Report Finds Companies That Maintain DEI Face No Financial Repercussions 

In news that’s surprising to no one who’s been paying attention, a recent report found that companies who maintained their diversity, equity, and inclusion (DEI) programs haven’t faced any financial repercussions. 

Target out here looking extra silly now. 

According to CBS News, the report found that S&P 500 companies that kept their commitments to DEI initiatives performed just as well in the stock market and on earnings reports as companies that backed away from DEI. 

One of the first things President Donald Trump did upon taking office was to issue an executive order banning DEI initiatives in the federal government and public universities. The Trump administration wasted no time targeting universities it believed were still implementing what it called “illegal DEI.” 

This led several private companies to quickly scuttle their DEI initiatives for fear of how the Trump administration might punish them.

“A publicly traded firm that’s out of step with an executive order might get less favorable treatment from the executive branch. Or if it’s planning a merger or acquisition, it might not be approved by the Federal Trade Commission, or it could be subject to hostile tax auditing,” Jacob Grumbach, an associate professor at the Goldman School of Public Policy at the University of California, Berkeley, and the co-author of the new paper, “Markets Do Not Punish Firms for Maintaining DEI,” told CBS News. 

“The fear was legitimate. At this time, there was a lot of uncertainty about how the executive order would be enforced.”

We saw this scenario play out last year, when T-Mobile abruptly ended its DEI initiatives ahead of a merger it needed the FCC to approve. FCC chair Brendan Carr said the quiet part out loud last year when he said that a company’s approach to DEI initiatives would be one of the factors the FCC would review before approving a merger. 

Notably, companies such as Costco, Apple, and Delta Air Lines maintained their commitments to DEI and haven’t faced a decrease in earnings or any pronounced pressure from the Trump administration. In fact, Costco’s earnings increased last year. Grumbach said the findings reveal U.S. companies “have a lot of leeway” to resist canceling their commitments to DEI.

No company has faced more backlash for ending its DEI commitments than Target. Within two days of Trump taking office, Target announced it would be ending its DEI initiatives, including a program designed to help Black employees advance within the company. 

Target’s decision was controversial because it spent much of the last decade making a show of its progressive bona fides. From large, in-store displays celebrating Pride and Black History Month to announcing a commitment to donate $100 million to organizations supporting Black communities in the wake of George Floyd’s murder, Target made progressive values part of its brand identity. 

So it should come as no surprise that Target’s decision to walk back on those values led to a prolonged boycott against the company. The boycott was effective as Target saw a decrease in earnings and foot traffic last year. 

“There is a business case for diversity, that firms that have DEI should perform better,” Grumbach said. 

Despite the Trump administration’s best efforts, the data continually shows that companies that maintain their DEI initiatives not only have better reputations, but also stronger earnings. Here’s hoping that more businesses get the memo.

SEE ALSO:

Target CEO Resigns Amid Ongoing Boycotts And Sales Woes

Rev. Jamal Bryant Calls For Full Target Boycott Over DEI Concerns

Target Boycotts Increase As Company Suffers Backlash Over Anti-DEI Policy