Last year, Walmart (WMT) was in the midst of controversy after it opted to follow a growing trend in corporate America.
In December, the retail giant cut several initiatives focused on diversity, equity, and inclusion. One goal cut was Walmart ceasing its participation in the Human Rights Campaign survey, which tracks LGBTQ+ corporate policies and practices.
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The retailer also said that funding for Pride and other events would be reviewed to ensure that sexually inappropriate content directed at children isn’t being funded.
Related: Walmart cuts back controversial policies after blowback
Walmart also vowed to remove transgender products marketed to children from its stores and to discontinue its racial equity training for employees.
In addition, the retailer said it will evaluate its supplier diversity programs to ensure that they don’t provide preferential treatment and benefits to suppliers based on race and will abandon its five-year commitment to expand its Racial Equity Center.
The decision from Walmart came after companies such as Lowe’s, Harley-Davidson, Tractor Supply, etc., also cut their DEI policies earlier last year amid pressure from conservative consumers.
Walmart shareholders send stern letter to CEO about DEI cut
Now, Walmart is facing a different type of pressure; this time, it’s from its shareholders.
In a letter addressed to Walmart CEO Doug McMillon, a group of over 30 shareholders who represent $266 billion in assets urged McMillon to reverse the company’s decision to cut its DEI policies, which the shareholders label “very disheartening.”
“As Walmart shareholders, we are also concerned to see our company give into bullying and pressure from anti-DEI groups but ignore requests for addressing risks associated with racial inequity from a significant number of its shareholders in the past two proxy seasons,” said the shareholders in their letter.
When Walmart first announced that change last year, it stated that despite cutting its DEI policies, it aims to create a sense of “belonging.”
“We’ve been on a journey and know we aren’t perfect, but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone,” said a Walmart spokesperson in a statement to TheStreet in December.
Related: Walmart, Lowe’s among retailers that caved to blowback in 2024
The shareholders, however, state that the decision sends the opposite message to communities.
“Walmart has sent a clear signal to all underrepresented and marginalized groups that Walmart will not fight to protect their rights,” said the shareholders. “In a time when there are threats to the rights of the LGBTQ+ community, threats of mass deportation of migrants, in addition to potential policies that may disproportionately harm people and workers of color, who make up over half of Walmart’s workforce, and low-income communities, it is imperative for Walmart to remain committed to its stated values of fostering a sense of belonging for everyone.”
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The shareholders are asking Walmart to stand firm on its previous DEI commitment and “not succumb to political pressure.”
They are also requesting to speak with members of Walmart’s senior leadership team and board of directors to discuss its decision to cut DEI and the potential implications it can have for the company.
Major Walmart rival takes opposite approach to DEI
The move from Walmart’s shareholders came after the retailer’s rival, Costco (COST) , recently defended its DEI policies, urging its shareholders to vote against a proposal that aims to put the initiatives on the chopping block.
The National Center for Public Policy Research recently unveiled a proposal, which Costco shareholders will vote on Jan. 23. The proposal states that Costco’s DEI program should be removed as it poses “litigation, reputational and financial risks to the company.”
Costco’s board of directors fired back in a notice sent to shareholders earlier this month, stating that its DEI program is “legally appropriate” and helps the company succeed.
“Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our company the importance of creating opportunities for all,” said Costco’s board of directors in the notice. “We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”
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