Study Finds Firms Maintaining DEI Fared as Well As Those Yielding to Trump Pressure
A University of California, Berkeley analysis shows that large companies that kept diversity policies during the Trump administration performed on par with, or better than, peers that relaxed those policies.
A new study by UC-Berkeley public-policy scholar Jacob Grumbach evaluated the financial outcomes of S&P 500 companies that either weakened or eliminated diversity, equity and inclusion (DEI) policies under pressure from the Trump administration. Firms such as Citigroup, Dollar General and Walmart were contrasted with businesses like Costco, Delta, Microsoft, JPMorganChase, Apple and others that maintained or later restored DEI practices.
Accounting of revenue and abnormal stock returns revealed that the resistant firms performed at least as well as, and sometimes better than, the compliant ones. The research found that consumers did not broadly punish firms for keeping DEI, and the executive branch did not impose additional regulatory retaliation. Additional reports note that major clients have moved legal work toward firms that opposed Trump’s demands, while companies that capitulated faced boycotts that hurt stock values, as seen with Target and Walmart. The findings imply that fears of financial retaliation for defying political pressure may be overstated for large corporations.
Why it matters
It shows that standing by inclusive policies does not harm, and may even help, a company's financial performance.
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