That is one conclusion of the saga that unfolded at Harvard involving activist investor Bill Ackman and then-Harvard president Claudine Gay. Many are citing it as one example of how anti-DEI crusaders have gotten the upper hand in corporate, political, and academic circles. DEI offices and professionals are increasingly paying the price—but they shouldn’t let it happen.

We were among those who called the death of ESG last year, pointing out that the acronym had become toxic and that it was better to focus on its individual components rather than its politically loaded shorthand. That view is now mainstream, exhibited by an essay in the Wall Street Journal this week calling ESG a “dirty word.” It suggested executives use alternatives like “responsible business.”

But at least the ESG backlash was more about semantics than substance.

The situation is very different for diversity, equity, and inclusion (DEI). When Gay resigned as Harvard’s president in what started as a dispute over handling anti-Semitism on campus and included plagiarism charges, DEI was the collateral damage.

Ackman, the activist investor who had led the charge against Gay, posted an essay on X decrying “DEI’s ideology” as racist and anti-capitalist, and naming a misguided focus on DEI as the principal cause for Gay’s appointment, whom he called “not qualified.”

Ackman’s message reverberated far beyond the world of academics. Elon Musk, for example, the world’s most powerful businessman, retweeted the post, commenting that “DEI is just another word for racism. Shame on anyone who uses it.” And at the World Economic Forum in Davos, taking place next week, the term “DEI” doesn’t appear in a single session (there is one session on diversity, though).

But while Ackman’s attack on DEI catapulted the discussion to the mainstream, it was another (former) businessman who started this round of salvos: Republican presidential hopeful Vivek Ramaswamy. Ever since he published his book Woke, Inc. in 2021, Ramaswamy has been on a crusade against DEI, with Fox, the New York Post, and the Wall Street Journal giving him a platform for his criticisms.

For Ramaswamy, DEI is racism because it positively discriminates against minority candidates. He is a proponent of a simplified version of meritocracy where only professional credentials are considered, and not any traits like gender, sexual orientation, race, or ethnicity.

Whatever happens to his presidential campaign after the Iowa caucuses, one thing is already clear: Ramaswamy’s anti-DEI campaign in corporate America has been a major success. CNN and Axios were among the media reporting last week on the ongoing corporate backlash against DEI. They’re not wrong: DEI job postings dropped 23% year over year, Indeed reported in November.

Don’t count us among the fans of this trend. Systemic racism, gender inequality, and other forms of discrimination have deep and complex roots, which make them persist even when they are no longer legally allowed. (Though gender inequality, for one, is still ingrained in the U.S. law in more than one way. How else to explain that there is still no national paid leave for mothers, for example?)

For this reason alone, any company would do well to set up an office to figure out its approach to diversity, equity, and inclusion. Companies should contribute to society. Ensuring that they don’t perpetuate a system that for centuries has held back women and people of color is one good way of delivering on that mandate. To reflect and act on this role, DEI is the perfect acronym.

Of course, the answer to past racism is not reverse racism. The answer to past gender-based discrimination, for example, is not to promote women simply because they are women. But that was never the point of DEI to begin with. It was quite simply to do with its acronym says: to promote diversity, equity, and inclusion. We still support that. DEI may be dead. But its supporters should resuscitate it. Long live DEI.

More news below.

Peter Vanham
Executive Editor, Fortune
peter.vanham@fortune.com

This edition of Impact Report was edited by Holly Ojalvo.

ON OUR RADAR

The latest dirty word in corporate America: ESG (The Wall Street Journal)

"Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance [ESG] efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives," Chip Cutter and Emily Glazer wrote in the Wall Street Journal.  

The shift away from the acronym is widespread, they write: Some companies, like Coca-Cola, are rebranding job titles and departments to avoid it. Consultants are advising companies to use different terms to describe their ESG efforts. And ESG investing is in decline, forcing some Wall Street firms to stop offering ESG products or close entirely.

Our take: Impact Report readers have known that ESG is dead for some time now. But in this late obituary, the WSJ acknowledged the other part of the equation that we pointed to: that "many CEOs stress that they continue to follow sustainability commitments made years ago—even if they are no longer talking about them as often publicly."

AI-related concerns beat ESG risks in executives' short-term outlook (World Economic Forum) 

Short-term ESG-related risks such as "extreme weather events" and "societal polarization" worry executives ahead of the World Economic Forum in Davos, the organization reported on Wednesday as part of its 2024 Global Risks Report (disclosure: I previously worked for WEF). But the threats posed by "misinformation and disinformation" beat out both ESG concerns, in a year marked by major elections around the world and the take-off of generative AI. 

Our take: The WEF survey is another sign that AI is rising as a topic of concern in management circles. But it would be a mistake to put AI in the "cyber" or "IT" box. Managers in charge of ESG or social impact should get involved in the way companies deal with AI from the get-go, as its impact often is social in nature.