Key Takeaways:

• Nineteen Republican attorneys general demand Costco end its diversity, equity, and inclusion (DEI) policies.
• Costco recently defended its DEI initiatives amidst shareholder and legal scrutiny.
• The push aligns with President Trump's recent executive orders aimed at dismantling DEI programs across the private sector.
• Over 98% of Costco shareholders voted against evaluating potential risks posed by DEI policies.

Costco is currently under intense scrutiny from a coalition of Republican attorneys general from 19 states who are urging the retailer to terminate its diversity, equity, and inclusion (DEI) policies. This group's demand follows a successful shareholder defense of Costco's commitment to DEI, where shareholders overwhelmingly rejected a proposal to evaluate the risks associated with these practices. The letter, addressed to Costco CEO Ron Vachris, criticized the company's DEI initiatives as “divisive and discriminatory” and argued that Costco should treat employees equally based on merit rather than identity factors.

The coalition, led by Iowa Attorney General Brenna Bird and Texas Attorney General Ken Paxton, requested in their letter that Costco either repeal its DEI policies within 30 days or provide an explanation for their continuation. The Attorneys General’s letter referenced recent executive orders by President Trump aimed at dismantling DEI initiatives in the federal government and cautioned the company to reevaluate its legal exposure related to these policies. These executive orders argue that DEI policies violate civil rights laws and undermine the values of hard work and individual achievement.

In contrast, Costco’s board has consistently defended its commitment to diversity, claiming that a diverse workforce is beneficial for its business operations. “Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings,” the board stated. This position was further bolstered by the overwhelming support from its shareholders, who voted 98% against the proposal from the conservative think tank National Center for Public Policy Research to investigate the risks associated with DEI practices. Following this vote, Vachris noted the positive response from shareholders emphasizes their prioritization of DEI efforts.

The push against Costco comes in the wake of several companies, including Meta, Walmart, and now Target, rolling back their diversity initiatives under pressure from conservative activists. With the political landscape shifting and increasing scrutiny on corporate DEI policies, Costco’s adherence to these programs makes it a focal point in the broader debate surrounding diversity and inclusion in the corporate sector.

As discussions on this contentious issue continue, both sides are gearing up for potential legal ramifications, with many expressing the belief that abandoning DEI policies could significantly reduce corporate liabilities. The attorneys general’s demands place increasing pressure on Costco, as they argue that adherence to the shifting political winds is necessary for compliance with legal standards.

For further details, refer to the original articles from Newsweek, CBS News, The Hill, and Business Insider.