Exclusive: Companies that kept policies did just as well financially, even after Trump\u2019s executive order, as those that didn\u2019t<\/p>\n
Conservative backlash was supposed to put an end to the diversity, inclusion and equity (DEI) movement as companies were warned \u201cgo woke, go broke\u201d.<\/p>\n
In January 2025, Donald Trump delivered a death knell, ending DEI within the federal government with executive orders and threatening to target companies that still supported it. Companies including Google, Goldman Sachs, McDonald\u2019s and Walmart that had embraced DEI years earlier fell into line and announced an end to their policies.<\/p>\n
But new research published on Friday and shared exclusively with the Guardian found that companies that resisted the pressure and kept their DEI practices, including Costco, Apple and Delta Air Lines, performed just as well as their competitors who pulled back.<\/p>\n
For the research, Jacob Grumbach, an associate professor at at the University of California at Berkeley\u2019s Goldman School of Public Policy, analyzed how S&P 500 companies fared after Trump\u2019s January executive order. He used what economists define as \u201cabnormal returns\u201d \u2013 the difference between how a stock was expected to perform versus how it actually performed \u2013 to isolate the impact of a company\u2019s DEI decision.<\/p>\n
What he found was the firms that kept their DEI policies or voted down anti-DEI shareholder resolutions did just as well financially, even after Trump\u2019s executive order, as firms that didn\u2019t. In the days after the executive orders were signed, companies that kept their DEI policies actually performed better on the stock market than those that didn\u2019t.<\/p>\n
Whether or not DEI benefits a company\u2019s bottom line can depend on its consumers. Grumbach noted companies that publicly stood firm on their DEI policies might have known they could weather a political storm. Apple, for example, may have known it could maintain its DEI efforts in a way that Tractor Supply, another prominent company that pulled back its policies, could not.<\/p>\n
The \u201cgo woke, go broke\u201d movement found its power in 2023, when a series of conservative backlashes against companies gained momentum. Bud Light sales dropped following a conservative boycott after the beer company featured the transgender influencer Dylan Mulvaney. Target became an embodiment of its name after fury erupted over its pride month merchandise. Ron DeSantis, the Florida governor, embarked on a prolonged fight with Disney after the company vocally opposed the state\u2019s \u201cdon\u2019t say gay\u201d bill. \u201cCracker Barrel has fallen,\u201d a conservative group wrote after the restaurant chain celebrated pride month on social media.<\/p>\n
Then, also in 2023, the US supreme court ruled that race-conscious admissions policies in higher education were unconstitutional, opening the floodgates for legal challenges against DEI policies in other places, including the workplace.<\/p>\n
\u201cThat really created a lot of fear and panic in corporate America and is what led to a lot of the pullbacks around DEI,\u201d said David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at New York University\u2019s law school. \u201cWhen Trump came into office for the second time, that just poured fuel on an already raging fire.\u201d<\/p>\n
After Trump\u2019s executive orders, companies had to weigh the risks. Many quietly scrapped the DEI promises they had made after the murder of George Floyd and the racial reckoning it inspired. Some ended up facing a reverse backlash: the Twin Cities Pride parade dropped Target, which is based in Minneapolis, as a sponsor after the company withdrew some of its DEI policies.<\/p>\n
But the reality of this pullback was probably different from what was seen in the headlines, Glasgow said. Of the many companies he spoke to, most \u201cmade adjustments to their diversity principles on account of legal and regulatory environments\u201d.<\/p>\n
\u201cOften what\u2019s going on is something more in the messy middle, where they\u2019re sticking with some things, deleting others and then reframing or rebranding some,\u201d Glasgow said.<\/p>\n
While there was \u201cno perfect way\u201d to measure whether a firm was pulling back its DEI policies, Grumbach kept track of company policies by analyzing news coverage, pulling anti-DEI shareholder proposals and keeping track of the proposals\u2019 votes, and using data from an activist group called DEI Watch, which maintains a tracker of companies.<\/p>\n
\u201cNo matter how we measure DEI in companies, we find the same answer,\u201d he said: holding on to DEI promises ultimately had no impact on financial performance.<\/p>\n