(Reuters) – Costco Wholesale (NASDAQ:) shareholders voted against a proposal requesting a report on the risks of maintaining diversity and inclusion initiatives, the U.S. company said on Thursday, against the backdrop of intense scrutiny of such policies.
The vote was seen as an early test of investors' views on the value of corporate diversity, equity and inclusion (DEI) programs, which many companies added or strengthened starting in 2020 amid the Black Lives Matter movement.
Costco said more than 98% of shareholders voted against it at the annual meeting.
Last year, shareholder resolutions aimed at addressing DEI programs and other corporate social considerations received less than 2% support on average.
US President Donald Trump issued an executive order directing government agency heads to dismantle DEI policies at federal agencies, federal contractors, and in the private sector.
He also noted that some companies would face investigations and legal action if their programs were deemed discriminatory.
The proposal from the National Center for Public Policy Research, which describes itself as a free-market think tank, would have asked Costco to evaluate potential business risks related to its DEI policies.
The group stressed that such efforts could pose legal, financial and reputational risks, which could affect shareholder returns.
Costco's board, which urged a vote against the proposal, said the report would not provide “additional useful information” to shareholders.
Companies like Meta Platforms (NASDAQ:), Amazon.com (NASDAQ:), JPMorgan Chase (NYSE:) and Boeing (NYSE:) have modified their initiatives, eliminated their DEI targets or ended participation in the Human Rights Campaign Foundation's corporate equity. index.
The membership-only retailer has more than 300,000 employees globally and about 219,000 in the United States, according to its 2024 annual report.
