether they’ll speak out on voting rights.

Consequently, it’s now time for companies to assess what policies and practices might again come under policymaker and other stakeholder scrutiny and do the work to prepare. For example, companies should start:

• Identifying the different scenarios for potential scrutiny. How likely is your company to face pressure and from whom? Would it come from policymakers, employees, third-party groups, activist investors, consumers, influencers? What form would the pressure take?
• Determining how the company should respond to each scenario. Would the company revisit its current policies and practices or stand firm? What are the legal, business, and reputational risks of doing so?
• Preparing the messaging for each scenario and tailoring that messaging for your different stakeholders. Will you be ready to communicate with employees? With customers? With investors?
• Identifying Potential Supporters. Are there constituencies, such as employees, trade associations, or business partners, that would support your positions publicly?

One big question is whether there are strategies and tactics to execute before November to prevent or minimize pressure later on. Should you be proactive? Would it help to reach out to employee resource groups or third-party groups? Would it help to begin addressing the potential issues now through thought leadership?

If mid-term election predictions are accurate, a sea change is coming beyond congressional oversight and legislative agendas. It’s also coming for the national conversation around corporate policies and practices. And the din of that conversation will only grow louder as the presidential election lurches nearer. Take stock and get ready.