Jamie Spencer
Costco Wholesale shareholders overwhelmingly voted against a proposal to assess the risks of maintaining the company’s diversity, equity, and inclusion (DEI) initiatives. The vote, announced on Thursday, signals strong investor support for Costco’s DEI policies, despite growing political scrutiny of such programs.
Shareholders Stand Behind DEI
More than 98% of Costco shareholders rejected the proposal at the company’s annual meeting, reinforcing the continued backing of corporate diversity efforts. The proposal, brought forward by the National Center for Public Policy Research, urged Costco to evaluate potential legal, financial, and reputational risks associated with its DEI initiatives.
The group, which describes itself as a free-market think tank, argued that such programs could negatively impact shareholder returns. However, Costco’s board opposed the measure, stating that the requested report would not provide “meaningful additional information” to investors.
DEI Under Increasing Political Pressure
The vote at Costco is being closely watched as a key indicator of investor sentiment toward corporate DEI programs. Many companies ramped up their diversity initiatives in 2020 following the Black Lives Matter movement, but these programs have since come under fire from conservative groups and political figures.
U.S. President Donald Trump has issued an executive order directing federal agencies, contractors, and private companies to dismantle DEI policies. He has also suggested that some businesses could face legal action if their diversity programs are found to be discriminatory.
Investor Sentiment Remains Steady
Despite the shifting political climate, investor support for DEI programs has remained strong. Similar shareholder proposals aiming to curb DEI initiatives at U.S. companies last year received less than 2% support on average.
Lindsey Stewart, director of stewardship research and policy at Morningstar Sustainalytics, noted that the Costco vote aligns with past trends. “Even if the political environment on inclusion in the workplace is changing, investors’ low propensity to support anti-DEI resolutions is thus far unchanged.”
How Other Companies Are Responding
While Costco shareholders rejected the proposal, other major corporations have been scaling back or modifying their DEI initiatives. Companies such as Meta Platforms, Amazon, JPMorgan Chase, and Boeing have altered or eliminated DEI goals and ended participation in certain corporate diversity indexes.
However, the Costco vote suggests that investors remain committed to corporate diversity efforts, even as external pressures mount.
Costco’s Workforce and Future Outlook
Costco, a membership-based retailer with a global workforce of more than 300,000 employees—including 219,000 in the U.S.—has consistently emphasized its commitment to inclusion. The company’s strong financial performance and customer loyalty further reinforce investor confidence in its corporate policies.
The overwhelming rejection of the anti-DEI proposal suggests that shareholders view diversity efforts as beneficial rather than a business risk. With this vote, Costco continues to align with the broader corporate trend of maintaining DEI initiatives despite increasing political opposition.
Conclusion
Costco’s decisive rejection of the proposal to assess DEI risks reflects strong investor confidence in the company’s diversity policies. As political battles over DEI continue to unfold, shareholder sentiment remains a key factor in shaping corporate strategies.
While some companies are retreating from DEI commitments, Costco’s shareholders have sent a clear message that diversity initiatives remain a valued part of its corporate framework.
