Costco is pushing back hard against the anti-DEI movement. It gets noticed

New York
CNN
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Costco is fighting an anti-DEI wave with a stern rebuke of activist shareholders who want to end the retailer’s diversity ambitions.

Walmart, John Deere, Tractor Supply and other companies are changing or moving away from diversity, equity and inclusion (DEI) policies. But Costco believes DEI helps their “treasure hunt” shopping atmosphere, and it stands behind its efforts.

Costco’s board of directors unanimously recommended its shareholders vote against a proposal 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 diverse workforce 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 and promote the ‘treasure hunt’ that our customers value,” Costco said in its proxy declaration 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 burdens companies with challenges to the DEI, and the organization’s broader agenda is to scrap diversity initiatives.

“The proponent expresses concern about legal and financial risks to the company and its shareholders related to the diversity initiatives,” the company said. “The supporting opinion shows that it is the proponent and others who are responsible for burdening companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not to reduce risk to the company, but to abolish diversity initiatives.”

Costco released its proxy earlier this month, but the statement got attention on social media this week.

There is no single definition of DEI, but it is generally a mix of employee training, employee resource networks, and recruitment practices to promote the representation of people of different races, genders, and classes, people with disabilities, veterans, and others.

The shareholder resolution alleges 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 time when such initiatives are under attack from right-wing activists, legal groups, conservative customers and the incoming administration of President-elect Donald Trump.

Most companies are not abandoning DEI entirely, but some are changing the 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.