Costco Diversity Study: Culture Risk Lessons for CEOs

Costco wholesale store

In 2020, after the murder of George Floyd, U.S. corporations pledged over $50 billion toward racial equity. BILLION. Costco’s leadership promised $25 million in DEI initiatives and publicly declared: “racism, discrimination and harassment are not tolerated at Costco. We remain steadfast in our commitment to fairness and equity for our employees, members and communities.”

But public statements only go so far. In July of that same year, employees reported being sent home for wearing Black Lives Matter masks, while those wearing pro-police masks were allowed to work. Costco’s pledge collided with inconsistent enforcement, creating a perception gap between leadership’s words and frontline reality.

What the Data Showed

Costco ranks 14th of 48 retail companies evaluated, scoring 57.7 on issues that matter to employees and customers. Representation at the management level looked like this:

• White: 63.5% (vs. 60.1% of U.S. population)

• Black: 8.1% (vs. 12.5%)

• Hispanic: 19.3% (vs. 18.5%)

• Asian: 6.4% (vs. 5.8%)

The numbers suggested Costco had relative strength in Hispanic and Asian representation, but Black employees were underrepresented in management roles.

The 2025 Culture Risk Update: What CEOs Should See

Fast-forward to 2025, something important has shifted: many of Costco's competitors have pulled back on public DEI commitments. The language that dominated in 2020 has been scrubbed from many corporate sites, replaced with broader “opportunity” and “community” messaging.

The pattern is clear: DEI was treated as a PR-driven initiative. When markets cooled and backlash rose, companies stepped back rather than embed culture as a measurable business priority.

However, since the original piece, Costco has intentionally doubled down on its DEI commitments even as many of its retail competitors have scaled back or removed theirs.

At Costco’s annual shareholder meeting in January 2025:

• Over 98% of shareholders rejected a proposal to evaluate the risks of maintaining its DEI and inclusion programs. Costco’s board had urged voting against that proposal, stating its diversity, equity, and inclusion initiatives are essential and lawful. Governance Intelligence

• The Board reaffirmed that these programs are not a distraction or liability but drivers of innovation, retention, and customer trust. AP News

• Meanwhile, 19 Attorneys General from multiple states pressured Costco to revoke DEI policies. Costco’s leadership publicly defended inclusion as part of its core ethics and fundamental operating value. Montgomery Community Media

Costco’s actions reveal what CEOs are now being tested on: values under pressure. When shareholders and government actors push back, what do you do? Walk away, or stand firm and build the narrative of culture as foundational to business resilience.

For Costco, the risk wasn’t the numbers alone. It was:

• Misalignment between words and actions (mask policy vs. equity pledge).

• Inconsistent accountability (who enforces, and how?).

• Board-level blind spots (no system to measure or report culture risk).

CEO Lesson

DEI might be the subject, but the lesson is about culture risk. Costco’s challenges highlight how quickly public statements can become liabilities without measurable accountability. For CEOs, the lesson is simple: culture is no longer a soft HR issue. It’s a board-level business risk with direct impact on Revenue, Reputation, and Retention.

Get FIG’s 7-Step Culture Risk Audit

---

About FIG

FIG Strategy & Consulting helps CEOs protect revenue, reputation, and retention by treating culture as the #1 business risk. Our audits identify vulnerabilities, track KPIs, and make culture measurable at the board level.