Costco Defends its Diversity Policies as Other US Companies Scale Theirs Back

In contrast to a slew of companies, the warehouse retailer has forcefully rejected an anti-DEI shareholder proposal as bad for business.

Costco is pushing back on a shareholder proposal that urges the wholesale club operator to conduct an evaluation of any business risks posed by its diversity, equity and inclusion practices. Investors were expected to vote on the recommendation during the company’s annual meeting Thursday.

The National Center for Public Policy Research, a conservative think tank based in Washington, submitted the proposal, arguing that Costco’s DEI initiatives hold “litigation, reputational and financial risks to the company, and therefore financial risks to shareholders.”

The think tank has made a similar proposal to Apple, and like some American companies that already scaled back or retreated from their diversity policies, cited a U.S. Supreme Court decision in July 2023 that outlawed affirmative action in college admissions.

Costco officials could not be reached for comment on the DEI proposal.

But Costco’s board of directors voted unanimously to ask shareholders to reject the motion. The board said it believes “our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary. The report requested by this proposal would not provide meaningful additional information.”

The directors’ message to shareholders details how having diverse employees and suppliers has, in their view, fostered “creativity and innovation in the merchandise and services that we offer” and led to greater customer satisfaction among Costco members.

Neil Saunders, managing director of consulting firm GlobalData’s retail division, said Costco can be confident the proposal will be rejected.

“I think people generally have confidence in Costco’s management, and there’s an attitude of ‘Why rock the boat? It’s sailing very nicely,’” Saunders said.

Costco’s public stance in support of diversity, equity and inclusion programs contrasts with the positions taken in recent months by other big consumer brands, including Walmart,McDonald’s and John Deere.

Last week, more than 30 Walmart shareholders, including Amalgamated Bank and Oxfam America, asked the CEO of the nation’s largest retailer to explain the business impact of curbing the company’s DEI policies, a move they called “disheartening.”

Prominent technology companies, including Amazon and Meta — the parent company of Facebook and Instagram — also have rolled back DEI initiatives, which are expected to face opposition from the administration of President Donald Trump.

Emboldened by the Supreme Court’s decision on affirmative action at colleges and universities, conservative groups have filed lawsuits making similar arguments about corporations, targeting initiatives such as employee resource groups and hiring practices that prioritize historically marginalized groups.

On Monday, Trump signed an executive order aimed at terminating DEI programs within federal agencies. Conservatives have long condemned them, arguing they violate the U.S. Constitution by considering factors such as race, gender and sexual orientation.

via: AP

The post Costco Defends its Diversity Policies as Other US Companies Scale Theirs Back appeared first on LOVEBSCOTT.