Dive Brief:
- S&P 500 companies that maintained their diversity, equity and inclusion commitments performed as well as or better than their peers that rolled back DEI commitments in the face of political pressure, University of California, Berkeley public policy scholar Jacob Grumbach posited in a recently published report.
- Grumbach determined the health of the companies by looking at both company revenue and abnormal stock returns to measure company performance relative to the broader market trends. Both metrics indicated that organizations that retained DEI programs performed as well as or better than their competitors.
- These findings come contrary to the current corporate logic du jour, which maintains that DEI programming presents a legal risk under the current presidential administration.
Dive Insight:
“Markets Do Not Punish Firms for Maintaining DEI,” published on Aug. 14, highlighted the performance of companies such as Apple, Cisco, Costco, Delta Airlines, Dollar Tree, JPMorgan Chase, Microsoft and Pfizer, which maintained their DEI commitments — compared to companies such as Citigroup, Dollar General, IBM, Target and Walmart, which all scaled back.
Federal contractors have particularly felt the burn in 2026 following President Donald Trump’s anti-DEI executive orders. This is reflected in the data as well: 51% of federal contractors have decreased inclusion efforts, while 52% of those that don’t contract with the federal government are increasing inclusion efforts, suggested a May report by Catalyst and New York University School of Law’s Meltzer Center for Diversity, Inclusion and Belonging.
Private-sector employers have also experienced a chilling effect from the orders. Apart from anti-DEI shareholder proposals at companies like Apple and Costco, companies also faced heat from attorneys general demanding they drop DEI programming. UC Berkeley researcher Grumbach acknowledged this strain, saying in an Aug. 19 statement, “Many corporate leaders may have seen dropping DEI as a financial necessity, especially when pressured by the White House. But the data does not support that claim.”
Grumbach added, “This research shows compelling evidence that companies that kept their DEI programs in place performed at least as well financially as companies that ended DEI. Large corporations appear to have folded under pressure for no financial gain.”
The report highlighted how stock market performance between companies that cut DEI and companies that kept DEI was “indistinguishable,” with some analysis “showing slightly stronger returns” among companies that kept DEI.
In a similar vein, the Catalyst-Meltzer study suggested that 8 in 10 U.S. companies remain committed to DEI. Likewise, 77% of respondents said they had adjusted their efforts over the past three years.
“Despite a high-risk legal environment, our research shows that DEI is not dying — it is evolving,” Catalyst VP Joy Ohm said in a statement at the time. “We see a majority of organizations adjusting their strategies, so this is a story of adaptation, not a broad rollback. Even in the face of a concerted assault on the values of inclusion and fairness, many organizations remain deeply committed to this work.”
