Costco shoots down anti-diversity activists: 'Respect and inclusion is appropriate and necessary'
28 December 2024
a table full of children's books with people in the background
While other companies like Ford, Harley Davidson and Home Depot are turning their back on Diversity, Equity and Inclusion policies, Costco fought back, saying that their success is due to "respect and inclusion."
A group of shareholders brought a proposal to the board of big-box retailer Costco Wholesale, requesting the company drop its DEI policies. The proposal cites "a number of DEI-related lawsuits" and pointed to other large companies like Alphabet, Meta and Microsoft dumping DEI policies.
"It's clear that DEI holds litigation, reputational and financial risks to the Company, and therefore financial risks to shareholders," the proposal read.
The Costco board unanimously rejected this and urged all shareholders to vote against the proposal.
"Our Board has considered this proposal and believes that 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 to our shareholders, and the Board thus unanimously recommends a vote AGAINST this proposal," the board wrote.
"For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed. This capacity is critical because we owe our success to our now over 300,000 employees around the globe," it added.
And Costco did not pull its punches while dismissing the anti-DEI proposal.
"The proponent professes concern about legal and financial risks to the Company and its shareholders associated with the diversity initiatives. The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the Company but abolition of diversity initiatives," the board wrote.
The proposal was initially brought to the board by the National Center for Public Policy Research, a conservative think tank, according to CNN.
While corporate skittishness may be driving other companies to drop DEI policies, MK Chin, an associate professor and Jerome Bess Faculty Fellow at Indiana University’s Kelley School of Business, said that DEI policies can lead to better employee bases.
“Millennials tend to prefer companies to stand up, and they expect—even require—CEOs to speak up on these socio-political issues. Millennials are becoming more of a center of this economy. They’re becoming more important customers with greater disposable income. Boomers are retiring or retired. Generation Xers are getting into their 50s and 60s. Considering this trend in demographics, pulling back from this initiative could have a long-term impact,” Chin told LGBTQ Nation.
“Attracting and retaining human capital might have a bigger impact. They are customers, but they’re also employees. And a good amount of research shows millennial employees tend to prioritize the importance of purpose and values at the workplace. So if dumping these DEI initiatives is perceived as ‘we’re not treating everyone as whole,’ that could hurt in terms of attracting and retaining higher-quality human capital,” Chin added.
Though other companies have been skittish when anti-DEI activists like the NCPPR have brought concerns, Costco appears to be bearing Chin's thesis out. Costco is seen as one of the most progressive companies, with its many sustainability policies, urging suppliers to use more efficient packaging and partnering with organizations to make sure their products are sustainably sourced. It's also known for high wages for its employees and for taking steps to reduce emissions and embrace green energy.
And it turns out, progressivism is profitable for the company, which regularly reports increases in profits.
Photo by Tony Webster via Wikimedia Commons