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

The recently published research has revealed that major US corporations, despite facing threats of the "go woke, go broke" narrative, managed to maintain their Diversity, Equity, and Inclusion (DEI) policies and performed equally well financially as those that abandoned such practices. The study, conducted by Jacob Grumbach from the University of California at Berkeley's Goldman School of Public Policy, analyzed the performance of S&P 500 companies following Donald Trump's January 2025 executive order that aimed to eradicate DEI within the federal government and target companies still supporting it.

According to Grumbach's analysis, those companies that retained their DEI policies or voted against anti-DEI shareholder resolutions exhibited similar financial performance compared to those that discontinued their DEI practices. Interestingly, the companies' stock prices actually improved in the days following the executive orders, suggesting that they might have anticipated the adverse consequences of withdrawing their support for DEI policies.

The "go woke, go broke" movement gained steam in 2023, fueled by a series of conservative backlash campaigns against companies that supported DEI, such as Bud Light's sales slump following a boycott over featuring the transgender influencer Dylan Mulvaney, and Target's social media backlash over its pride month merchandise.

In the face of these pressures, several prominent companies, including Google, Goldman Sachs, McDonald's, and Walmart, chose to abandon their DEI initiatives. However, the new research indicates that this decision might not have been as detrimental as initially feared.

Professor Grumbach posits that this finding highlights the resilience and adaptability of large US corporations when faced with authoritarian pressure. He underscores the importance of understanding the long-term implications of such noncompliance in civil society organizations.

The broader context of this research involves the recent dismantling of race-conscious admissions policies in higher education by the US Supreme Court, which further emboldened the anti-DEI movement. The study suggests that the fear-driven pullbacks from DEI may not be as widespread or severe as initially perceived, and that companies are capable of navigating these challenges while maintaining their DEI commitments.