New York
CNN
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Costco is battling an anti-DEI wave with a stern rebuke to activist shareholders looking to end the warehouse retailer’s diversity ambitions.
Walmart, John Deere, Tractor Supply and other companies are changing or walking away from diversity, equity and inclusion (DEI) policies. But Costco believes DEI helps its “treasure hunt” shopping atmosphere, and it is standing behind its efforts.
Costco’s board of directors unanimously recommended that its shareholders vote against a proposal brought by a conservative think tank, the National Center for Public Policy Research, that would require Costco to evaluate and issue a report on the financial risks of maintaining its diversity and inclusion goals. The group criticized Costco for possible “illegal discrimination” against employees who are “white, Asian, male or straight.”
The National Center for Public Policy Research did not immediately respond to CNN’s request for comment.
Costco has a chief diversity officer and a supplier program that focuses on expanding with small and diverse businesses. It also donates to organizations like the Thurgood Marshall College Fund that serve minorities and underrepresented groups.
Costco said its DEI efforts help the company attract and retain a wide range of employees and improve merchandise and services in stores. Costco also said its members want to interact with a diverse employee base.
“Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings, promoting the ‘treasure hunt’ that our customers value,” Costco said in its proxy statement to investors. “We believe (and member feedback shows) that many of our members like to see themselves reflected in the people in our warehouses with whom they interact.”
The board went further in its recommendation to vote against the proposal, saying the think tank is masking its true anti-diversity agenda under the guise of reducing risk. Costco said the NCPPR is inflicting burdens on companies with challenges to DEI and the organization’s broader agenda is to abolish diversity initiatives.
“The proponent professes concern about legal and financial risks to the company and its shareholders associated with the diversity initiatives,” the company said. “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.”
Costco released its proxy earlier this month, but the statement gained attention on social media this week.
There’s no single definition of DEI, but it’s generally a mix of employee training, employee resource networks and recruiting practices to advance representation of people of different races, genders and classes, people with disabilities, veterans and others.
The shareholder resolution contends that Costco’s DEI practices are potentially discriminatory. But Costco said its policies are legal and non-discriminatory.
Costco, which pays some of the highest wages in retail and is considered a progressive employer, is backing DEI at a moment when such initiatives are under attack from right-wing activists, legal groups, conservative customers and President-elect Donald Trump’s incoming administration.
Most companies are not abandoning DEI entirely, but some are modifying terminology from “DEI” to “inclusion” or “belonging” in an attempt to fend off pressure. Companies are also advertising their efforts less prominently than they were in 2020 and 2021.