Companies that held steadfast to diversity, equity, and inclusion (DEI) programming continued to earn high profits – despite ominous warnings from President Donald Trump that such efforts hurt bottom lines, according to new research from the University of California, Berkeley.
On social media, President Trump previously claimed that companies that “go woke, go broke” when they prioritize recruiting and retaining a diverse staff and customer base.
Significance. Research conducted by The Democracy Policy Lab at the University of California, Berkeley found that S&P 500 companies that resisted pressure from the executive branch to shut down diversity initiatives performed equally with companies that eliminated those programs.
In their analysis, the researchers focused on companies’ abnormal returns: the difference between how a stock is expected to perform and how it actually performs.
When comparing big companies like Costco, which defied the DEI orders, and Target, which complied with the administration, researchers Hanna Folsz and Jacob Grumbach found that major corporations maintained stock market returns while defying executive orders.
In a video, Grumbach said the research revealed that major corporations can “disobey and stand up to the Trump administration orders and perform just as well in the economy.”
The research looked at all 500 S&P 500 companies.
In the final year of President Joe Biden’s presidency in 2024, 79% or 395 of the S&P 500 companies had some form of DEI.
And roughly 43% or 215 of them, “had DEI programs with real rules and procedures attached,” Grumbach told The Emancipator in a statement.
After the executive order, the researchers found that only 54 S&P 500 companies kept their DEI programming.
Grumbach noted that DEI initiatives can take many forms. They used four treatments to define DEI and saw that “No matter how we measure DEI in companies, we find the same answer,” as said in a piece by The Guardian, the first to report on the study.
Overlooked angle. Data shows consumers rewarded companies that maintained DEI initiatives and stayed true to their values despite executive branch pressure. The researchers also highlighted that although the executive branch made threats to companies that maintained these initiatives, they “did not engage in other major forms of regulatory retaliation against noncompliant firms.”
The power structure. In January 2025, Trump announced an executive order that calls for federal investigations into companies with DEI initiatives in hiring practices and general company-wide programming. Worried about the administrative threats, federal investigations, and fines, companies like Meta, Target, Amazon, and Starbucks removed diversity programming and language from their company page.
Consequently, consumers banded together to boycott companies that abandoned DEI initiatives in an act of protest against compliance with Trump’s executive order. Nationwide, consumers boycotted Target for their DEI rollback, which stymied sales and caused stocks to plummet. Amid the backlash, Brian Cornell, who was then the company’s CEO, stepped down.
Other companies like Costco, Apple, and Delta Airlines resisted pressure to shut down DEI initiatives, despite Trump’s claims that it would hurt their economic performance and threats of investigations for “breaking civil rights laws.”
Researchers noted in their research that “Firms that resist directives from the regime may suffer negative financial consequences”; however, results from this analysis prove otherwise.
Companies that stood by DEI claimed that it would hurt business to abandon those initiatives. In a Forbes piece, the CEOs of companies like Cisco and Deutsche Bank said DEI initiatives were too valuable and “critical” to the profit and longevity of their business operations.
