DEI policies brought no financial penalty to firms, study finds

A new study suggests that firms that maintain diversity, equity, and inclusion (DEI) policies during the second Trump administration have not faced any financial penalties. Despite President Trump's Executive Order 14173, which aimed to reduce DEI programs in both the public and private sectors, companies that kept their DEI initiatives performed just as well financially as those that scaled back or eliminated their efforts.

The study, conducted by Jacob Grumbach, an associate professor at the University of California, Berkeley, compared the financial performance of firms that maintained their DEI programs to those that discontinued them following the executive order. The results showed no significant difference in stock market returns or revenue between the two groups.

While some firms, including Apple, Costco, Delta Air Lines, and Dollar Tree, continued with their DEI programs, others like Target and Walmart rolled back their efforts. The researchers found that abnormal returns, which measure a company's performance compared to what was expected, were identical for both groups. Additionally, there was no detectable difference in revenue between firms that maintained DEI and those that did not.

Grumbach pointed out that while there are economic arguments for corporations to step back from diversity efforts, such as potential retaliation from the executive branch or negative treatment during mergers and acquisitions, the findings suggest that consumers continue to support businesses with DEI initiatives. Despite controversies like Bud Light's partnership with transgender influencer Dylan Mulvaney and Target's backlash from progressive shoppers, Americans generally believe that diverse workplaces are both profitable and innovative.