S&P 500 companies face no financial impact from maintaining DEI

A new study of S&P 500 companies indicates that maintaining diversity, equity, and inclusion (DEI) programs has no significant impact on stock market returns or revenue compared to firms that abandoned them.

Following a January 2025 executive order from the Trump administration directing federal agencies to investigate DEI programs, some corporations dismantled their initiatives due to fears of regulatory repercussions, such as unfavorable treatment from the Federal Trade Commission or hostile tax auditing. However, research co-authored by Jacob Grumbach of the University of California, Berkeley, suggests that firms resisting these changes performed just as well financially as those that complied.

Case studies show diverging outcomes for different corporate strategies. While Target Corporation faced consumer boycotts and declining foot traffic after dismantling its DEI infrastructure, companies like Costco, Apple, and Delta Air Lines maintained their commitments. The research suggests that while DEI value may not be easily captured in share prices, maintaining these programs within legal limits does not appear to cause financial harm.