Does the Private Sector “Truly Care” – Or Only When It Pays?

10 Feb

In 2026, the UK private sector is fluent in the language of “purpose”, “social value” and “DEI” (diversity, equity and inclusion). Corporate reports highlight commitments to inclusive workplaces, responsible supply chains and community investment. Major businesses have joined initiatives such as the new Social Value Commission, established by leading firms including Barratt Redrow, E.ON UK, Heathrow, Knight Dragon, Mitie, Pension Insurance Corporation and VodafoneThree to help ensure that local communities share in the benefits of private investment.

The question is whether this activity reflects a genuine re‑ordering of corporate priorities, or whether profit still dominates with DEI and social value deployed when – and only when – they support the bottom line. A second Trump presidency in the United States and the continued rise of populism across Europe add further complexity, shaping how corporate leaders assess the risks and rewards of visible commitments to diversity and social value.

Let’s look at the following key issues:

1. How seriously the UK private sector is taking diversity and social value in 2026.

2. Whether profit still dominates decision‑making when values and returns come into tension: is profit still King?

3. How Trump‑era politics and European populism have influenced the DEI agenda in the UK.

4. We will then look at three indicative case studies in the finance, construction and tech sectors.

1. The State of DEI and Social Value in the UK Private Sector

Over the past decade, progress on headline indicators of diversity has been significant:

· Gender representation at board level

· The FTSE Women Leaders Review reported in 2023 that women held 40.2% of board roles across the FTSE 350, up from 9.5% in 2011.

· This surpassed the voluntary 40% target ahead of schedule and placed the UK among global leaders on female board representation.

Ethnic diversity at senior levels

The Parker Review reported in 2023 that 96% of FTSE 100 companies had at least one director from a minority ethnic background, compared with 52% in 2017. The target of at least one minority ethnic director on each FTSE 100 board by 2021 has effectively been met.

Gender pay gap

Mandatory gender pay reporting for employers with 250+ staff, introduced in 2017, has created transparency but change has been far from stellar. The UK median gender pay gap was 9.1% in 2023, compared with 9.7% in 2017.⁴ Many large employers still report double‑digit gaps, especially in finance and professional services.

Ethnicity pay gap

Ethnicity pay gap reporting remains voluntary at UK level, though the Mayor of London requires it for Greater London Authority Group organisations. A growing number of large employers, including major banks and consultancies, have begun publishing their data, which generally reveals material gaps, particularly for Black employees. Coverage, however, is still patchy and one feels this should be made mandatory like gender pay gap reporting.

In 2026, the broad direction of travel is clear:

· Board‑level diversity has improved markedly in numerical terms.

· Nonetheless, intersectional gaps (for example, women of colour in the most senior roles, disabled leaders, socio‑economic background) remain substantial and under‑reported.

· Many organisations have moved from “awareness‑raising” towards more structural interventions in recruitment and progression, but depth and consistency vary significantly by sector and size.

Social Value: From Contractual Obligation to Strategic Concern

“Social value” – the broader social, economic and environmental benefits created by an organisation – has become an entrenched concept in UK public procurement and is increasingly shaping private‑sector strategy:

The UK Government’s Social Value Model requires central government procurement to explicitly evaluate social value, typically at a minimum of 10% of the tender score.⁵ This has compelled private contractors to develop structured social value plans around local employment, skills, supply chain diversity and environmental impact.

Social value has become standard language in sectors closely linked to public spending – including construction, facilities management, defence, healthcare and infrastructure – and is now moving into finance and tech via ESG, community investment and digital inclusion agendas.

The Social Value Leaders’ Summit and associated networks highlight growing cross‑sector collaboration, with businesses, social enterprises and public bodies sharing practices and frameworks for measurement.

Companies such as ESS (part of Compass Group) have articulated future strategies centred on “diversity within our supply chain” and increasing spend with social enterprises to deliver measurable social impact.

Across the economy:

Large, procurement‑heavy organisations tend to lead on social value integration, while many mid‑sized firms still approach it as a tender requirement rather than a core strategic lens.

Measurement is inconsistent. Firms draw on a mix of the Social Value Portal’s TOMs (Themes, Outcomes and Measures), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) and bespoke indicators, leaving limited comparability and opportunities for selective reporting.

2. Is Profit Still King?

The key issue is not whether companies communicate about DEI and social value; it is what happens when those commitments collide with short‑term financial or political pressures.

When DEI and Social Value Align with Profit

There is robust evidence linking aspects of diversity and social value to long‑term financial performance:

· McKinsey’s 2020 “Diversity Wins” report found that companies in the top quartile for gender diversity on executive teams were 25% more likely to outperform on profitability than those in the bottom quartile; for ethnic diversity, the outperformance was 36%.

· Behavioural research in the UK and elsewhere shows that structured, evidence‑based recruitment processes (e.g. anonymised CV screening, standardised interviews) improve selection quality, not only diversity.

· Social value can be directly revenue‑generating: under the UK Social Value Model, credible social value proposals are often the differentiator in winning large public contracts, particularly in construction, facilities management and outsourcing.

In these areas, the “business case” for inclusion and social value is well‑established. Many organisations have integrated DEI and social value because they support:

· Talent attraction and retention in a tight labour market.

· Innovation and market insight across diverse customer bases.

· Risk management, including reputational and regulatory risk.

· Access to public sector and ESG‑sensitive capital.

When Values Compete With Short‑Term Gains

However, when DEI and social value require structural change, challenge profitable business models, or risk political backlash, profit and risk‑aversion often reassert themselves:

Budget cuts and consolidation

In periods of economic pressure – the post‑pandemic recovery, inflation and the cost‑of‑living crisis – DEI and community investment budgets are frequently among the first to be scrutinised. In many organisations, standalone DEI roles have been absorbed into broader HR or ESG portfolios, sometimes reducing dedicated capacity.

· Slow progress on costly reforms

· Reforms with significant financial implications – for example, overhauling pay structures, altering bonus schemes that favour certain working patterns, or investing in large‑scale accessibility improvements – tend to progress more slowly than low‑cost interventions like awareness campaigns and one‑off training.

Cautious public positioning

Many organisations adopt visible stances on broadly supported topics (e.g. mental health, high‑level commitments to gender equality), though in reality these can be poorly delivered, but are more cautious on politically contested issues such as migration, policing, or trans inclusion. Visible activism is often limited by concerns about media backlash, customer reactions, and internal polarisation.

Persistent supply chain tensions

Despite the UK Modern Slavery Act (2015), independent reviews have repeatedly found that many company statements remain generic and low‑substance. When cost and speed pressures conflict with labour standards, particularly in long international supply chains, commercial imperatives still frequently dominate.

The underlying conclusion is that profit remains the dominant driver. However, the boundaries of what is considered an acceptable route to profit – in terms of workforce equity, community impact and environmental responsibility – are gradually shifting, and this shift is partly enforced by regulators, investors and corporate customers.

3. The Trump Presidency, European Populism and UK DEI

DEI and social value in UK business do not exist in a vacuum. They are shaped by a global political environment characterised by polarisation, culture wars and challenges to multilateralism.

The “Trump Effect”: Culture Wars and Corporate Caution

The cumulative effect of Trump‑era politics in the US, including his second term, is visible in the UK corporate context in several ways:

Import of US cultural narratives

UK discourse around “woke capitalism”, “critical race theory” and “gender ideology” often echoes US talking points. UK‑based multinationals with US operations have witnessed boycotts and political attacks on brands perceived as overly “woke”, and this informs a more cautious global communications strategy.

Shift in language and framing

Many UK corporates have adopted more neutral or universalist language – emphasising “belonging”, “respect” and “fairness for all” – over overtly justice‑oriented framing. References to structural racism, patriarchy or colonial legacies are more likely to appear in internal documents than external statements.

Balancing internal constituencies

Workforces are increasingly ideologically diverse. Some employees expect strong corporate leadership on racial and social justice; others view DEI as overreach. Leaders attuned to US dynamics are often reluctant to take firm public positions that could inflame internal or external conflict.

European Populism: National Identity, Migration and Legitimacy

Across Europe, populist parties have gained prominence, often foregrounding national identity, scepticism towards immigration, and resistance to perceived “elite” or “globalist” agendas. This intersects with UK dynamics post‑Brexit:

Narratives of “left behind” communities

UK political debate continues to focus on regional inequality and communities that feel marginalised by economic change. Corporate DEI is sometimes portrayed in populist narratives as preoccupied with metropolitan identities rather than regional economic justice.

Scepticism about ESG and DEI

Some populist politicians and commentators frame ESG, net zero and DEI as elite priorities that impose costs on ordinary people. Businesses responding to these pressures often emphasise tangible benefits – such as jobs, apprenticeships and local investment – over abstract value statements.

For UK companies, this environment:

· Increases the reputational risk of being perceived as “out of touch” or “lecturing” customers and communities.

· Simultaneously increases the strategic value of genuinely grounded social value that can demonstrate local economic and social benefits.

Net Effect: Quiet Resilience Rather Than Retreat

Despite these political headwinds, DEI and social value have not collapsed in the UK private sector. Instead, there is a shift in how they are articulated and embedded:

· Increased focus on governance and reporting – board oversight, data disclosure, and links between executive remuneration and social or diversity metrics.

· Movement from symbolic interventions to systemic changes in recruitment, promotion, reward and supply chains, albeit unevenly.

· Framing DEI and social value as components of risk management and long‑term value creation, rather than as standalone moral imperatives.

4. UK Case Studies: Finance, Construction and Tech

To move beyond generalities, it is useful to examine how different sectors are operationalising DEI and social value under these conditions. The following case studies are illustrative rather than exhaustive; they draw on public disclosures, independent reviews and sectoral trends.

Case Study 1: Finance – A Major UK Bank Confronting Pay and Progression

Large UK‑headquartered banks have been under scrutiny for their record on gender and ethnicity, particularly given historically high pay and significant influence over the wider economy.

A typical illustration is a FTSE‑listed universal bank that:

· Publishes detailed pay gap data

· The bank voluntarily reports on both gender and ethnicity pay gaps, broken down by business unit and job level. Public data from leading UK banks has shown:

· Median gender pay gaps often in the 25–35% range, reflecting under‑representation of women in front‑office, high‑bonus roles.

· Ethnicity pay gaps that are smaller at aggregate level but more pronounced for Black employees in particular.

· These disclosures exceed legal requirements but also expose reputational vulnerability.

Links DEI performance to remuneration

· The bank has introduced a DEI scorecard, covering metrics such as representation targets at senior levels, inclusive leadership behaviours, and employee survey results on inclusion. A proportion of senior executives’ variable pay is now contingent on performance against this scorecard.

Invests in targeted progression

· Sponsorship and leadership development for women and ethnic minority colleagues at mid‑senior levels.

· Reverse mentoring of executives by staff from under‑represented groups.

· Partnerships with universities and charities to create early‑career pathways for students from lower socio‑economic backgrounds (e.g. foundation apprenticeships, contextual recruitment).

Aligns social value with financial inclusion

The bank’s social value strategy emphasises access to finance for underserved communities and SMEs, support for social enterprises, and digital skills programmes. It collaborates with community finance institutions and social lenders to reach customers who may otherwise rely on high‑cost credit.

Tension with profit

While reporting and programmes are robust, the structural drivers of pay gaps – notably the distribution of high‑remuneration front‑office roles – remain largely. Addressing these would require reconfiguring business models, reward structures and working cultures at scale. Progress therefore remains steady but incremental, reflecting the continuing primacy of revenue‑generating activities.

Case Study 2: Construction – Social Value as a Route to Market

The UK construction sector sits at the centre of the social value agenda due to its dependence on public contracts and its visible impact on local communities. Consider a large contractor or housebuilder operating across major public infrastructure projects:

Embedding social value in bids and delivery

The firm systematically integrates social value commitments into bids in line with the UK Government’s Social Value Model. These may include:

· Local employment and apprenticeships, often with quantifiable targets (e.g. a set proportion of project hours delivered by residents of specified postcodes).

· Training and upskilling programmes, including collaboration with FE colleges and local schools.

· Targets for spend with SMEs, voluntary organisations and social enterprises.

· Community facilities or public realm improvements linked to developments.

Measuring and reporting impact

The contractor uses recognised frameworks (e.g. Social Value Portal’s TOMs) to quantify social value delivered in monetary terms (e.g. value of apprenticeships, local wages, community investments). This data is reported to public‑sector clients and featured in annual reports.

Diversity and inclusion on site

The firm runs targeted initiatives to increase representation of women, ethnic minorities and younger workers in construction trades and site management. Examples include:

· Pre‑employment training for under‑represented demographics.

· Flexible working pilots to support parents and carers.

· Zero‑tolerance policies on harassment and racist or sexist abuse on site.

Local legitimacy and planning

For major regeneration schemes, the company participates in or convenes community forums, co‑design workshops, and tenant/resident groups to secure buy‑in, mitigate opposition and co‑create community benefits.

Tension with profit

Social value is clearly a route to market in this sector; failing on social value criteria can mean losing high‑value public contracts. However, margins in construction are often thin, and there is ongoing pressure to standardise and, at times, minimise commitments to what is necessary to win bids. True transformation – for example, significantly shifting workforce composition or radically rethinking apprenticeships to widen access – competes for investment with other priorities such as digitalisation and off‑site manufacturing. There is a danger that social value is prominent in bids and tenders but in reality is not visible at through contract delivery.

Case Study 3: Tech – Inclusion in a High‑Growth, High‑Profile Sector

The UK tech sector, particularly in London, Manchester, Cambridge and other hubs, has become emblematic of both opportunity and inequality:

· High‑growth firms and large global platforms have faced criticism for under‑representation of women, Black and minority ethnic employees, and workers from lower socio‑economic backgrounds, particularly in technical and leadership roles.

· At the same time, tech’s role in automation, AI and platform economies raises questions about the distribution of work, surveillance and digital exclusion.

A UK‑based technology company (for example, a FTSE‑listed software or fintech provider) might:

· Set explicit representation goals

· The company publishes targets for gender and ethnic diversity in technical roles and management, with annual disclosure on progress. Some leading firms have, for example, set goals to achieve gender parity in entry‑level technical hiring by mid‑decade.

Redesign recruitment and early‑career pathways

· Removing degree requirements for more roles and focusing on demonstrable skills via coding challenges or portfolio review.

· Running apprenticeships and bootcamp partnerships targeting candidates from non‑traditional or under‑represented backgrounds.

· Broadening university outreach beyond the “Golden Triangle” to include regional institutions and colleges.

Focus on inclusive product design and digital inclusion

As part of its social value commitment, the firm:

· Invests in digital literacy programmes in partnership with schools, charities and local authorities.

· Conducts inclusive design reviews to ensure products are accessible and do not embed bias (e.g. in AI‑driven decision tools).

· Supports employee volunteering in coding clubs or mentoring schemes for under‑represented young people.

Navigating global culture wars

The company operates in multiple jurisdictions, including the US and EU. It maintains internal DEI programmes and employee resource groups but is careful in external communications to emphasise “inclusive innovation”, equal opportunity and compliance with local law, rather than overt social activism.

Tension with profit:

High‑growth tech environments place a premium on speed and flexibility. Inclusive hiring and product design can be perceived internally as slowing delivery or increasing costs, even when they prevent costly problems later. The firm’s commitment is therefore strongest where DEI and social value are clearly connected to talent attraction (particularly among engineers) and regulatory risk mitigation (for AI and data‑driven products).