Costco defends DEI program as other major retailers drop controversial diversity push

Core Viewpoint - Costco's board of directors is urging shareholders to vote against a proposal aimed at eliminating the company's diversity, equity, and inclusion (DEI) program, emphasizing that these efforts are integral to their success and ethical standards [1][3]. Summary by Sections Company Position on DEI - The board asserts that their DEI initiatives are essential for attracting and retaining employees, which is critical for the company's success, supported by a workforce of over 300,000 employees globally [1][3]. - Costco's DEI program has been rebranded to "People and Communities," but the board maintains that their commitment to diversity and inclusion remains strong despite external pressures [3][5]. Shareholder Proposal - The proposal from the National Center for Public Policy Research challenges the legality of Costco's DEI program, citing the Supreme Court's ruling in SFFA v. Harvard, which impacts corporate DEI initiatives [1][4]. - The foundation argues that Costco's DEI practices could lead to potential legal risks, claiming that a significant portion of its workforce could be victims of illegal discrimination based on race and sex [3][5]. Legal and Financial Implications - The board contends that the DEI practices are legally appropriate and that the proposal reflects a policy bias rather than a genuine concern for the company's risk management [3][5]. - The potential financial impact of lawsuits related to DEI practices could amount to tens of billions of dollars, according to the proposal, if even a fraction of affected employees were to file claims [3][5].