New research published Friday and shared exclusively with the Guardian found that companies that resisted pressure and kept their diversity, equity and inclusion (DEI) practices, including Costco, Apple and Delta Air Lines, performed just as well as their competitors who pulled back.
Stock performance after Trump's executive order
Jacob Grumbach, an associate professor at the University of California at Berkeley's Goldman School of Public Policy, analyzed how S&P 500 companies fared after Trump's January 2025 executive order. He used what economists define as “abnormal returns” – the difference between how a stock was expected to perform versus how it actually performed – to isolate the impact of a company's DEI decision.
He found that firms that kept their DEI policies or voted down anti-DEI shareholder resolutions did just as well financially, even after Trump's executive order, as firms that didn't. 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't.
Conservative backlash and corporate response
The “go woke, go broke” 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 transgender influencer Dylan Mulvaney. Target faced fury over its pride month merchandise. Ron DeSantis, the Florida governor, embarked on a prolonged fight with Disney after the company opposed the state's “don't say gay” bill.
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.
Mixed adjustments and findings
“That really created a lot of fear and panic in corporate America and is what led to a lot of the pullbacks around DEI,” said David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at New York University's law school. “When Trump came into office for the second time, that just poured fuel on an already raging fire.”
After Trump's executive orders, companies weighed the risks. Many quietly scrapped DEI promises made after the murder of George Floyd. Some faced a reverse backlash: the Twin Cities Pride parade dropped Target as a sponsor after the company withdrew some of its DEI policies.
Glasgow said the reality of this pullback was likely different from what was seen in the headlines. Of the many companies he spoke to, most “made adjustments to their diversity principles on account of legal and regulatory environments”. “Often what's going on is something more in the messy middle, where they're sticking with some things, deleting others and then reframing or rebranding some,” he said.
Grumbach kept track of company policies by analyzing news coverage, pulling anti-DEI shareholder proposals and tracking votes, and using data from an activist group called DEI Watch. “No matter how we measure DEI in companies, we find the same answer,” he said: holding on to DEI promises ultimately had no impact on financial performance.
Grumbach said the implications go beyond DEI and illustrate how organizations fare after resisting authoritarian policies. “What happens when you don't comply with that executive branch pressure in a moment of great fear in these civil society organizations?” he said. “This shows that large US corporations really do have leeway and the ability to sort of do noncompliance to executive branch pressure and end up fine.”
