PwC drops some US diversity goals to meet changed legal landscape

PwC has dropped some of its diversity targets in the US and opened up previously off-limits scholarships to white students after pressure from rightwing activists and a Supreme Court ruling against affirmative action.

The Big Four accounting firm, which employs 46,000 people in the US, said it was applying “rigour” to its diversity, equity and inclusion efforts to reflect the new legal backdrop.

The changes included ending race-based eligibility criteria for a student internship programme and for scholarships to help candidates prepare for professional accounting exams, two initiatives that were designed to increase the diversity of the firm’s employee base, according to executives and changes made to PwC’s website.

The firm’s latest annual DEI report, published over the Martin Luther King Jr holiday weekend in the US, also dropped a pledge to award 40 per cent of its procurement spending to minority-owned suppliers.

The Supreme Court ruled last June against race-conscious university admissions, prompting legal analysts to warn that factoring a job applicant’s ethnicity into hiring decisions could also be considered unconstitutional. Companies including Pfizer and the law firm Morrison Foerster have also opened up diversity fellowships to students of all races.

PwC’s DEI report named the Supreme Court ruling among the challenges to progress in 2023, along with economic uncertainty and social unrest. “We’ve also reflected on the Supreme Court ruling and applied rigour to advance our diversity commitment in a way that fully accords with the changing legal landscape,” the report said.

PwC was targeted last year by America First Legal. The activist group is led by Stephen Miller, a White House policy adviser under former president Donald Trump, and argues that corporate diversity efforts discriminate against white employees.

AFL questioned whether PwC’s internship and scholarship programmes and supplier targets were legal, and asked the US Equal Employment Opportunity Commission to investigate.

“There are changes in nuance and emphasis, but this is still the same racial bean-counting that contrives to reduce individuals to their immutable characteristics in a way that is difficult to square with what the law requires,” said Reed Rubinstein, senior counsellor at America First Legal.

The DEI report showed that as of June 30 2023, 55 per cent of PwC US employees were white. Twenty-two per cent of employees identified as Asian and 9 per cent as Hispanic or Latino, both up 1 percentage point on the previous year, while black employees accounted for 7 per cent, the same as in 2022.

The firm amended some of the language in its report versus the previous year. It said it had an “aspiration” rather than a “goal” to reflect the racial make-up of the US university student population, which is 35 per cent black and Hispanic. It also removed a guide to diversity metrics that labelled them as “on track” or “behind”.

“Our commitment to attract the most diverse and dynamic group of professionals hasn’t changed,” Yolanda Seals-Coffield, chief people officer of PwC US, told the Financial Times. “Our commitment to cultivating an environment where all our professionals can thrive hasn’t changed. How we get there may face a few hurdles that it didn’t a year ago.”