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Laurie Ollivent - Simon Kerr-Davis - Kloe Halls The Diversity Faculty Blog

Diversity Legal Outlook 2024

2023 saw an increased focus on data gathering, pay reporting, and the setting of diversity demographic targets. In the EU, the Pay Transparency Directive marked a step closer in tackling equal pay issues whilst the UK’s financial regulators proposed far-reaching reforms to boost D&I across the sector. However, legal action on the other side of the pond was a cautionary reminder to employers of the need to navigate their DEI journey carefully.

So what is in store for 2024?

This year, we expect to see many organisations press ahead with their DEI agendas in response to an increased regulatory focus (at least in the UK), government initiatives, increased activist pressure and standards set by non-government organisations. Whilst gender has traditionally been at the forefront of companies’ diversity strategies, a focus on historically less commonly reported strands, including ethnicity, disability and social mobility, is gaining momentum.

In contrast, we may see some organisations stall or revisit their DEI initiatives in response to political pressure and legal challenge in certain jurisdictions. The US Supreme Court’s decision in Students for Fair Admissions highlighted the challenges of implementing lawful affirmative action measures. Its impact has been felt globally as international employers grapple with developing DEI strategies which are not only meaningful, but also compliant with local laws and evolving societal expectations.

Notwithstanding the challenging legal patchwork, through its various reporting requirements, the Corporate Sustainability Reporting Directive gives employers a clear signal to continue experimenting with positive action measures. Along with various other Directives, including the Women on Boards Directive and the EU Pay Transparency Directive, companies operating in the EU should prepare for increased regulatory oversight of their D&I strategies in 2024.

We are also seeing many global employers leverage opportunities presented by AI for enhancing DEI across the employment lifecycle. However, if not managed carefully, AI can have a chilling effect on diversity efforts. The courts are already starting to see cases challenging the use of AI on the grounds that it has allegedly discriminated against certain employees and we expect this to continue.

In our Diversity Legal Outlook, we draw upon some of the key themes across diversity, equity and inclusion impacting global employers in the years ahead, including: