Berkeley Study Finds No Financial Upside to Maintaining DEI
A new Berkeley study, Markets Do Not Punish Firms for Maintaining DEI, examines whether S&P 500 companies that maintained diversity, equity, and inclusion programs after the Trump administration’s January 2025 DEI executive order suffered financially compared with companies that rolled them back. The authors conclude that companies maintaining DEI performed “just as well” in stock-market returns and revenue, arguing that businesses can resist federal pressure on DEI without suffering significant financial consequences. But the inverse is equally important for corporate leaders: companies that rolled back DEI also performed just as well. The study found no statistically significant stock-market or revenue advantage from maintaining DEI across its various measures of corporate commitment. That finding is notable given longstanding claims that DEI improves financial performance. If particular DEI practices create shareholder value, companies should be able to identify which DEI practices increase shareholder value and at what point benefits begin to diminish. The study also captures only part of the risk environment. Its revenue analysis extends through July 2025, before several major federal enforcement actions involving allegedly discriminatory employment practices. IBM, Deloitte, and Accenture have since agreed to settlements totaling more than $63 million, while Nike has faced separate EEOC scrutiny. The Berkeley …