Costco has called on shareholders to vote against moves to limit the giant retailer's diversity, equity, and inclusion (DEI) efforts after receiving proposals to crack down on “discriminatory practices.”
The National Center for Public Policy Research has asked Costco to issue a report on the risks the company may face by maintaining its current DEI policy. According to The Hill.
“It is clear that DEI poses litigation, reputational, and financial risks to our company and, therefore, to our shareholders,” the proposal states. said.
“Costco still has such a program, but they had enough concerns to realize this because they recently quietly rebranded their DEI program as 'People and Communities.' “However, adding new labels to discriminatory practices will not protect Costco and its shareholders from these risks,” the proposal continued.
In addition to stating that the renamed program still includes a “commitment to equity,” meaning “equality of outcomes, not opportunity,” the proposal also states that it would hire a “chief diversity officer” and ” “We select suppliers based on race and gender, and it appears that this is still the case.” We consider race and gender in hiring and promotions, and we still donate shareholder funds to organizations that promote discriminatory DEI policies. ”
“Costco, with its 310,000 employees, has at least 20 employees who could be victims of this type of unlawful discrimination because they are white, Asian, male, or straight,” the group said. There are likely to be millions of people.” “So even if only a small percentage of its employees sue, and only a small percentage of them win, the cost to Costco could be in the tens of billions of dollars.”
Costco said the request “simply burdens companies with challenging long-standing diversity programs.” (Related article: Appeals court agreement deals blow to Nasdaq's efforts to impose diversity rules on companies).
In a statement to investors, @Costco's board advised shareholders not to vote to end its large-scale DEI program.
Costco's DEI support stands in contrast to several major retailers that have ended discriminatory DEI programs or rebranded. pic.twitter.com/aLRBLFCCKu
— Andy Ngo 🏳️🌈 (@MrAndyNgo) December 28, 2024
“The proponent's broader agenda is not to reduce the company's risks, but to eliminate its diversity commitments,” the wholesaler said.
“Our board of directors is Taking this into considerationWe believe that our commitment to companies is rooted in respect. Costco added that its board of directors will “unanimously” recommend that shareholders vote against the proposal.
A general meeting for shareholders to vote on the issue is scheduled to be held on January 23rd.
The issue comes after companies like Walmart, Lowe's, and Harley-Davidson announced they were eliminating DEI practices following similar backlash.
