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CNN
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Costco is combating an anti-DEI wave with a stern rebuke of activist shareholders who want to end the warehouse retailer’s diversity ambitions.

Walmart, John Deere, Tractor Supply and other companies are changing or waiving their diversity, equity and inclusion (DEI) policies. However, Costco believes DEI promotes a “treasure hunt” shopping atmosphere and stands behind its efforts.

Costco’s board unanimously recommended that its shareholders vote against a proposal from a conservative think tank, the National Center for Public Policy Research, that would require Costco to assess and issue a report on the financial risks of maintaining its diversity and inclusion goals . The group criticized Costco for possible “illegal discrimination” against employees who are “white, Asian, male or heterosexual.”

The National Center for Public Policy Research did not immediately respond to CNN’s request for comment.

Costco has a chief diversity officer and a supplier program focused on expanding with small and diverse businesses. It also donates to organizations like the Thurgood Marshall College Fund that support minorities and underrepresented groups.

Costco said its DEI efforts help the company attract and retain a diverse range of employees and improve goods and services in stores. Costco also said its members want to interact with a diverse employee base.

“A diverse group of associates helps, among other things, bring originality and creativity to our merchandise offerings and promote the ‘treasure hunting’ experience that our customers value,” Costco said in its proxy statement to investors. “We believe (and our member feedback shows) that many of our members enjoy seeing themselves reflected in the people they interact with in our warehouses.”

The board went further in its recommendation to vote against the proposal, saying the think tank was disguising its true anti-diversity agenda under the guise of risk reduction. Costco said the NCPPR burdens companies with DEI challenges and that the organization’s broader agenda is to eliminate diversity initiatives.

“The proponent expresses concerns about legal and financial risks to the company and its shareholders associated with the diversity initiatives,” the company said. “The supporting statement shows that it is the advocate and others who are responsible for causing burdens on companies through their challenges to long-standing diversity programs. The advocate’s broader agenda is not to reduce risk to the company, but to eliminate diversity initiatives.”

Costco released its proxy statement earlier this month, but the statement gained attention on social media this week.

There is no single definition of DEI, but it is generally a mix of employee training, employee resource networks, and recruiting practices to promote representation among people of different races, genders, and classes, people with disabilities, veterans, and others.

The shareholder resolution alleges that Costco’s DEI practices are potentially discriminatory. However, Costco said its policies are legal and not discriminatory.

Costco, which pays some of the highest wages in retail and is considered a progressive employer, is supporting DEI at a time when such initiatives are under attack from right-wing activists, legal groups, conservative customers and the new administration of President-elect Donald Trump.

Most companies aren’t abandoning DEI entirely, but some are changing the terminology from “DEI” to “inclusion” or “belonging” to address the pressure. Companies are also making their efforts less prominent than in 2020 and 2021.