As corporate diversity and inclusion programs come under attack, not all companies have downsized.
At Costco's annual meeting Thursday, shareholders are expected to vote on a proposal by the National Center for Public Policy Research, a conservative think tank, that would require the company to report on the potential risks its diversity programs could pose to its bottom line.
Prior to the vote, Costco's board of directors vigorously defended DEI, saying such efforts reward shareholders and “strengthen our ability to attract and retain employees who contribute to the success of our business.” insisted.
Unlike Costco, some of the nation's largest companies are backing away from, or at least staying silent about, efforts to increase racial and gender equity in the workplace. They include discrimination lawsuits, campaigns by social media influencers like Robbie Starbuck, and efforts by President Trump, who on Tuesday signed an executive order directing government agencies to investigate DEI programs in publicly traded companies. Under pressure from the government, it withdrew from these efforts.
But Costco is one of several large publicly traded companies that publicly maintains its commitment to DEI despite mounting pressure. Many of these companies have had diversity initiatives in place for more than a decade.
Apple opposed a similar proposal from a think tank this month. “We strive to create a culture of belonging where everyone can do their best work,” the board said in a letter to shareholders.
In October, Microsoft CEO Satya Nadella said in the company's annual report on diversity and inclusion that these values ”encourage our employees to care for the planet we serve.” “We will continue to represent our customers and ensure that the products we develop always meet the needs of our customers.”
This week, Pinterest's chief legal officer Wanji Wolcott wrote on LinkedIn that the company's “investment in a diverse and inclusive workforce with equal opportunities” is “of tremendous value to both our users and advertisers.” ”, he wrote.
And on Wednesday, JPMorgan Chase CEO Jamie Dimon said the company has no intention of backing away from its DEI efforts in response to activists. “Bring them in,” he said in an interview with CNBC.
Costco, Microsoft, Apple, Pinterest and JPMorgan did not immediately respond to requests for comment on the impact of Trump's executive order on Tuesday, but the executive order does require government agencies to “enforce the most egregious and discriminatory DEI.” “Practitioners'' and propose potential legal avenues and means. Regulatory measures. Starbuck said on social media Wednesday that DEI is “cornered and in danger of death, but we must discipline and relent to end this ideology.”
Shareholder proposals have become a popular way for corporate activists to challenge and support diversity initiatives, climate action, and other social issues. However, compared to social media attacks, there has been little success so far. Companies including Lowe's, Molson Coors and Toyota have announced policy changes after Mr. Starbuck targeted them on social media. “But they weren't the company we destroyed.)” We plan to work on it in early 2025. ”). However, most companies prefer to remain in control of their policies and routinely reject shareholder proposals, even if they are already considering similar changes internally.
In 2024, the National Center for Public Policy Research submitted proposals challenging the environmental, social, and governance policies of 61 companies. According to the database Proxymonitor.org, none of the proposals passed, with an average support rating of just 2%. John Deere and Boeing were among the companies that opposed the think tank's anti-DEI proposals, but later withdrew their diversity programs.
Costco's opposition to the think tank's proposal was particularly strong and drew attention.
Beth Young, a corporate governance attorney who advises institutional investors on shareholder proposals, said Costco may be better able to withstand cultural headwinds than most companies because it started its diversity and inclusion efforts a long time ago. He said no. The company hired its first chief diversity officer in 2004. “They've been doing this for a long time, and they've attracted an investor base that is at least somewhat aligned with their approach,” she said.
Apple established its first employee group in 1986 and a supplier diversity program in 1993. Pinterest announced its first diversity goals in 2015. And Lindsay Ray McIntyre, Microsoft's chief diversity officer, wrote in a LinkedIn post: “Microsoft's original mission required a commitment to diversity and inclusion.” ”
Vicki Slade, an attorney with the law firm Davis Wright Tremaine, said companies that have historically committed to diversity may think that maintaining these benefits is something employees expect. “Employers know that if they demonstrate their values and commitment to their employees, that's important for retaining talent,” she says.
The relationship between Costco and its employees has deteriorated after the union representing approximately 18,000 Costco employees passed a resolution authorizing a strike if no agreement is reached in contract negotiations by January 31st. A delicate tipping point has been reached.
Some companies are directing their message of continued support for diversity and inclusion directly to their employees. “Despite a broader trend of companies changing their stance on diversity, equity, and inclusion,” Etsy CEO Josh Silverman wrote in an internal memo reviewed by the New York Times, , Etsy is steadfast in our commitment to building a diverse and inclusive workplace.” ”
This trend is also evident in hiring patterns. In the first two weeks of this year, there were 561 postings on ZipRecruiter for DEI program jobs. This is a 93% decrease compared to the same period in 2024.
“This steep decline reflects a rebound in 2024 that was primarily focused on high-profile companies, but now a rebound in small businesses and less visible sectors of the economy,” Julia Pollack, ZipRecruiter's chief economist, said in an email. This suggests that it may have spread to…
Some see current trends as a reflection of whether companies are truly focused on diversity.
“There are a lot of things that we haven't taken seriously in the past,” said John Rice, founder and CEO of Management Leadership for Tomorrow, a nonprofit organization dedicated to increasing economic mobility for underrepresented people. “Companies that have been affected may use this moment as an opportunity to take a step back and return to the status quo.” community. “People who have been doing this work for a long time will continue to do it.”
Jordyn Holman Contributed to the report.
