After 49 members of Congress and several activist organizations sent letters asking Fortune 1000 companies to “defend” DEI values, Inspire Investing worked with Alliance Defending Freedom and a group of influential investors with over $65 billion in assets under management to organize a response.
It is estimated that companies in the U.S. spend close to $8 billion a year on DEI training and initiatives. Fortunately, more and more companies such as Toyota, Ford, John Deere, Tractor Supply, and Lowe’s are “waking” up to the dangers of DEI and abandoning their DEI policies. This trend has been accelerating, given the recent Supreme Court rulings against affirmative action and the customer backlash against DEI. In response to this anti-DEI trend, a group of radical politicians and activist organizations have written letters to the Fortune 1000 companies, pressuring them to recommit to these failed DEI policies.
Inspire Investing, a leader in faith-based investing, believes that businesses should answer to their shareholders, customers, and employees, not outside political influencers. Working alongside Alliance Defending Freedom, Inspire mobilized a group of investors with over $65 billion in assets under management to send their own letter to Fortune 1000 businesses urging them to avoid or roll back their DEI policies. Seventeen state treasurers and financial officers also sent a separate letter to the companies stating that “DEI policies and practices threaten your company’s financial health, its reputation with customers, our nation’s economy, and the civil liberties of everyday Americans.”
In their letters, the 49 members of Congress and activist organizations repeat the false claims that DEI improves company performance, reduces risk, and strengthens unity. In reality, DEI programs have the opposite effect. For example, recent academic work published in the neutral Econ Journal Watch has called into serious question the long-touted assertion that DEI programs provide a financial benefit for companies and shareholdersi. Companies are also facing serious legal risk for DEI programs in light of recent Supreme Court decisions in Students for Fair Admission v. Harvard, Groff v DeJoy, and City of St. Louis v. Muldrow.ii In addition, research has shown that DEI divides, rather than unites, colleagues.iii
“As long-term shareholders, we want the companies in which we invest to be successful. Unfortunately, companies that embrace DEI policies risk alienating their customers and employees and expose themselves to serious legal risk, all for no measurable improvement in performance,” said Tim Schwarzenberger, Portfolio Manager and Director of Corporate Engagement at Inspire Investing.
Robert Netzly, CEO of Inspire Investing, added, “We are proud to be joined by a coalition of investors and state financial officers calling on companies to abandon dangerous DEI policies and prioritize their fiduciary duty to shareholders.”
For more details on this initiative, read the full press release published by Alliance Defending Freedom, as well as the exclusive from Daily Wire.
iEcon Watch Journal, “McKinsey’s Diversity Matters/Delivers/Wins Results Revisited,” Jeremiah Green and John R.M. Hand, March 2024, https://econjwatch.org/articles/mckinsey-s-diversity-matters-delivers-wins-results-revisited. (See also: Harvard Law School Forum on Corporate Governance, “Is There a Business Case for Racial Diversity on Corporate Boards?,” Attila Balogh and Scott E. Yonker, October 2, 2024, https://corpgov.law.harvard.edu/2024/10/02/is-there-a-business-case-for-racial-diversity-on-corporate-boards/#more-168320.)
iiReuters, “With Supreme Court Ruling, It's Time for Companies to Take a Hard Look at Their Corporate Diversity Programs,” Andrea R. Lucas, June 29, 2023, https://www.reuters.com/legal/legalindustry/with-supreme-court-affirmative-action-ruling-its-time-companies-take-hard-look-2023-06-29/.
iiiThe New York Times Magazine, “The University of Michigan Doubled Down on D.E.I. What Went Wrong? A decade and a quarter of a billion dollars later, students and faculty are more frustrated than ever,” Nicholas Confessore, October 16, 2024, https://www.nytimes.com/2024/10/16/magazine/dei-university-michigan.html?campaign_id=9&emc=edit_nn_20241016&instance_id=136975&nl=the-morning®i_id=197681865&segment_id=180550&user_id=7ff808fbfdfafcde3292ee61e753a7e5. (See also: Alliance Defending Freedom, “Survey: 3 in 5 American workers fear sharing religious, political views in workplace,” ADF Press Release, March 14, 2023, https://adflegal.org/press-release/survey-3-5-american-workers-fear-sharing-religious-political-views-workplace.)
Tim Schwarzenberger, CFA is a Portfolio Manager with Inspire Investing and has over 20 years of industry experience. He previously served as Managing Director at Christian Brothers Investment Services (CBIS), where he was an integral member of the Investment Team responsible for implementing the firm’s strategy development, portfolio construction, and Catholic investing initiatives.
After 49 members of Congress and several activist organizations sent letters asking Fortune 1000 companies to “defend” DEI values, Inspire Investing worked with Alliance Defending Freedom and a group of influential investors with over $65 billion in assets under management to organize a response.
It is estimated that companies in the U.S. spend close to $8 billion a year on DEI training and initiatives. Fortunately, more and more companies such as Toyota, Ford, John Deere, Tractor Supply, and Lowe’s are “waking” up to the dangers of DEI and abandoning their DEI policies. This trend has been accelerating, given the recent Supreme Court rulings against affirmative action and the customer backlash against DEI. In response to this anti-DEI trend, a group of radical politicians and activist organizations have written letters to the Fortune 1000 companies, pressuring them to recommit to these failed DEI policies.
Inspire Investing, a leader in faith-based investing, believes that businesses should answer to their shareholders, customers, and employees, not outside political influencers. Working alongside Alliance Defending Freedom, Inspire mobilized a group of investors with over $65 billion in assets under management to send their own letter to Fortune 1000 businesses urging them to avoid or roll back their DEI policies. Seventeen state treasurers and financial officers also sent a separate letter to the companies stating that “DEI policies and practices threaten your company’s financial health, its reputation with customers, our nation’s economy, and the civil liberties of everyday Americans.”
In their letters, the 49 members of Congress and activist organizations repeat the false claims that DEI improves company performance, reduces risk, and strengthens unity. In reality, DEI programs have the opposite effect. For example, recent academic work published in the neutral Econ Journal Watch has called into serious question the long-touted assertion that DEI programs provide a financial benefit for companies and shareholdersi. Companies are also facing serious legal risk for DEI programs in light of recent Supreme Court decisions in Students for Fair Admission v. Harvard, Groff v DeJoy, and City of St. Louis v. Muldrow.ii In addition, research has shown that DEI divides, rather than unites, colleagues.iii
“As long-term shareholders, we want the companies in which we invest to be successful. Unfortunately, companies that embrace DEI policies risk alienating their customers and employees and expose themselves to serious legal risk, all for no measurable improvement in performance,” said Tim Schwarzenberger, Portfolio Manager and Director of Corporate Engagement at Inspire Investing.
Robert Netzly, CEO of Inspire Investing, added, “We are proud to be joined by a coalition of investors and state financial officers calling on companies to abandon dangerous DEI policies and prioritize their fiduciary duty to shareholders.”
For more details on this initiative, read the full press release published by Alliance Defending Freedom, as well as the exclusive from Daily Wire.
iEcon Watch Journal, “McKinsey’s Diversity Matters/Delivers/Wins Results Revisited,” Jeremiah Green and John R.M. Hand, March 2024, https://econjwatch.org/articles/mckinsey-s-diversity-matters-delivers-wins-results-revisited. (See also: Harvard Law School Forum on Corporate Governance, “Is There a Business Case for Racial Diversity on Corporate Boards?,” Attila Balogh and Scott E. Yonker, October 2, 2024, https://corpgov.law.harvard.edu/2024/10/02/is-there-a-business-case-for-racial-diversity-on-corporate-boards/#more-168320.)
iiReuters, “With Supreme Court Ruling, It's Time for Companies to Take a Hard Look at Their Corporate Diversity Programs,” Andrea R. Lucas, June 29, 2023, https://www.reuters.com/legal/legalindustry/with-supreme-court-affirmative-action-ruling-its-time-companies-take-hard-look-2023-06-29/.
iiiThe New York Times Magazine, “The University of Michigan Doubled Down on D.E.I. What Went Wrong? A decade and a quarter of a billion dollars later, students and faculty are more frustrated than ever,” Nicholas Confessore, October 16, 2024, https://www.nytimes.com/2024/10/16/magazine/dei-university-michigan.html?campaign_id=9&emc=edit_nn_20241016&instance_id=136975&nl=the-morning®i_id=197681865&segment_id=180550&user_id=7ff808fbfdfafcde3292ee61e753a7e5. (See also: Alliance Defending Freedom, “Survey: 3 in 5 American workers fear sharing religious, political views in workplace,” ADF Press Release, March 14, 2023, https://adflegal.org/press-release/survey-3-5-american-workers-fear-sharing-religious-political-views-workplace.)
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