KPMG US Rolls Back DEI Initiatives Amid Shifting Legal Landscape

KPMG US has become the latest Big Four professional services firm to scale back its diversity, equity, and inclusion (DEI) initiatives, discontinuing a strategy aimed at recruiting and retaining talent from underrepresented backgrounds. The decision, outlined in an internal memo by Paul Knopp, the firm’s chair and CEO, reflects the broader trend of companies recalibrating their DEI efforts in response to legal and political changes under the Trump administration. Despite ending its “Accelerate 2025” program, Knopp emphasized that the firm remains committed to fairness and inclusivity, though the shift has raised questions about the future of DEI in corporate America.

Shift in Legal Landscape Drives DEI Rollbacks

The rollback of DEI initiatives at KPMG US and other major companies is closely tied to changes in federal policies and legal challenges. On his first day in office, President Donald Trump signed an executive order halting diversity programs across the federal government and mandating the disbanding of DEI departments. Additionally, Attorney General Pam Bondi directed the Department of Justice to investigate and penalize “illegal” DEI programs at private-sector companies and universities that receive federal funding. These measures have created uncertainty for organizations, prompting many to reassess their DEI strategies to avoid legal risks.

KPMG US, which receives $406 million annually from federal contracts, including over $200 million from the Department of Defense, is among the firms Compliance with federal regulations has become a priority. In his memo to staff, Knopp acknowledged the evolving legal environment and stated that the firm would “uphold the highest ethical standards and fully comply with all applicable laws and regulations.” This includes ending the use of forward-looking metrics based on protected categories like race or gender and removing annual DEI transparency reports from its website.

The Rise and Fall of KPMG’s Accelerate 2025 Strategy

KPMG’s “Accelerate 2025” strategy was launched in 2020 amid the national reckoning over racial justice sparked by the Black Lives Matter protests. The program aimed to increase diversity in recruitment and retention, with ambitious goals such as having 50% of managing partners and managing directors come from underrepresented groups by 2025. Knopp introduced the initiative in a LinkedIn post on Juneteenth, framing it as a commitment to ensuring the firm’s leadership reflects the diversity of America.

At the time, Knopp also pledged transparency, promising to publish regular updates so stakeholders could hold the firm accountable. By September 2023, KPMG reported that 45.3% of its US partners and managing directors came from underrepresented groups, including women, racial minorities, and LGBTQ+ individuals. However, progress remained uneven. In January 2024, Knopp acknowledged that only 24% of partners were women and just over 2% were Black, highlighting the gap between the firm’s goals and the representation of certain groups.

Employee Reaction and Reassurance

The decision to end Accelerate 2025 has not sparked widespread frustration among KPMG employees, according to sources familiar with the matter. One employee, who requested anonymity, noted that the firm has made efforts to reassure staff through Q&A sessions and other communications. This suggests that while some may be concerned about the implications for inclusivity, the leadership has managed to address fears about the firm’s commitment to DEI.

However, the rollback of DEI initiatives has broader implications for the industry. Fellow Big Four firm Deloitte has also scrapped its DEI programs, citing the need to comply with federal laws. This trend raises questions about whether other companies will follow suit and what this means for the progress made toward greater diversity in corporate leadership.

KPMG’s Commitment to Inclusivity Amid Change

Despite ending the Accelerate 2025 program, KPMG US continues to emphasize its commitment to diversity and inclusion. Knopp assured employees that the firm remains “unwavering in our commitment to fairness and inclusivity,” though the specifics of how this commitment will be realized in the absence of the previous strategy remain unclear. The firm’s website no longer hosts annual DEI transparency reports, which once provided a detailed accounting of progress toward its diversity goals.

The elimination of these reports has sparked concerns about accountability and transparency, particularly as the firm moves away from metrics tied to protected categories. While KPMG maintains that its website now reflects current policies and programs, critics argue that removing these reports diminishes the firm’s ability to track and communicate its progress on DEI issues.

Implications for the Future of DEI in Professional Services

The rollback of DEI initiatives at KPMG US and other Big Four firms reflects a challenging new era for diversity efforts in corporate America. Many companies expanded their DEI programs in response to the social justice movements of 2020, but the current political and legal climate has forced them to reevaluate their strategies. While KPMG and its competitors emphasize their ongoing commitment to inclusivity, the shift away from structured DEI initiatives and measurable goals raises questions about whether progress toward greater diversity will stall or even reverse.

For now, KPMG US and other firms must navigate a complex landscape of legal requirements, political pressures, and stakeholder expectations. The firm’s ability to uphold its values of fairness and inclusivity while adapting to these changes will be closely watched, not only by its employees but also by clients, regulators, and the broader public. As the professional services industry evolves, the fate of DEI initiatives will serve as a critical test of corporate commitment to diversity and inclusion in uncertain times.