An activist group of shareholders backed by a right-wing think tank are trying to pressure the bulk wholesaler club store Costco into dropping its diversity, equity and inclusion policies — but the company is pushing back — hard, reported CNN on Friday.
According to the report, Costco's board of directors "unanimously recommended that its shareholders vote against a proposal brought by a conservative think tank, the National Center for Public Policy Research, that would require Costco to evaluate and issue a report on the financial risks of maintaining its diversity and inclusion goals. The group criticized Costco for possible 'illegal discrimination' against employees who are 'white, Asian, male or straight.'"
However, Costco's board noted that its diversity policies improved sales — and accused the think tank of disguising a culture war battle as a risk management policy.
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“Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings, promoting the ‘treasure hunt’ that our customers value,” said Costco. “We believe (and member feedback shows) that many of our members like to see themselves reflected in the people in our warehouses with whom they interact.”
Furthermore, the statement continued, “The supporting statement demonstrates that it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs. The proponent’s broader agenda is not reducing risk for the company but abolition of diversity initiatives.”
DEI is a broad range of policies around training, employee resources, and hiring intended to both boost representation of overlooked races, ethnicities, and disabilities, and make employees in those groups more comfortable contributing. Costco's DEI program includes a "diversity officer" and "a supplier program that focuses on expanding with small and diverse businesses," according to the report.
These programs have generated backlash from right-wing activists, legal challengers, and some consumers, fueled in part by a recent study suggesting some DEI programs increase workplace hostility. Companies such as Walmart, John Deere, and Tractor Supply have modified or reversed their programs in response to the tension.