Last year, Walmart (WMT) was in the midst of controversy after it chose to follow a growing trend in corporate America.
In December, the retail giant scaled back several initiatives focused on diversity, equity and inclusion. One goal cut was for Walmart to stop participating in the Human Rights Campaign survey, which tracks LGBTQ+ corporate policies and practices.
Don't miss the move: subscribe to TheStreet's free daily newsletter
The retailer also said funding for Pride and other events would be reviewed to ensure sexually inappropriate content aimed at children is not funded.
Related: Walmart cuts controversial policies after pushback
Walmart also promised to remove transgender products marketed to children from its stores and discontinue racial equity training for its employees.
Additionally, the retailer said it will evaluate its supplier diversity programs to ensure they do not provide preferential treatment and benefits to suppliers based on race and will abandon its five-year commitment to expand its Racial Equity Center.
Walmart's decision came after companies such as Lowe's, Harley-Davidson, Tractor Supply, etc. They also cut their DEI policies early last year amid pressure from conservative consumers.
Walmart shareholders send stern letter to CEO over DEI cut
Now Walmart faces a different kind of pressure; This time, it is its shareholders.
In a letter to Walmart CEO Doug McMillon, a group of more than 30 shareholders who, as a group, manage $266 billion in assets, urged McMillon to reverse the company's decision to cut its DEI policies, which shareholders describe as “very discouraging.”
“As Walmart shareholders, we are also concerned to see our company bow to intimidation and pressure from anti-DEI groups, but ignore requests to address the risks associated with racial inequality from a significant number of its shareholders in the last two representation seasons,” the shareholders said in their letter. The letter was signed by Caroline Boden, Director of Shareholder Advocacy for Mercy Investment Services Inc.
When Walmart first announced that change last year, it stated that despite cutting its DEI policies, its goal is to create a sense of “belonging.”
“We have traveled a path and we know that we are not perfect, but each decision arises from wanting to foster a sense of belonging, open doors to opportunities for all our associates, customers and suppliers and be a Walmart. for everyone,” a Walmart spokesperson said in a statement to TheStreet in December.
Related: Walmart and Lowe's among retailers bowing to pullback in 2024
Shareholders, however, say 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,” the shareholders said. “At a time when there are threats to the rights of the LGBTQ+ community, threats of mass deportation of migrants, as well as potential policies that could disproportionately harm people and workers of color, who make up more than half of the workforce “Walmart, and low-income communities, it is imperative that Walmart remains committed to its stated values of fostering a sense of belonging for all.”
More retail:
- Dollar Tree issues stern price warning
- Foot Locker Sounds Alarm Over Worrying Customer Behavior
- amazon accused of hiding major change to Prime delivery
Shareholders are calling on Walmart to stand firm on its past commitment to DEI and “not succumb to political pressure.”
They are also asking to speak with members of Walmart's senior leadership team and board of directors to discuss their decision to cut DEI and the potential implications it may have for the company.
Walmart's main rival takes opposite approach to DEI
The move by Walmart shareholders came after the retailer's rival, Costco. (COST) recently defended its DEI policies, urging its shareholders to vote against a proposal that seeks to put the initiatives on the chopping block.
The National Center for Public Policy Research recently released a proposal, which Costco shareholders will vote on at the company's annual meeting on January 23. The proposal states that Costco's DEI program should be eliminated as it poses “financial, reputational, and litigation risks to the company.”
Costco's board of directors responded in a notice sent to shareholders earlier this month, stating that its DEI program is “legally appropriate” and helps the company succeed.
“Our diversity, equity and inclusion efforts remind and reinforce to everyone at our company the importance of creating opportunities for all,” Costco's board of directors said in the notice. “We believe these efforts enhance our ability to attract and retain employees who will help our business succeed.”
Related: Veteran Fund Manager Issues Dire S&P 500 Warning for 2025
