What's Happening

By Sister Judy Byron, OP, Portfolio Advisory Board Member and 
Maxwell Homans, Shareholder Advocacy Associate for Mercy Investments

February 18, 2025, Adrian, Michigan – Beginning in 2024, several prominent companies announced that they are ending or modifying their Diversity, Equity and Inclusion (DEI) programs aimed at hiring and supporting a more diverse workforce and supplier base. These announcements followed recent legal decisions regarding affirmative action programs, anti-DEI campaign rhetoric in the recent election cycle, and a flurry of anti-DEI shareholder proposals at companies in recent proxy seasons. 

Ford Motor Company was among the first to announce changes in its DEI programs, citing an “external and legal environment related to political and social issues [that] continues to evolve.” The Portfolio Advisory Board joined other investors in filing a shareholder proposal requesting that the company disclose analysis that the company undertook before making changes to its DEI policies and practices.
 
Ford’s announced changes included no longer participating in the Human Rights Campaign’s (HRC) survey on corporate practices related to lesbian, gay, bisexual, transgender, and queer (LGBTQ+) employees; not linking compensation to diversity goals; and changing the focus of employee resource groups. 

In a subsequent meeting with Ford, the company assured investors that its commitment to diversity and inclusion is unwavering. The company said it has not put out a public clarification of its position because it wants to avoid feeding the media narrative grouping it with DEI rollbacks, but it immediately reached out to its largest investors to inform them of its continued commitment to DEI. 

Speaking with Ford to hear firsthand why the changes were made and how it plans to continue fostering a working environment based on belonging and individual potential was helpful. However, we anticipate that the proposal will remain on the proxy ballot and hope that Ford will use the opportunity to explain its decision publicly.

Walmart announced in December that it will be rolling back some of its DEI initiatives and modifying its DEI language while continuing to encourage “a sense of belonging” for its employees, customers, and suppliers. PAB and other investors have engaged with Walmart for more than 30 years, including numerous dialogues and proposals that flagged the business and financial risks to Walmart associated with systemic racism, discrimination, and inequity as well as the significant benefits of advancing DEI. 

On January 15, the PAB and other Interfaith Center on Corporate Responsibility (ICCR) investors sent an Investor Statement to CEO Doug McMillon and issued a press release expressing our deep disappointment regarding Walmart’s recent announcement about its DEI commitments. Subsequently, investors met with Walmart about its DEI program changes and we plan to continue engaging the company on that issue.

Early executive orders from the new Trump Administration have fueled fears that companies could come under federal investigation for their DEI programs and policies, and more companies, such as Target, have recently announced changes in their programs. We anticipate that urging companies to continue to prioritize DEI will be a significant focus for our engagements with U.S. companies for some time to come.