(Bloomberg) -- A group of more than 30 shareholders representing $266 billion in funds has asked Walmart Inc. to explain its business case for retreating on diversity, equity and inclusion initiatives, describing the decision as “disheartening.”
In a letter to Chief Executive Officer Doug McMillon, shareholders including Amalgamated Bank and Dominican Sisters of Grand Rapids, accused the world’s biggest retailer of giving into “bullying and pressure from anti-DEI groups.”
The investors want to speak to senior leadership and directors about the change in company policy, the group organized by the Interfaith Center on Corporate Responsibility wrote in the letter. The shareholders said they had spent three decades highlighting the risks associated with discrimination and inequities to Walmart’s leadership.
“DEI initiatives aren’t just ‘nice to have,’ they are essential to breaking down the systemic inequities hindering our economy,” Caroline Boden, director of shareholder advocacy at Mercy Investment Services, a signatory to the letter, said in a statement. “Inequity is bad for business and, ultimately, investors.”
The letter to Walmart comes as religious shareholders on both sides of the political spectrum are becoming more active. A conservative coalition of investors is looking to lend its support to right-leaning religious goals, the $24 billion GuideStone Funds said last month.
Walmart in November said it would no longer consider race and gender to boost diversity when granting supplier contracts, and it would stop collecting demographic data when assessing financing eligibility.
“Walmart has not offered a financial or business case for this change in policy,” the investors said in the letter dated Jan. 14. The shareholders said they have provided Walmart with data on the business and financial benefits of advancing DEI.
A spokesperson for Walmart said in a statement that the company is “focused on creating a Walmart for everyone and will continue to reinforce this commitment through our actions.”
Walmart, based in Bentonville, Arkansas, told employees of the changes to its efforts just days after anti-DEI internet activist Robby Starbuck threatened the company with a customer boycott. The company said some of the changes were already under consideration as it joined a slew of corporations across America that are reevaluating its diversity initiatives in the wake of the Supreme Court’s 2023 ban on affirmative action in college admissions.
After discussions with Starbuck, Walmart said it would review funding for LGBTQ events and end participation in the Human Rights Campaign’s Corporate Equality Index that measures LGBTQ workplace accommodation.
Starbuck claims he has influenced at least 15 companies to scrap certain DEI programs. Deere & Co., Harley-Davidson Inc. and Toyota Motor Corp. were among companies he targeted. With President-elect Donald Trump, a vocal critic of DEI, set to take office next week, Meta Platforms Inc. and Amazon.com Inc. have also said they would scrap some of their policies.
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