US firms that kept DEI policies despite ‘go woke, go broke’ threats thrived

New research reveals that companies who maintained diversity, inclusion, and equity (DEI) policies despite threats of being labeled "woke" and "broke" performed equally well financially compared to those that abandoned their DEI practices. After President Donald Trump's January 2025 executive order aimed at dismantling DEI within the federal government and pressuring businesses to abandon their DEI commitments, numerous big corporations, including Google, Goldman Sachs, McDonald's, and Walmart, announced the end of their DEI programs.

However, the research published by Jacob Grumbach, an associate professor at the University of California at Berkeley's Goldman School of Public Policy, shows that firms like Costco, Apple, and Delta Air Lines that resisted the pressure and retained their DEI policies maintained the same level of financial success as those that dropped their DEI initiatives.

Grumbach analyzed the performance of S&P 500 companies following the executive order, using "abnormal returns" to measure the impact of companies' DEI decisions. His findings suggest that the firms that kept their DEI policies or voted against anti-DEI shareholder resolutions performed just as well as their competitors who retreated.

The "go woke, go broke" narrative gained traction in 2023 following a series of conservative backlash against businesses, which led to a decline in sales for companies like Bud Light and Target following public controversies. The research indicates that companies' ability to withstand pressure from authoritarian regimes and maintain their DEI commitments highlights their capacity to navigate legal and regulatory environments without compromising their financial performance.