As many companies are cutting back or ending diversity initiatives, Costco's Board of Trustees is pushing back on efforts to end the company's DEI programs.
The Board urged its shareholders to vote against a proposal submitted by the National Center for Public Policy Research that called on Costco to eliminate DEI programs. The group claims that DEI programs are discriminatory and put the company at financial risk.
"It's clear that DEI holds litigation, reputational and financial risks to the Company, and therefore financial risks to shareholders," the National Center for Public Policy Research wrote in its letter of support.
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In response, Costco's Board of Trustees voted unanimously to urge shareholders to decline the proposal. Shareholders will have their say on Jan. 23.
"Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members, and suppliers," the Board wrote in response to the proposal. "Our efforts around diversity, equity and inclusion follow our code of ethics: For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all.
"We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed. This capacity is critical because we owe our success to our now over 300,000 employees around the globe."
The National Center for Public Policy Search said the Supreme Court decision reached in 2023 in SFFA v. Harvard indicated that companies' DEI programs could potentially be illegal. The Supreme Court ruled that affirmative action policies by colleges violated the equal protection clause of the 14th Amendment.
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Costco's Board countered that the group was incorrect on its belief that the company's DEI policies violate the law.
"We believe that our diversity, equity and inclusion efforts are legally appropriate, and nothing in the proposal demonstrates otherwise. As part of our obeying the law, all decisions regarding recruiting, hiring, promotion, assignment, training, termination, and other terms and conditions of employment will be made without unlawful discrimination on the basis of race, color, national origin, ancestry, sex, sexual orientation, gender identity or expression, religion, age, pregnancy disability, work-related injury, covered military or veteran status, political ideology or expression, genetic information, marital status, or other protected status," Costco's Board said in response.
