This week in ESG news, corporate actions are under intense scrutiny, revealing a variety of changing priorities and potential pitfalls. From Bank of America's shift in DEI practices and Apple's unwavering commitment, to Microsoft's controversial reliance on fossil fuels and DoorDash's settlement over wage practices, these stories highlight the diverse challenges and choices facing companies today. Tesla's struggles with sales and market value further underscore the impact of sound governance practices and ethical considerations on financial performance. These developments serve as crucial reminders of the interconnectedness between ESG factors, corporate reputation, and investor confidence. Read on for a deeper dive into these key stories.
BofA Ditches Diversity Goals
Bank of America (BofA), the second-largest US lender, has eliminated its diversity hiring goals and related initiatives in response to the changing business environment under President Donald Trump's administration. This move, revealed in the bank's annual report on February 26th, 2025, marks a significant shift in its approach to DEI practices.
The bank has removed references to its diversity recruitment targets and a guideline that required hiring managers to consider a diverse pool of applicants. BofA is also renaming its "Global Diversity and Inclusion Council" to the "Global Opportunity and Inclusion Council" and replacing the word "diversity" with "opportunity" in various internal groups.
These changes align with similar actions taken by other major financial institutions, including Citigroup, JPMorgan Chase, and Wells Fargo, who have also understated DEI mentions in their regulatory filings. The adjustments are attributed to recent legal changes and directives from the Trump administration, particularly an executive order affecting government contractors.
Despite these modifications, BofA CEO, Brian Moynihan, maintains that the bank still values diversity and inclusion. During an event at The Economic Club in Washington DC, he stated, "We have diversity and inclusion at our company. But, step back: we've always been the bank of opportunity".
The bank's annual report now focuses on creating an "inclusive environment" and emphasises "talent" and "opportunity" rather than explicit diversity goals. A BofA spokesperson highlighted that the bank remains "deliberate about the many ways we seek to create an inclusive environment where everyone has the opportunity to achieve their career goals".
BofA currently boasts a strong Diversity and Inclusion score of 89/100, placing them second out of 608 companies in the Banks industry. However, this standing could be at risk if this recent news indicates a decline in the company's DEI practices. Despite Moynihan’s assurances, the long-term effects of these changes on BofA's DEI performance and reputation remain to be seen.
Apple Stands Firm on DEI
On the other end of the spectrum, Apple shareholders have overwhelmingly rejected a proposal to end the company's DEI efforts during their annual meeting on February 25th, 2025. The proposal, submitted by the National centre for Public Policy Research, aimed to discontinue Apple's DEI programs, policies, and goals, citing potential legal and financial risks.
Despite the growing trend of major US corporations scaling back their DEI initiatives in response to former President Donald Trump's anti-DEI rhetoric, Apple has chosen to maintain its commitment to diversity. CEO Tim Cook defended the company's stance, emphasising that Apple's strength lies in fostering a collaborative culture where individuals from diverse backgrounds contribute to innovation.
However, Cook acknowledged that some adjustments to Apple's DEI practices may be necessary due to the changing legal landscape. He stated, "As the legal landscape around these issues evolves, we may need to make some changes to comply, but our North Star of dignity and respect for everyone and our work to that end will never waver".
The decision to retain DEI policies has drawn criticism from President Trump, who demanded in a tweet that Apple eliminate its DEI rules entirely: “APPLE SHOULD GET RID OF DEI RULES, NOT JUST MAKE ADJUSTMENTS TO THEM.” Despite this pressure, Apple's shareholders have backed the company's position, viewing DEI efforts as crucial for attracting and retaining top talent.
Apple's strong Diversity and Inclusion score of 89/100, placing them second among 96 companies in their industry, underscores their commitment to DEI practices. Despite potential adjustments to comply with the changing legal landscape, Apple's dedication to these initiatives stands in contrast to peers retreating from DEI commitments. It will be interesting to see if this attitude impacts Apple's future ranking and score relative to competitors who have chosen to scale back their diversity efforts.
Microsoft's Green Promise vs. AI Reality
Microsoft is facing criticism for its shift towards fossil fuels to power a new $3.3 billion AI data centre project in Wisconsin. This move reflects a growing trend among tech giants to rely on natural gas for their energy-intensive AI operations.
The company plans to develop up to 1,200 acres in Mount Pleasant and Kenosha County for its data centre campus. To meet the massive electricity demands, local utility We Energies is proposing a $2 billion plan for new natural gas generation, which it claims is "critical" to powering Microsoft's AI operations.
Environmental groups, led by Clean Wisconsin, have urged Microsoft to reconsider its plans, arguing that this could lock the state into "30 more years of fossil fuels", with the proposed gas plant predicted to emit up to 590,000 tons of greenhouse gases annually.
Microsoft has publicly committed to powering its data centres with clean, renewable energy. However, the company's actions in Wisconsin seem to contradict these statements as We Energies insists that gas plants are necessary to ensure reliable supply during the transition to clean energy.
The situation in Wisconsin is not unique. Other tech giants like Amazon, Microsoft, and Meta are rapidly expanding their data centre operations to support the growing demand for AI and cloud services, creating significant challenges for local power grids and utilities in several states.
Microsoft's Environmental score of 49/100 and GHG Emissions score of 55/100 currently place them 39th among their 691 Software industry peers. However, their recent decision to use natural gas for data centre power could significantly impact these scores and this shift towards fossil fuels contradicts their previous environmental commitments and may affect their sustainability rankings. To mitigate these impacts, Microsoft has been increasingly turning to carbon offsetting and credits, securing large-scale agreements such as the purchase of 3.5 million carbon credits over 25 years to offset emissions from their expanding AI operations. As Microsoft navigates this change, it will be crucial to monitor how their environmental performance and industry standing change in response to these new energy choices and offsetting strategies.
Doordash Wage Scandal Highlights Gig Economy Challenges
DoorDash, the popular food delivery app, has agreed to pay nearly $17 million to settle claims that it unfairly used customer tips to subsidise delivery workers' wages in New York. The settlement, announced by New York Attorney General Letitia James on February 24, 2025, addresses practices that occurred between May 2017 and September 2019.
During this period, DoorDash employed a controversial pay model where customer tips were used to offset the guaranteed base pay for delivery workers. The company would guarantee a minimum payment for each delivery but would only pay workers the difference between the guaranteed amount and the customer's tip. This practice effectively reduced DoorDash's costs while misleading customers who believed their tips were additional income for drivers.
The settlement includes $16.75 million in restitution for affected workers and up to $1 million for settlement administration costs. Approximately 63,000 New York-based Dashers are eligible for compensation.
As part of the agreement, DoorDash is required to maintain a pay model that ensures tips are paid to Dashers in full, without impacting the company's contribution to guaranteed pay. The company must also improve transparency regarding its pay policies and enhance access to delivery history for workers. While DoorDash maintains that its practices during the period in question were proper, the company has stated it is pleased to have resolved the matter.
DoorDash currently holds a Compensation and Benefits score of 56/100, placing them fifth out of 10 among their industry peers. The recent settlement of their wage scandal may provide an opportunity for improvement in this area, so it will be worth observing whether their efforts to address past practices and enhance transparency contribute to a higher score in the future.
Political Storms and Sales Slumps Threaten Tesla
Tesla is facing significant challenges as its stock price and European sales plummet, with potential links to CEO Elon Musk's controversial political involvement.
The electric vehicle maker's stock tumbled 8.4% on Wednesday, pushing its market capitalisation below the $1 trillion mark. This decline has made Tesla the worst performer among the Magnificent Seven stocks in 2025, with shares down 22% year-to-date and 37% from their December 17, 2024 peak.
Simultaneously, Tesla's European sales have taken a dramatic hit. In January 2025, the company sold just 9,945 cars in Europe, a 45% decrease from the same period last year. This decline is particularly striking given that overall electric vehicle sales in Europe rose by 37% during the same timeframe. The drop was especially severe in key markets, with sales plummeting 59.5% in Germany and 63% in France.
Industry analysts suggest that Elon Musk's recent political activities may be contributing to the sales slump. Musk's close ties with President Donald Trump and his alleged involvement in European politics, including support for Germany's far-right AfD party, have sparked controversy. However, it's important to note that Tesla's declining sales could also be attributed to increasing competition from other EV manufacturers and a drop in used EV prices. The rise of affordable electric vehicles from established automakers and emerging Chinese brands has intensified market competition. Additionally, the growing availability of cheaper used EVs may be attracting cost-conscious consumers away from new Tesla models, further impacting the company's sales figures.
The sales decline has been so significant that Tesla's market share in Europe fell to 1% from 1.8% a year earlier, and for the first time, Tesla was outsold in the UK by Chinese rival BYD.
Key Takeaways
This week's ESG headlines reveal a dynamic and often contradictory space. Bank of America and Apple present contrasting approaches to DEI, reflecting the broader societal debate on diversity initiatives. Microsoft's reliance on fossil fuels highlights the tensions between technological advancement and environmental responsibility. DoorDash's settlement underscores the importance of fair labour practices, and Tesla's troubles serve as a cautionary tale about the impact of leadership decisions on corporate value. For investors, these stories emphasise the necessity of a holistic ESG perspective, one that considers not only environmental and social factors but also governance and ethical considerations. By carefully evaluating companies' commitments to sustainability and responsible practices, you can make more informed decisions and contribute to a more equitable and sustainable future. However, it's crucial to note that ESG is a complex and ever-evolving landscape, with standards and practices constantly changing. These headlines provide brief snapshots in time, and the ESG performance of companies can fluctuate rapidly as new challenges and opportunities emerge. Investors should remain vigilant and continuously reassess their ESG strategies in light of this dynamic environment.
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