The DEI Backlash: What Target’s Lawsuit Means for Corporate Strategy in 2025
GLG Insights | Verônica Grigoletto | May 27, 2025
If you are a subscriber to our newsletter, you’ve seen us emphasize the importance of leading with strategy—not just statements. In today’s environment, DEI is not simply a social issue. It’s a cultural, legal, and financial one. And as narratives shift, we’re reminded that companies who fail to lead with clarity often find themselves caught between public backlash and internal confusion.
Target’s legal and financial challenges are a powerful case study in this dynamic. What happens when DEI becomes a liability—not because of the work itself, but because of the way it’s managed, communicated, and misunderstood?
The Lawsuit: A Collision of Values and Visibility
In 2023, Target launched a Pride Month campaign featuring LGBTQ+ inclusive merchandise. Almost immediately, the company was met with backlash—both from conservative political groups and from longtime supporters who felt the brand’s retreat from the campaign signaled a lack of backbone. The result? A fractured brand identity that struggled to hold trust on either side.
Now in 2025, we’re seeing the impact in real time:
The lawsuit has opened the door to a new kind of accountability—one driven not by public opinion, but by shareholder litigation. The message is clear: if companies can’t connect DEI to business strategy, they risk legal exposure.
Competitors Holding the Line
Compare this to companies like Costco and Walmart, both of which have navigated similar political environments without the same fallout. Costco, in particular, has seen a 4.6% increase in foot traffic over the last year. Why? Their brand consistency, employee-focused business model, and quieter—but steady—values alignment have helped them maintain trust across customer segments.
In contrast, Target’s attempt to shift direction in real time—without a clear strategy—has left investors, customers, and employees unsure of where the company stands.
Strategy Over Optics
This isn’t just about DEI. It’s about strategic decision-making under cultural pressure. As legal scrutiny grows and political rhetoric intensifies, companies face a fundamental choice: react to controversy, or lead with clarity.
At GLG, we recommend a few core principles:
Be Transparent with Stakeholders
Communicate clearly how DEI and ESG efforts are tied to your business objectives. If you can’t explain the strategy, it’s not ready for market—or for shareholder reports.Refine, Don’t Retreat
Too many companies equate backlash with failure. In reality, most audiences value authenticity and consistency, even in the face of disagreement.Prepare for the Legal Landscape
Don’t wait until a lawsuit is filed to assess your risk. DEI, ESG, and values-based commitments should be reviewed like any other strategic investment—with compliance, legal, and cultural insight at the table.Center Cultural Intelligence
The strongest strategies are informed by real data and social context. Cultural shifts don’t always show up in the balance sheet right away—but the cost of ignoring them always does.
Beyond Backlash: Building a Sustainable DEI Strategy
It’s not enough to say DEI matters. It has to be built into the fabric of your organization. As more companies face legal threats, funding cuts, and consumer skepticism, one thing is becoming clear: reactive leadership creates more risk than reward.
The path forward isn’t about silencing values. It’s about strengthening strategy.
At Glass Ladder Group, we support organizations in navigating moments like these—not through crisis management, but through long-term positioning, policy alignment, and cultural insight. We help clients build strategies that align purpose with performance—and that stand up under pressure.
If your organization is rethinking its DEI approach in today’s environment, let’s talk. Now is the time to lead with intention—not fear.