Walmart faces backlash over DEI policy reversal as shareholders and Dem officials urge them to reconsider

Walmart’s decision to reclaim its diversity, equality and inclusion “DEI” programs have been widely celebrated by conservatives, but some shareholders and Democratic officials balk.

The retail giant joined a growing list of companies scaling back DEI initiatives in November following similar moves by big names including Harley-Davidson, John Deere and Tractor Supply. McDonald’s, Amazon, Meta and American Airlines have also since announced changes to their DEI policies as more companies follow suit.

While some investors hailed Walmart’s move as a step in the right direction, others are calling for the retailer to reconsider its exit from DEI. In a letter to Walmart CEO Doug McMillon, a group of more than 30 Walmart Inc. shareholders, representing more than $266 billion in combined assets, asked the company to explain the business impact of abandoning DEI initiatives, calling the turnaround “disheartening,” Bloomberg first reported reported.

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“To see a company retreat from its stated values ​​and business opportunities associated with a diverse and inclusive workforce is very disheartening,” the signatories wrote. Additionally, Walmart did not offer a financial or business case for this policy change, but the company identified advancing ‘belonging, diversity, equity and inclusion’ as one of four priority ESG issues that ‘offer the greatest potential for Walmart to create shared value. “

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Shareholders, including Amalgamated Bank, Investor Advocates for Social Justice and Mercy Investment, accused the retail giant of giving in to “bullying behavior and pressure from anti-DEI groups” while ignoring demands “to address the risks associated with racial inequality by a significant number to its shareholders in the past two proxy seasons.”

The investors requested a meeting with Walmart’s senior leadership, urging them to consider a re-commitment to “DEI strategies and programs that help reduce bias and systemic barriers, create inclusive workplaces and advance the best talent.”

A group of 13 Democratic state attorneys general expressed a similar opinion in a separate report letter sent to McMillon a day later. The signatories, which include the attorneys general of New York, New Jersey, Maryland, Nevada, Rhode Island, Hawaii, Vermont, California, Minnesota, Maine and Connecticut, asked the retailer to explain how it will protect civil rights in the workplace and punish Walmart’s decision to abolish DEI policies.

“Threats of boycotts, lawsuits, or otherwise negatively impacting Walmart’s bottom line may have contributed to your decision to walk away from your DEI obligations. But we are concerned that Walmart did not consider the other side—the customers and employees who will be alienated.” with this departure,” they wrote.

“These changes are bad for business and bad for Walmart’s customer base, including those in our states,” the letter continued. “Especially considering your previous statements about the critical values ​​of diversity and inclusion, we encourage you to reconsider your announced changes.”

When reached for comment, Walmart told Fox Business: “We are the same company with the same values ​​with the same commitment to creating a sense of belonging for all of our associates, customers and members. We are focused on creating a Walmart for everyone and will continue to strengthen this commitment through our actions .”

CEO of Walmart in the US and President John Furner similarly defended the move in November during an appearance on “CBS Mornings” after the nation’s largest retailer confirmed it would make a number of changes, including removing sexual and transgender products from third-party retailers that advertise inappropriately to children from its online marketplace.

It also said that Walmart will stop funding the Center for Racial Equity, a nonprofit that Walmart launched in 2020 as a five-year initiative, and that it will completely drop the terms “LatinX” and “DEI” in official communications.

“Like many companies across the U.S., we were on the way,” Furner said reversals. “We’re going to continue to travel. And what we’re trying to do is make sure that every customer, every associate feels welcome here in the store and feels like they belong.”

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Walmart will also no longer participate in the Human Rights Campaign’s Corporate Equality Index, a report that ranks U.S. companies on their policies for LGBTQ employees.

Fox Business’ Kristine Parks contributed to this report.