Costco boldly defies Donald Trump's executive order

Costco and its shareholders have has defied President Donald Trump and conservative activists by sticking to DEI policies.

At the company's annual meeting, they voted strongly against a proposal from a conservative activist group that challenged diversity, equity and inclusion policies at Costco.

The vote was seen as an early test of investor views about the value of corporate DEI programs, which many companies added or beefed up starting in 2020 amid the Black Lives Matter movement. 

President Trump has already  introduced anti-DEI initiatives, claiming they are unfair and distracting. Ahead of him being voted in, US companies like Ford and John Deere had already rowed back on DEI policies. 

'I think there is a definite anti-white feeling in this country and that can't be allowed,' Trump said last summer in an interview with Time. 

Meanwhile, vocal figures on social media, like Robby Starbuck, have also pushed for boycotts of so-called 'woke' companies.  It has forced the likes of John Deere, Walmart and Ford to scale back or ditch their commitments.

Costco, however, is standing its ground. The company's board had urged investors to reject an investigation into whether if DEI policies harmed the retailer, for example by forcing it to overlook the best candidates.

More than 98 percent of the shareholders voted against it on Thursday. 

Lindsey Stewart, director of stewardship research and policy for Morningstar Sustainalytics, said the similar result at Costco 'suggests that even if the political environment on inclusion in the workplace is changing, investors' low propensity to support anti-DEI resolutions is thus far unchanged.'    

Ahead of the vote, retail expert Neil saunders told DailyMail.com that Costco takes the view that its various programs have helped it to build a strong business.

'Given the positive results over recent years it is impossible to argue that Costco management doesn't know what it's doing,' Saunders, of Global Data, said. 

'There is an element of them saying leave us to get on with the job. While some customers might dislike the policy, I doubt many will defect as it is not something that is visible or that directly impacts shoppers.'

The proposal voted down Costco's shareholder meeting was from the National Center for Public Policy Research.

The conservative activist group was pressuring Costo to produce a report outlining the potential risks of its DEI initiatives - as it says they backfire and hit the stock price.

In its shareholder proposal, the group stated, 'DEI clearly poses litigation, reputational, and financial risks to the company.' 

All businesses have a duty to avoid practices that harm their share price - since it harms investors. 

But Costco's directors argued that DEI policies are an asset, not a liability.

Executives emphasized that a diverse workforce and supplier base help attract top talent, foster innovation, and enhance the 'treasure hunt' shopping experience that customers value. 

Costco also argued that the conservative group bringing the motion have ulterior motives other than DEI risks to share price.

The retailer also said its customers enjoy seeing diversity reflected in its workforce. 

Costco is banking on its status as a much-loved store with loyal customers that have helped it stay out of political frays in the past.

'They are not the worst of the worst, so they weren't my focus,' Starbuck, who successfully pressured Walmart to reverse some of its DEI policies, has said of Costco.

'You better have your ducks in a row before you go after a beloved company,' he said of any future boycott initiatives against Costco.

Retail expert Neil saunders told DailyMail.com that Costco takes the view that its various programs have helped it to build a strong business.

'Given the positive results over recent years it is impossible to argue that Costco management doesn't know what it's doing,' Saunders, of Global Data, said. 

'There is an element of them saying leave us to get on with the job. While some customers might dislike the policy, I doubt many will defect as it is not something that is visible or that directly impacts shoppers.'

It comes after major companies such as Walmart, Ford, John Deere, and Tractor Supply bowed to pressure and rowed back on their DEI commitments. 

In July, John Deere made a huge U-turn on its DEI practices in the face of opposition and a damaging boycott from farmers and conservatives. 

The company said in a statement it would drop 'socially motivated messaging' and 'diversity quotas and pronoun identification' and distance itself from 'cultural awareness parades.'

The $61 billion-a-year firm had come under fire over sponsoring a Pride event for children as young as three and other DEI efforts, even as it shuttered plants and sacked American workers.