(Reuters) - Costco Wholesale (NASDAQ:COST) shareholders voted against a proposal requesting a report on the risks of maintaining its diversity and inclusion initiatives, the U.S. company said on Thursday, against the backdrop of intense scrutiny of such policies.
The vote was seen as an early test of investor views about the value of corporate diversity, equity and inclusion (DEI) programs, which many companies added or beefed up starting in 2020 amid the Black Lives Matter movement.
More than 98% of the shareholders voted against it at the annual meeting, Costco said.
Last year, shareholder resolutions looking to counter DEI programs and other corporate social considerations garnered less than 2% support on average.
U.S. President Donald Trump has issued an executive order that directed government agency chiefs to dismantle DEI policies at federal agencies, federal contractors and in the private sector.
He has also suggested that some companies will face investigations and legal action if their programs are deemed to be discriminatory.
The proposal from the National Center for Public Policy Research, which describes itself as a free-market think tank, had asked Costco to assess the potential business risks related to its DEI policies.
The group contended that such efforts could pose legal, reputational, and financial risks, potentially impacting shareholder returns.
Costco's board, which urged votes against the proposal, said the report would not provide "meaningful additional information" to shareholders.
Companies such as Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN), JPMorgan Chase (NYSE:JPM) and Boeing (NYSE:BA) have modified their initiatives, scrapped their DEI goals or ended participation in the Human Rights Campaign Foundation's corporate equity index.
The membership-only retailer has more than 300,000 employees globally and about 219,000 in the United States, according to its 2024 annual report.