Costco (COST) , the largest and most popular warehouse club in the U.S., is standing its ground against a growing trend in corporate America.
Last year, many retailers, including Walmart, Lowe’s, Tractor Supply, etc., axed their diversity, equity and inclusion initiatives after they faced scrutiny from conservative consumers. The decision also followed the U.S. Supreme Court’s ruling in 2023 to end affirmative action in college admissions, which raised legal questions about DEI programs in workplaces nationwide.
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While large companies such as Meta, Amazon and McDonald’s also opted to scale back their DEI programs this year, Costco has decided to veer in a different direction.
Related: Costco faces boycott threats after defending controversial policy
Earlier this month, Costco’s board of directors fiercely hit back against a proposal from a group of its shareholders that aimed to end its DEI program. The program influences hiring and promotion choices, contains a supplier diversity program that “picks suppliers based on their race and sex,” and sends shareholder money to organizations that support DEI.
The shareholders claimed that the company’s DEI policies pose “litigation, reputational, and financial risks.”
In response, Costco’s board sent a notice to investors urging them to vote against the proposal in the company’s annual shareholder meeting on Jan. 23, stating that its DEI policies are “legally appropriate” and help to create “opportunities for all.”
The move from Costco caused an uproar on social media, with some consumers claiming that they would boycott the company because of its stance on DEI.
Related: Costco vs. Sam’s Club: Memberships & product prices compared
Costco faces backlash for officially shutting down controversial proposal
However, Costco just won the battle against the anti-DEI proposal as its shareholders strongly voted against it during the annual meeting. More than 98% of the company’s shareholders rejected the proposal, which requested a report on the risks associated with maintaining its DEI efforts.
Responding to the vote, some consumers took to social media platform X to express frustration with the company's choice to defend DEI.
@costco you NEED to end your crappy DEI policies immediately!!
— America First 🇻🇦 🇺🇸 🇮🇱😺 (@magaman28) January 24, 2025
Some even reignited calls to boycott Costco as a result of the shareholder vote.
Time to boycott Costco
— Glitch (@MightBeLagging) January 24, 2025
More Retail:
- Dollar Tree issues stern warning about its pricing
- Foot Locker sounds the alarm on a concerning customer behavior
- Amazon accused of concealing a major change to Prime delivery
@Costco, I'm now done with you. There is a Sam's Club everywhere there is a Costco. Better product too. https://t.co/LtDMHpdVOZ
— ReverendJim (@ReverendJim3) January 24, 2025
The move from Costco came after President Donald Trump issued an executive order on Jan. 21 that dismantled the federal government’s DEI programs. In the executive order, he claimed that the programs enforce “illegal and immoral discrimination.” He later ordered all federal DEI employees to be put on paid leave.
Costco isn't the only company to defend DEI
Costco is not the only company defending its DEI program. Earlier this week, a report from the Wall Street Journal revealed that Goldman Sachs recently received a proposal from a group of its shareholders calling on the bank to conduct an audit of its DEI policies to find racial discrimination.
Related: Goldman Sachs defends a work policy shareholders fear
The shareholders claimed that Goldman Sachs’ DEI policies could put the company in expensive legal trouble, fearing lawsuits from employees who may allege the policies are discriminatory.
In response to the proposal, which Goldman Sachs shareholders will vote on at their annual shareholder meeting this spring, a spokesperson for the bank told the Journal in a statement that the company believes that organizations can benefit from diversity in the workplace and will remain committed to its DEI policies and programs in compliance with the law.
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