UPS, Coke and Home Depot shareholders try to force DEI changes

Investors put forward proposals both for and against corporate diversity initiatives this year
Aerial photograph shows The Home Depot Cumberland Store near the Home Depot Headquarters, Thursday, March 28, 2024, in Smyrna. (Hyosub Shin /



Aerial photograph shows The Home Depot Cumberland Store near the Home Depot Headquarters, Thursday, March 28, 2024, in Smyrna. (Hyosub Shin /

As diversity programs in corporate America face increasing legal challenges, shareholders of three publicly traded Atlanta corporations have demanded changes around diversity, equity and inclusion initiatives.

The moves come after a U.S. Supreme Court ruling in June 2023 effectively ended race-conscious college admissions programs. Nearly 60% of C-suite executives surveyed by employment law firm Littler said backlash to corporate diversity programs has increased since that ruling.

Recent court cases in Tennessee and Texas have forced changes to federal business diversity programs, and a high-profile racial discrimination case involving local Black-owned venture firm Fearless Fund is still winding its way through the courts.

Risks around DEI?

Shareholder proposals are one of the ways investors in a publicly traded company can push for change.

One of Coca-Cola’s shareholders, the National Center for Public Policy Research (NCPPR) — a D.C.-based conservative think tank — asked the board to commission and publish a report detailing whether the company engaged in any diversity, equity and inclusion (DEI) practices “that may create risks of discriminating against individuals who might sue the Company … for illegal discrimination on the basis of protected categories like race and sex” and potential costs to the business of such discrimination.

“Our central goal is to get corporations to get out of high-risk, low-reward activities that aren’t directly connected to their to their fundamental business purpose,” Scott Shepard, director of the Free Enterprise Project (FEP) and general counsel at the NCPPR, told The Atlanta Journal-Constitution. The FEP opposes “the woke takeover of American corporate life,” according to the project’s website.

The NCPPR sees DEI initiatives as a form of discrimination based on race, sex or orientation, that may exclude men, white people or straight employees. After nearly 200 years of slavery and segregation, the Civil Rights Act of 1964 officially outlawed employment discrimination based on race, color, religion, sex or national origin.

Shepard said Coca-Cola was violating its fiduciary duty by not exploring the legal risks of equity programs.

But fellow investors did not agree. The proposal received just 1.57% of votes cast at the May 1 annual meeting of shareholders.

The Coca-Cola board also opposed the resolution. In a filing with the Securities and Exchange Commission, the company wrote: “We believe that a diverse, equitable and inclusive workplace that is well-prepared to understand, assess and engage with the markets and consumers we serve is a strategic business priority and critical to the Company’s success, and that our efforts to achieve this are consistent with applicable law.”

In the case of Home Depot, the NCPPR proposed a resolution asking the company to list donations of $5,000 or more on its website, citing in part the home improvement giant’s million dollar gift to the nonprofit Lawyers Committee for Civil Rights Under Law in the wake of the 2020 protests over the murder of George Floyd.

Another conservative group, the National Legal and Policy Center, put forward a similar shareholder proposal to require that Home Depot director nominees disclose information about their political and partisan giving, citing the same $1 million gift.

The Home Depot proposals did not pass, each receiving just 2% of votes cast at Thursday’s meeting and the company’s board opposed both resolutions.

Cautious investors

Research shows that when a business is more diverse, it has better financial outcomes. A 2023 global analysis conducted by McKinsey found that companies with high gender or ethnic diversity have a 39% greater likelihood of financially outperforming companies who weren’t diverse.

Since 2020, there has been an increase in the number of proposals around workforce diversity, according to data from the Conference Board, a nonprofit think tank and business membership organization, and environmental, social and governance data analytics firm ESGAUGE.

Support for workforce diversity proposals across thousands of large American companies peaked in 2022, according to Matteo Tonello, managing director for environmental, social and governance at the Conference Board. But Tonello said in an email the declining support reflects a more nuanced situation.

“Investors may be more cautious about supporting these proposals because these topics have become politically polarizing,” Tonello said. “However, they also appreciate the large investments that so many companies have recently been making in these areas and the pressure companies are under because of new legislative and regulatory demands. As a result, many investors no longer see the need for further pressure that they saw only a few years ago.”

Push for data

But some investors also see legal risks in not having well-run DEI programs. In the case of UPS, a shareholder resolution asked the company to produce a report detailing the effectiveness of its equity initiatives and to provide metrics on “workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity.”

The proposal was introduced by As You Sow, a California-based nonprofit. The organization runs a workplace equity program with the help of Whistle Stop Capital focused on getting corporations to disclose data on their DEI programs.

Meredith Benton is the founder of Whistle Stop Capital and has tried for years to get UPS to produce data on hiring, promotion and retention rates within its workforce. Benton said this data is to ensure a company does not have racism, discrimination, harassment, sexism, pervasive within its corporate culture, because that could open it up to lawsuits.

She added there is also a business case to having a diverse workforce, “and therefore it is in the investors’ interest to monitor a company’s behavior around the diversity of its workforce.”

The proposal received about 22% of shareholder votes, not enough to pass. UPS opposed the resolution, writing in part, “We believe our existing diversity and inclusion practices, and significant disclosures, provide meaningful information that allows investors to determine the effectiveness of our human capital management policies related to workplace diversity.”

This article has been updated to reflect additional information on the source of data on proposals around workforce diversity.

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