The aggressive stance on equality, diversity and inclusion (EDI) and environmental issues (ESG) by the Trump White House has caused many UK companies to revisit their own policies or even end them, according to a survey.

Research by Freeths—the law firm that represented sub-postmasters during the Post Office scandal—says 54% of businesses have altered the way they approach ethics policies and practices, while more than one-quarter, 28%, have “made wholesale changes or abandoned them altogether”.

The news comes as Washington exerts pressure on the EU to make US firms exempt from new human rights and environmental due diligence requirements, and regulators suggest boards can block ESG proposals from shareholders.

Freeths interviewed 250 general counsels and chief legal officers at companies with a turnover of more than £100m for the survey.

Philippa Dempster, senior partner at the firm, says: “The truth is that a drive for profit can significantly impact or impede ethical decision-making.

“Our research exposed a troubling reality: while businesses express commitment to doing the right thing, there’s still a significant gap between principle and practice. And even in the light of the Post Office scandal, we’re seeing some UK businesses abandon valuable ethical and moral initiatives in response to outside influence.”

This is not the first alarm to be raised in response to the White House and its policy on EDI, or DEI as it is termed in the US, and ESG. Soon after coming to power, President Trump issued Executive Order 14151, banning federal agencies from deploying diversity programmes. This prompted many companies serving the government to adjust their policies.

At the time, the Institute of Directors called on UK companies to stick with EDI policies, saying a “constructive approach to inclusion and diversity makes sense from a business perspective, despite the political headwinds”.

However, Board Agenda understands some US companies were already warning UK counterparts and service providers that they could not be seen to publicly support diversity and ESG causes.

In May, a group of UK regulators issued a reminder of their support for diverse leadership and inclusion.

In a public statement, the chairs of eight regulators, including the Financial Reporting Council (FRC), said: “In challenging times, the chairs stress long-term success includes diverse leadership, integrity, inclusivity and stakeholder engagement.”

Principle J of the UK Corporate Governance Code, revised in 2024 and now in use, says appointments to boards should “promote diversity, inclusion and equal opportunity”. Any company failing to comply with the principle could be expected to explain why.

In notes written for the 2024 edition, the FRC writes that a company’s culture “should promote integrity and openness, value diversity and be responsive to the views of shareholders and wider stakeholders”.

Provision 23 of the Code asks boards to include any policy on diversity and inclusion in their annual reports.

The Trump administration has also taken action against environmental policies by killing off moves to introduce mandatory climate risk reporting for US companies and challenging proxy advisors over their stance on ESG.

In the UK, work continues on introducing new non-financial reporting rules based on guidance from the International Sustainability Standards Board (ISSB).

Freeths’ research shows attitudes hardening to non-financial issues, with 83% of corporate leaders saying that “doing the right thing” is secondary to profit in business. For those subject to the UK’s governance code, this view may place them in conflict with its principles and provisions. UK corporate leaders may be entering an uncomfortable phase of attempting to keep opposing sides happy.