Walmart, Target and other companies warn about growing consumer boycotts

Companies are warning investors about the risks of becoming the next target of angry customers.

Companies are warning investors about the risks of becoming the next target of angry customers. Corporate America is required to disclose risks to their businesses in their annual regulatory filings. This year, Walmart, Target, Home Depot, Corona-parent Constellation Brands join an increasing number of companies advising investors about customer and legal backlash to their diversity, equity and inclusion (DEI) policies and environmental, social and governance (ESG) initiatives. They’re also giving notice of the risks of rolling back these programs. Businesses typically warn shareholders about economic downturns, data breaches, natural disasters, and tax code changes. But companies are adding new risk disclosures in response to the intense political divide over corporate efforts to increase diversity in the workplace, promote LGBTQ rights and slow down climate change, corporate governance and risk management researchers say. “Companies face a Catch-22 situation,” said Kristen Jaconi, director of the Peter Arkley Institute for Risk Management at USC. “Consumers may be dissatisfied if a company takes a particular position on a social issue or if a company takes no position at all.” Consumer brands are trying to avoid damaging boycotts like those against Bud Light, Tesla, and Target. They are also reacting to opposition to DEI on the right, including the Trump administration’s threats to investigate companies with “illegal” DEI programs, conservative lawsuits and activist shareholder proposals against companies, and right-wing activists like Robby Starbuck targeting companies with DEI programs. “The heightened debate on DEI and climate, in particular, has driven the inclusion of these disclosures in the last few months,” said Matteo Tonello, the head of benchmarking and analytics at The Conference Board.