Costco Stands Firm on Diversity Policies

Costco is taking a strong stance against a shareholder proposal that wants the company to assess the risks of its diversity, equity, and inclusion (DEI) practices. This proposal, pushed by the conservative think tank National Center for Public Policy Research, argues that Costco's DEI efforts could lead to legal, reputational, and financial issues. The proposal was expected to be voted on during Costco's annual meeting. Costco's board unanimously rejected the proposal, stating that their commitment to diversity fosters creativity and customer satisfaction. Other big consumer brands like Walmart and McDonald's have scaled back their DEI policies recently. This trend is partly due to a Supreme Court decision in July 2023 that banned affirmative action in college admissions. Conservative groups have been emboldened by this decision and are now targeting corporate DEI initiatives. They argue that these programs violate the U. S. Constitution by considering factors like race and gender. Costco, however, isn't budging. The company believes that its DEI practices are essential and beneficial. Neil Saunders, from GlobalData's retail division, thinks Costco's management has the support of shareholders and that the proposal will likely be rejected. Costco's executive ranks don't fully reflect the diversity of its customers. For instance, nearly 81% of its executives were white, and 72% were men last year. The National Center for Public Policy Research claims that at least 200, 000 of Costco's 300, 000 employees could be victims of illegal discrimination. Meanwhile, JPMorgan CEO Jamie Dimon has defended his bank's DEI policies, stating that they will continue to reach out to various communities. Trump's recent executive order against DEI programs could increase legal risks for companies that resist the conservative backlash.