Berkeley Study: S&P 500 Firms That Kept DEI Matched or Beat Those That Cut It
The News
UC Berkeley public policy scholar Jacob Grumbach's report "Markets Do Not Punish Firms for Maintaining DEI" found that S&P 500 companies that retained diversity, equity and inclusion commitments — including Apple, Cisco, Costco, Delta, JPMorgan Chase and Pfizer — performed as well as or slightly better on revenue and abnormal stock returns than peers that rolled back, such as Citigroup, IBM, Target and Walmart. A separate Catalyst and NYU study cited by HR Dive found 51% of federal contractors have decreased inclusion efforts while 52% of non-contractors are increasing them.
Why It Matters
For TA leaders under pressure to pare back inclusive sourcing and hiring on the grounds of legal or financial risk, the market data now runs the other way. Eight in ten companies are adapting rather than retreating, per Catalyst. The decision to cut DEI is a political choice; the evidence says it is not a market-mandated one — and quietly pulling inclusive-sourcing levers may be the one move that buys you nothing and costs you talent.
Taking Action
All action is situated in your corporate context. These are starting points, not prescriptions — choose what fits.
Connect
Who to talk with in your enterprise
Your CFO and head of talent acquisition — take the Berkeley findings into the next budget review and reframe the DEI conversation around evidence rather than assumption. If the financial case for cutting was the whole argument, the argument just lost its legs.
Inspect
What to take a closer look at
Compare your 2024 versus 2026 sourcing-channel mix and diverse-slate metrics. If you have quietly dropped inclusive-sourcing partners or requirements, check whether that moved any financial needle — and whether your pipeline diversity moved the wrong way with no offsetting gain.
Reflect
What to think about more deeply
If the market penalised no one for keeping DEI, what exactly was the "financial necessity" your organisation was protecting?