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United Kingdom
In a week when the new US government introduced legislation to ban DEI programmes in federal institutions, Costco shareholders followed the previous recommendation of their board and voted to reject calls to report on the risks of the company's DEI efforts.
An overwhelming 98% of shares voted against the measure which was earlier proposed by a shareholder and backed by the National Center for Public Policy Research ahead of the company’s January 23 annual meeting.
The initial proposal cited legal concerns following the US Supreme Court’s decision in SFFA v. Harvard, which ruled against race-based affirmative action in college admissions. Critics argue the ruling could extend to corporate DEI programs, and 13 state attorney generals have warned Fortune 100 companies of potential legal challenges.
"Marxist agenda"
In pre-recorded messages to the meeting, a representative for the National Center for Public Policy Research called DEI programs "illegal, immoral and detrimental to shareholder value," saying that the term is "concealing a radical Marxist agenda.”
In response, Costco's board chairman, Tony James, said its programs are "consistent with the company's values and code of ethics.”
"We have always been purposefully non-political and a welcoming workforce has been integral to the company's culture and values since its founding," he added.
The retail giant became an unlikely flag-bearer for DEI earlier this month when its board of directors took a firm stand to defend and expand diversity initiatives despite shareholder pressure.
Leading the charge was Jeff Raikes, a Costco board member and vocal proponent of DEI, who has urged businesses to resist scaling back their inclusivity efforts. Raikes, also co-founder of the Raikes Foundation and former CEO of the Bill & Melinda Gates Foundation, has been outspoken in emphasizing the economic and innovative benefits of diverse workplaces.
In a social media post, Raikes argued: “Attacks on DEI aren’t just bad for business - they hurt our economy. A diverse workforce drives innovation, expands markets, and fuels growth.”
Support for DEI
Although there are some notable companies abandoning DEI initiatives, support for DEI remains high. A study by The Conference Board indicated that while the volume of shareholder proposals targeting diversity and equity had more than tripled year-over-year, actual support for anti-DEI proposals has fallen from 5% to 2% during the same period.
There were just five such shareholder proposals in 2023 and 17 in 2024 out of the 3,000 publicly traded firms that represent the bulk of the US stock market.
In other words, less than 1% of public companies in the US saw shareholder proposals on DEI matters, with anti-DEI proposals receiving less than 2% support, according to the study. By comparison, proposals on social issues that weren't backed by anti-ESG groups saw roughly 20% support.
