DEI policies brought no financial penalty for companies that kept them, study finds
Keeping DEI Programs Cost Companies Nothing, New Research Shows
Wertynews.com – A fresh academic analysis concludes that American corporations which retained their diversity, equity, and inclusion initiatives during the second Trump administration suffered no measurable financial harm. The paper, titled "Markets Do Not Punish Firms for Maintaining DEI," was co-authored by Jacob Grumbach, an associate professor at UC Berkeley's Goldman School of Public Policy, and examines how S&P 500 firms fared in the stock market and at the revenue level before and after President Trump issued Executive Order 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," in January 2025.
Grumbach told CBS News that companies holding onto their DEI frameworks posted stock-market returns and revenue trajectories indistinguishable from those of peers that dismantled their diversity programs.
Two Groups, One Metric
The researchers split the sample into firms that maintained DEI operations and those that scaled them back. Among the former were major retailers and technology names such as Apple, Costco, Delta Air Lines, and Dollar Tree, none of which altered its diversity policies despite sustained pressure from the administration. On the opposite side sat companies like Target and Walmart, which moved to curtail their DEI activities.
To compare the two cohorts, the team tracked each firm's "abnormal performance" — the gap between its expected share return and what actually occurred. The result: no statistically meaningful divergence between the groups. Revenue data, examined as a proxy for consumer sentiment, likewise showed no detectable gap.
"U.S. firms have a lot of leeway" to resist pressure to cut such programs, Grumbach said.
The Case for Caution
Even so, Grumbach acknowledged that executives who chose to step away from diversity initiatives had rational economic reasons to do so. A publicly traded company operating at odds with an executive order could, in theory, face less favorable treatment from the executive branch, a stalled merger or acquisition at the Federal Trade Commission, or an aggressive tax audit.
"The fear was legitimate. At this time, there was a lot of uncertainty about how the executive order would be enforced," he said.
He also noted a second channel: the order itself might have nudged public opinion away from DEI, creating a demand-side headwind for firms that kept their programs.
What Shoppers Actually Did
The revenue evidence indicates that a large share of American consumers continued buying from companies that upheld practices designed to uplift marginalized groups. Exceptions existed, however. Bud Light's 2023 partnership with transgender social-media figure Dylan Mulvaney triggered a sharp, temporary drop in shares of parent company AB InBev and a steep sales decline in the weeks after the campaign launched. In 2025, Target drew calls for a nationwide boycott from progressive shoppers after it terminated its DEI initiatives.
Broader polling, though, points to enduring support for workplace diversity. A 2025 Gallup–Bentley University survey found roughly six in ten Americans believe firms with diverse workforces are both more profitable and more innovative.
"There is a business case for diversity, that firms that have DEI should perform better," Grumbach said. "And there is also a theory that firms would be taking on massive legal and other forms of risk by being out of step with an executive order."
A Mixed Signal
Grumbach cautioned that the absence of a financial penalty cuts both ways. It may mean consumers quietly endorse companies that keep DEI programs, or it may simply mean shoppers are largely indifferent to corporate diversity policies either way.
"Many things are going on, one of which is that DEI programs don't always have that much depth to them. Some are symbolic, so this partially reflects that they don't affect companies as much either way," he said.
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