New Research Shows DEI Policies Did Not Hurt Companies’ Bottom Line After Trump’s Executive Order

The great corporate retreat from diversity, equity and inclusion (DEI) was supposed to be about business. As political pressure from the Trump administration mounted, companies backed away from DEI initiatives amid warnings that they could hurt profits, investors and share prices. But a new study has just offered a different conclusion: companies that kept their DEI policies performed just as well.

The research, reported by The Guardian, examined how companies performed after President Donald Trump returned to the White House and issued executive orders targeting DEI programs. It found little evidence that companies that kept their DEI commitments suffered a financial disadvantage compared with those that scaled back or abandoned them completely.

That contradicts the president’s previous criticisms about DEI’s impact:

“My administration has taken action to abolish all discriminatory diversity, equity and inclusion nonsense — and these are policies that were absolute nonsense — throughout the government and the private sector,” Trump said last year, according to The Hill.

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The findings challenge a growing narrative across the country that DEI has become a liability. Since the beginning of Trump’s second term, we’ve reported on several major companies, including Walmart, McDonald’s and Target, that have reduced diversity initiatives, changed the language they use around them or stepped away from commitments that had become increasingly common after the 2020 Black Lives Matter protests.

The latest study, conducted by Jacob Grumbach, an associate professor at the University of California, Berkeley’s Goldman School of Public Policy, looked at companies in the S&P 500 following Trump’s January 2025 executive orders. Rather than simply comparing stock prices, Grumbach examined “abnormal returns”– how companies performed compared to what would otherwise have been expected.

The results suggest that companies did not need to abandon DEI to protect their financial performance. Businesses that continued their policies performed just as well as those that retreated. In other words, the market did not appear to punish companies simply for maintaining their diversity commitments.

Also, in some cases, directly following Trump’s executive order, companies that stuck with DEI actually saw their stocks perform better than those that did not.

The report does not show that DEI automatically increases profits, however. Nor does it claim that every company should maintain the same DEI standards. Corporate decisions can be influenced by everything from employee recruitment and customer preferences to legal and political considerations.

But it does undermine the general argument that DEI is inherently bad for business, as the White House previously claimed. In light of this report, companies can argue that keeping DEI doesn’t explicitly lead to suffering a measurable financial penalty. Executives may have more room than previously assumed to make decisions based on their own employees, customers and long-term business strategies.

That is particularly notable because some of the biggest names in corporate America have moved in the opposite direction. Companies including Google, Goldman Sachs and Lowe’s have pulled back from aspects of their DEI programs. In contrast, others like Costco, Apple and Delta Air Lines, have doubled down.

While the study doesn’t prove that DEI is a guaranteed win for businesses, it certainly challenges the idea that companies had to abandon these policies to protect their bottom line. For businesses that stuck with DEI, the message from the market seems to be simple: you could keep DEI and still do just fine.