No financial loss for S&P 500 companies that held the line on DEI, finds study
Companies that maintained diversity, equity and inclusion (DEI) policies despite political pressure performed no worse financially than competitors that scrapped theirs, according to new research.
Jacob Grumbach, an associate professor at the University of California at Berkeley's Goldman School of Public Policy, analyzed S&P 500 companies following US President Donald Trump's January 2025 executive orders ending federal DEI programs, The Guardian reported. Grumbach used "abnormal returns" – the difference between a stock's expected and actual performance – to isolate the market impact of each firm's DEI decision.
Companies that kept their DEI policies in place, or whose shareholders voted down anti-DEI resolutions, performed as well financially as those that pulled back, the analysis found. In the days immediately following the executive orders, firms that held firm on DEI outperformed those that reversed course, according to The Guardian.
Grumbach cross-referenced news coverage, shareholder proposal votes and data from DEI Watch, an activist tracking group, to reach his conclusions. "No matter how we measure DEI in companies, we find the same answer," Grumbach said, adding that retaining DEI commitments had no measurable effect on financial performance.
Firms diverged sharply on public response
Costco, Apple and Delta Air Lines were named as companies that maintained their DEI commitments through the period in the research reported by The Guardian.
Google, Goldman Sachs, McDonald's and Walmart were cited as firms that reversed policies they had adopted years earlier.
David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at New York University's law school, said the public rollback narrative may obscure more nuanced internal decisions. Most companies he advised "made adjustments to their diversity principles on account of legal and regulatory environments," he said, rather than eliminating commitments outright.
Glasgow described many corporate responses as landing in "the messy middle, where they're sticking with some things, deleting others and then reframing or rebranding some." He linked the pullback to 2023 boycotts against Bud Light and Target, plus a US Supreme Court ruling against race-conscious university admissions, which he said "created a lot of fear and panic in corporate America" before intensifying under Trump's second term.
Why is DEI important?
Here are some reasons employers should put focus on DEI, according to different studies:
|
Key Finding |
Details |
Source |
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Ethnic and gender diversity linked to profitability |
Firms with ethnic diversity in the top quartile are 36% more likely to outperform on profitability, and firms with gender diversity in the top quartile are 25% more likely to outperform |
McKinsey & Company, Diversity Wins: How Inclusion Matters, 2020 |
|
Diversity influences where people apply |
76% of job seekers say they consider a company's workforce diversity when evaluating whether to apply |
Glassdoor, Diversity & Inclusion Workplace Survey, 2020 |
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Perceived bias drives intent to leave |
Between 50% and 69% of people of colour who perceive or anticipate workplace bias say they intend to leave their jobs |
Catalyst, Getting Real About Inclusive Leadership, 2019 |
|
Demographic shifts raise the stakes for employers |
Between 2016 and 2036, the share of Canadian workers who are immigrants is projected to rise from one in four to one in three |
Statistics Canada, cited in CCDI toolkit, 2022 |
|
Business case persists despite political pressure |
The underlying business case for DEI remains relevant even as corporate DEI efforts face growing political, social, and legal challenges in the US |
The Conference Board of Canada, DEI Under Pressure, 2024 |
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Companies that kept DEI policies avoided financial penalty |
Companies that maintained DEI policies, or whose shareholders voted down anti-DEI resolutions, performed no worse financially than competitors that scaled back, even after Trump's 2025 executive orders |
Jacob Grumbach, University of California, Berkeley, reported in The Guardian, August 14, 2026 |
In late 2025, the U.S. Equal Employment Opportunity Commission (EEOC) – the U.S.’s largest enforcer of worker anti-discrimination rights – announced that DEI-driven initiatives in workplaces are “unlawful”.
