Walmart Shareholders Urge CEO McMillon to Reconsider Retreat on DEI
Long-term investors cite the company’s capitulation to bullying from anti-DEI groups as contradictory to its stated mission to “foster a sense of belonging… and to be a Walmart for everyone.”
NEW YORK, NY, WEDNESDAY, JANUARY 15, 2024 – Long-term Walmart shareholders who have been engaging the company for decades to promote stronger policies to manage its environmental and social risks today announced that they had sent a letter to CEO Doug McMillon to register their deep disappointment regarding its recent announcement that the company intends to dismantle many of its Diversity, Equity, and Inclusion (DEI) initiatives and commitments.
The shareholders, many of them religious investors, have been engaging Walmart consistently for three decades and as recently as the last two years around material risks related to systemic racism, discrimination, and inequity in its workforce via direct dialogue and shareholder proposals. They voiced concern that, after years of making progress on many of these issues and implementing policies to counter discrimination and foster more inclusiveness, the company appeared to abruptly abandon these efforts in the face of threats from anti-DEI politicians and activists.
Said Caroline Boden of Mercy Investment Services, principal author of the letter and one of its 31 signatories, “From both a moral and a financial perspective, it is extremely disappointing to see Walmart roll back its commitment to advancing DEI within its workforce and operations. DEI initiatives aren’t just ‘nice to have’, they are essential to breaking down the systemic inequities hindering our economy and preventing society from fully thriving. Inequity is bad for business and, ultimately, investors.”
According to the letter, “Walmart has sent a clear signal to all underrepresented and marginalized groups that Walmart will not fight to protect their rights. In a time when there are threats to the rights of the LGBTQ+ community1, threats of mass deportation of migrants2, in addition to potential policies that may disproportionately harm people and workers of color3,4, 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.”
Walmart is perhaps the largest company to fall victim to a multi-pronged pressure campaign against corporate DEI initiatives led by conservative politicians, think tanks, and online talk show hosts. Companies such as Caterpillar, Toyota, John Deere, and Harley-Davidson have walked back DEI statements and commitments in response to direct threats of boycotts and potential legal action from these groups. However, despite the very public nature of a relatively small number of corporate retreats, the vast majority of U.S. public companies have remained steadfast in their DEI programs and policies, with companies such as Costco and Apple pushing back forcefully on any anti-DEI actions.5
In its letter to shareholders from its proxy statement Costco lauded its DEI programs saying:
“As our membership diversifies, we believe that serving it with a diverse group of employees enhances satisfaction. Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings, promoting the ‘treasure hunt’ that our customers value. That group also helps to provide insights into the tastes and preferences of our members. And we believe (and member feedback shows) that many of our members like to see themselves reflected in the people in our warehouses with whom they interact.”
In their letter, the shareholders noted Walmart’s earlier commitments to building a more diverse and inclusive company and workforce, including a statement in its 2024 10K report6 to advance “belonging, diversity, equity and inclusion” as one of four priority ESG issues that “offer the greatest potential for Walmart to create shared value”.
“It’s worrying for shareholders because management appears to be swayed by threats from internet trolls who are already crowing about their success,” said Kevin Thomas, CEO of SHARE, a signatory to the letter. “That just emboldens others to do more of the same. So, what other value-creating initiatives will management be willing to give up because of online bullying?”
Said Rev. Seamus Finn of the Missionary Oblates of Mary Immaculate, another signatory, “Walmart’s power and influence cannot be overstated. As the largest private employer in the U.S. with an enormous list of suppliers worldwide, Walmart’s actions on so many issues of societal importance will be widely scrutinized and emulated by other companies for years to come. It is well-documented that robust DEI policies make for stronger companies by fostering more creative boards and more resilient workforces and supply chains. We will ask CEO McMillon and the Walmart board how they wish to be remembered: as a principled voice of moral and ethical business practices and an upholder of civil rights, or the cowed voice of submission and complicity with bullies dealing in intolerance and hate.”
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on LinkedIn, Bsky and X.
- https://www.hrw.org/news/2024/11/19/interview-trump-poses-more-threats-rights-lgbt-people ↩︎
- https://abcnews.go.com/Politics/trump-confirms-plan-declare-national-emergency-military-mass/story?id=115963448 ↩︎
- https://tminstituteldf.org/what-project-2025-means-for-black-communities/ ↩︎
- https://www.cbcfinc.org/blog/black-americans-sound-the-alarm-on-project-2025/ ↩︎
- https://www.cnn.com/2024/12/27/business/costco-dei/index.html ↩︎
- https://d18rn0p25nwr6d.cloudfront.net/CIK-0000104169/b9745621-712b-43d0-b8e9-5cf33db255e3.pdf (page 12) ↩︎
