State financial officers and private sector investors managing over $65 billion of assets are urging Fortune 1000 companies not to cave to Democrat pressure to continue their DEI practices, which have proven to be both socially counterproductive and financially detrimental to shareholders.
In two separate letters to Fortune 1000 firms, 17 state financial officers and more than a dozen private sector investment experts urge the companies to join the growing number of businesses abandoning DEI in order to better serve their shareholders.
Both letters refute the claims of 49 House Democrats and activists who recently wrote to the Fortune 1000 companies calling on them to “reject division” by continuing to support DEI programs, policies and initiatives.
In reality, DEI actually “divides employees from each other and fails to respect true diversity,” the investment professionals write:
“DEI also punishes dissenting views under the guise of ‘privilege,’ ‘internalized’ racism, sexism, or other ‘isms.’”
“It is neither inclusive nor American to punish employees for their race, sex, or for exercising their First Amendment freedoms,” they write, warning that companies also put themselves at serious legal risk by discriminating in the name of “diversity.”
“Customers of many brands have expressed sustained dissatisfaction” with DEI and want companies to stop promoting it, the investment professionals note.
“DEI policies and practices threaten your company’s financial health, its reputation, our nation’s economy and the civil liberties of everyday Americans,” the state financial investment officials write in their letter, expressing concern that members of Congress are calling for the Fortune 1000 companies to reaffirm their allegiance to DEI.
While Democrats claim DEI “benefits employees, customers, and the bottom line,” “significant evidence is mounting that precisely the opposite is true,” the state financial officers write, explaining that publicly-held corporations have a fiduciary responsibility to act in the best financial interest of their shareholders, not on behalf of an ideological agenda:
“You have a fiduciary duty to your shareholders to avoid policies and practices that pose risk to firm performance. DEI programs are clearly such a risk.”
The letters cite scholarly studies and news articles debunking Democrats’ claims that DEI improves company profits, promotes an inclusive culture, and is embraced by customers and employees.
In particular, the state officials note an article in The New York Times documenting how DEI policies have backfired at the University of Michigan, which The Times describes as “the largest D.E.I. bureaucracy of any big public university.”
One of the studies cited by the private sector investment managers is an Alliance Defending Freedom (ADF) survey of adults from a variety of professions, which finds that more employees say DEI divides, rather than unites, colleagues.
“The divisive and discriminatory ideology at the root of DEI has caused some of our country’s most prominent companies, like Home Depot, Lowe’s, Ford, and Toyota, to pull back on their DEI programs,” ADF Senior Counsel and Senior Vice President of Corporate Engagement Jeremy Tedesco said in a statement. “We should celebrate that and call on other companies to follow their lead.”
“Businesses should listen to their employees, customers, and shareholders - rather than politicians - and jettison DEI once and for all,” Tedesco said, denouncing the Congressional Democrats’ letter to the Fortune 1000 companies.
Read full letter from state financial officers.
Read full letter from investment professionals.