Costco Wholesale, a global retail giant, has urged its shareholders to vote against a proposal to abolish its diversity, equity, and inclusion (DEI) initiatives. The proposal, brought forward by the National Center for Public Policy, claims that DEI programs promote discriminatory practices and pose legal and financial risks to the company.
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The Debate: DEI Under Fire
The National Center for Public Policy, a conservative think tank, argues that DEI initiatives discriminate against employees based on race, gender, or sexual orientation. “With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of illegal discrimination because they are white, Asian, male, or straight,” the think tank stated in its proposal.
This criticism comes as several major companies, including Tractor Supply Co., Harley Davidson, and Lowes, have recently repealed DEI policies due to similar backlash. Universities like MIT, Harvard, and the University of Michigan have also stopped requiring DEI statements for hiring and promotions, signaling a broader shift in the public and private sectors.
Costco’s Defense of DEI Programs
In response, Costco’s board has firmly rejected the proposal, emphasizing the value of DEI to its business model and employee culture.
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“Diversity brings originality and creativity to our merchandise offerings, which aligns with the ‘treasure hunt’ experience our customers love,” the company stated in a proxy document released on Dec. 26. Costco also highlighted that many members appreciate seeing diversity among employees in their stores, reinforcing the company’s commitment to inclusion.
Costco’s leadership stressed that DEI policies are essential for attracting and retaining talent, fostering an inclusive environment, and driving business success. “For our employees, these efforts are built around inclusion—having all of our employees feel valued and respected,” the company explained.
Critics Call for Nationwide Ban on DEI
The DEI debate has become a flashpoint in U.S. politics, particularly among Republicans. Vice President-elect JD Vance has been a vocal critic, labeling DEI as “racism, plain and simple.” In June, Vance called for a nationwide ban on DEI initiatives, starting with the federal government.
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Do DEI Programs Work?
Critics of DEI often point to studies suggesting that such programs may inadvertently increase prejudice within organizations. A report by Canadian professor David Haskell for the Aristotle Foundation for Public Policy found that diversity workshops often promote divisive claims and foster hostility toward dissenting viewpoints.
“A growing number of high-profile cases suggest that diversity workshops and their supporting materials regularly promote questionable claims—particularly about the overarching, malicious character of the majority population,” Haskell noted.
Costco’s Long-Term Vision
Despite the criticism, Costco remains steadfast in its commitment to DEI, arguing that these initiatives are vital for long-term success. “We owe our success to our now over 300,000 employees around the globe,” the company stated.
Costco also accused the National Center for Public Policy of pursuing a broader agenda rather than genuinely seeking to reduce risk for the company. “This proposal is not about reducing risk but about the abolition of diversity initiatives,” the board argued.
What’s Next?
The shareholders’ decision will determine whether Costco’s DEI policies remain intact or face the same fate as those of other corporations. As the debate over DEI continues to polarize the business and political landscape, Costco’s stance could set a precedent for other companies navigating similar challenges.
