DEI Policies Thrive: US Firms That Kept Them Outperformed 2026

DEI policies have become a contentious issue in corporate America, but new research shows that US firms that kept their diversity, equity, and inclusion initiatives actually outperformed their peers who bowed to conservative pressure. The study, conducted by Jacob Grumbach of UC Berkeley's Goldman School of Public Policy, analyzed S&P 500 companies after President Trump's January 2025 executive order targeting DEI programs.

The 'Go Woke, Go Broke' Myth vs. Reality

Conservative activists and politicians have long warned that companies embracing DEI would face financial ruin, coining the phrase "go woke, go broke." However, Grumbach's research, shared exclusively with the Guardian, reveals the opposite: firms that maintained their DEI policies or voted down anti-DEI shareholder resolutions performed just as well financially as those that abandoned them. In the days immediately following the executive orders, companies that kept DEI policies actually saw better stock market performance than those that didn't.

How the Research Was Conducted

Grumbach used "abnormal returns"—the difference between expected and actual stock performance—to isolate the impact of DEI decisions. This methodology allowed him to control for broader market trends and focus specifically on the effect of corporate policy choices. The analysis covered all S&P 500 companies, providing a comprehensive picture of the corporate response to political pressure.

Why Some Companies Can Afford to Keep DEI

Grumbach notes that a company's ability to maintain DEI policies often depends on its consumer base and brand identity. For instance, Apple's customer demographic tends to value progressive values, making it easier to withstand political backlash. In contrast, Tractor Supply, which serves a more conservative rural customer base, may have felt compelled to pull back its DEI initiatives to protect its market position.

Key Takeaways for Business Leaders

• DEI policies do not harm financial performance; they can even boost investor confidence.
• Political pressure may be less impactful than assumed, especially for brands with loyal progressive customers.
• Companies should evaluate their unique market position before making policy decisions.
• The "go woke, go broke" narrative lacks empirical support in this comprehensive study.

Implications for Corporate Strategy

This research challenges the prevailing narrative that DEI is a liability. For business leaders, the findings suggest that diversity and inclusion efforts can coexist with strong financial results. The key is aligning corporate values with customer expectations and maintaining authenticity in the face of political pressure.

FAQ

In conclusion, the evidence is clear: DEI policies are not a financial drag. Companies that stood firm have proven that diversity and profitability can go hand in hand. As the corporate world navigates political pressures, this research offers a data-driven counterpoint to the "go woke, go broke" myth.

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