What: As DEI faces increased scrutiny in 2025, companies must evolve their inclusion strategies to address four key risk areas - legal, reputational, workforce, and loyalty - while maintaining business effectiveness.

Why it is important: With research showing inclusive workplaces achieve 50% reduction in turnover risk and 56% increase in performance, organisations must evolve their approach to maintain competitive advantage in an increasingly complex business environment.

The landscape of inclusion work is undergoing a fundamental transformation in 2025, requiring organisations to shift from public-facing campaigns to embedded business strategies. While "DEI" has become a loaded term, the work itself remains essential for business success. Leading organisations are adopting new frameworks like "The Sieve Model" to evaluate initiatives, the "Three C's" focusing on community, competitive advantage, and collectivism, and the "Four Pillars" addressing talent, business outcomes, culture, and conscience. The emphasis has shifted to strategic implementation across all business functions, from R&D to marketing and leadership pipelines. Employee Resource Groups (ERGs) are being reimagined as strategic assets and advisory engines, while leadership accountability is strengthened through concrete metrics and compensation ties. This evolution isn't about defending past approaches but designing for tomorrow's workplace needs.

IADS Notes: Recent market evidence validates this strategic transformation. In November 2024, Walmart pioneered a successful approach by maintaining inclusion practices while modifying terminology, achieving strong market performance. By January 2025, the emergence of the FAIR framework (Fairness, Access, Inclusion, and Representation) offered organisations a structured approach to balancing inclusion with business performance. The impact is significant: March data shows companies implementing systematic inclusion strategies achieve 21% higher returns, while those maintaining traditional programs face challenges, as evidenced by Target's $10 billion valuation loss in February. Success stories like Neiman Marcus's "Magic Makers" program, which achieved a 34-point increase in engagement, demonstrate how strategic implementation can drive both social and business outcomes.

7 ways top companies are rethinking inclusion in 2025