Walmart (WMT) is in trouble. More than 30 shareholders, representing $266 billion in assets, are demanding responses over the company's rollback in diversity, equity and inclusion (DEI) efforts.
In a letter to CEO Doug McMillion, investors accused Walmart of bowing to pressure from anti-DEI groups — a move that shareholders who focus primarily on faith and values said was “extremely frustrating ". They requested a meeting with the company's senior leadership and board of directors to discuss the shift in policy. The organization said it has been raising concerns about the risks of discrimination and inequality for more than 30 years.
The letter, published on January 14, stated that Walmart provided no financial or business justification for the policy change. Additionally, investors emphasized that they have shared data showing the economic benefits of promoting DEI.
In November, Walmart announced it would no longer consider race and gender when awarding supplier contracts and would not collect demographic information when determining financing eligibility.
At the time, Walmart described itself as being on a "journey," and while it wasn't "perfect," the company strived to "make every decision from the perspective of wanting to foster a sense of belonging." Conservative influencer Robby Starbuck took credit for Walmart's decision, claiming he initially planned to work with the company after producing a story about "wokeness."
The letter to Walmart, which includes organizations such as Amalan Bank (AMAL) and the United Church Fund, comes amid rising activism from religious shareholders across the political spectrum. While similar initiatives at other companies continue to flourish, anti-DEI groups continue to push for a reduction in such programs.
Additionally, the timing of this policy shift is noteworthy. Investors pointed out that as the rights of marginalized groups such as LGBTQ+ people and workers of color are increasingly threatened, Walmart's decision to reverse course sends a clear signal that the company "will not fight to protect their rights." ".
According to the 2023 Culture, Diversity, Equity & Inclusion Report, Walmart is the largest private employer of women, Black and African Americans, Hispanics and Latinos, and people of color in the United States.
The company's decision comes as other large companies are rethinking their DEI strategies, often in response to similar pressure from conservative groups. Companies like Google, Meta, Microsoft, Zoom and McDonald's have all scaled back or re-evaluated their DEI goals, raising broader questions about the long-term impact of corporate responsibility and diversity initiatives.
Costco is an outlier in this broader shift. The retailer has stood by its DEI principles despite facing strong opposition from conservative groups, who argue that its DEI programs are discriminatory and could expose the company to legal and financial risks.
Costco (COST) is currently at odds with the National Center for Public Policy Research, a conservative think tank urging shareholders to reject Costco's DEI plans. Critics point to recent legal developments, including a Supreme Court ruling on race-based admissions in higher education, as reasons for their opposition.
But Costco stands by its recent stance on DEI. The company believes a diverse workforce is good for business, inspires creativity and enhances its competitive advantage in the U.S. retail market.
Earlier this week, Walmart announced an updated, modern logo that it said will reflect its "evolution" as a retailer powered by people and technology.
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