Over 98 percent of Costco shareholders have voted against an anti-DEI proposal from a conservative think tank that asked the retail giant to report on the risks posed by diversity, equity, and inclusion efforts.
Thursday night’s vote comes hours after Costco’s board of directors voted unanimously to ask shareholders to reject the proposal submitted by the National Center for Public Policy Research. The think tank argues that the company’s DEI initiatives pose “litigation, reputational and financial risks to the company, and therefore financial risks to shareholders.”
While several corporate brands such as McDonald’s and John Deere have distanced themselves from the DEI ideology in recent weeks and months, Costco doubled down on its commitment to maintaining diversity and inclusion, which the think tank asserts actually involves illegal discrimination.
“We have always been purposefully non-political and a welcoming workforce has been integral to the company’s culture and values since its founding,” Costco board chairman Tony James said, insisting its DEI programs are “consistent with the company’s values and code of ethics.”
The National Center cited the Supreme Court’s 2023 ruling on affirmative action that banned the use of discriminatory race-based admissions in higher education. Conservative-led lawsuits have tried extending that ruling to corporate DEI programs, arguing they are unconstitutional.
Costco’s board of directors defended its DEI efforts last month in response to the anti-DEI proposal.
“And yet Costco still has such a program, though it was apprehensive enough to recognize this as it recently and quietly rebranded its DEI program to ‘People and Communities,'” the proposal reads. “But sticking a new label on discriminatory practices does not protect Costco and its shareholders from these risks.”
Despite Costco’s rebranding, the proposal says the DEI program still employs a chief diversity officer and still uses a supplier diversity program that includes suppliers from historically underrepresented groups, among other initiatives.
“All of these practices are staples of corporate DEI programs and are consistent with Costco’s DEI program prior to its rebranding,” the document states.
The think tank, based in Washington, D.C., estimates that at least 200,000 employees of Costco’s total 310,000 workers are subject to discrimination based on their race or sex. If a small number of those potential victims who are “white, Asian, male, or straight” filed lawsuits, the proposal says, “the cost to Costco could be tens of billions of dollars.”
The National Center intends to submit a similar anti-DEI shareholder proposal to Apple at its upcoming annual shareholder meeting on February 25. Like Costco, Apple advised its shareholders to reject the proposal.
“We are disappointed by the result but also not surprised, given the forces aligned against us. These forces include conflicted asset managers and proxy advisers that profit from ESG and DEI,” Stefan Padfield, executive director of National Center’s Free Enterprise Project, told National Review.
“Fortunately, the truth about DEI is being exposed as never before,” he said, “and it is only a matter of time until DEI’s inherent shareholder-value-destroying nature forces even managers like those at Costco to get back to neutral and focus on creating value by providing great products and services rather than engaging in neo-Marxist and neo-racist social engineering projects.”
While the Costco shareholders’ support for DEI appears overwhelming, a corporate relations analyst believes the vote was predetermined by proxy advisory firms.
“It would be ignorant of reality to treat Costco’s rejection of National Center’s proposal as a sign that all is well in the DEI world. The fact is, the majority of votes cast in reference to any shareholder resolution are done so by the recommendations of proxy advisers, virtually all of which do not support efforts like NCPPR’s to depolicitize companies,” Isaac Willour of Bowyer Research told NR.
“DEI advocates would like you to believe that the Costco vote was the product of individual shareholders, truly invested in keeping the company’s diversity initiatives, personally voting en masse to keep DEI,” he said. “The reality is that most of the ‘against’ votes on this proposal (and most shareholder proposals) were determined by the will of a proxy adviser, not majority shareholder opinion.”
The vote rejecting the proposal comes in the same week that President Donald Trump signed a sweeping executive order to end DEI policies in the federal government and affirmative action in federal contracting. All federal employees in DEI roles and offices were placed on paid administrative leave by Wednesday, and federal agencies are required to report on steps taken to deter DEI programs.
Trump has also vowed to root out DEI within corporate America. If companies continue maintaining their DEI policies, they could face civil rights investigations spearheaded by the new administration.