As June’s Pride Month festivities were nearing a conclusion, Tractor Supply released a statement that put LGBTQ+ rights proponents on alert.
The farm-focused retailer said it would stop sponsoring events such as pride celebrations and eliminate roles tied to diversity initiatives. Also on its list of actions: Tractor Supply would no longer submit data to the LGBTQ+ group Human Rights Campaign for its annual Corporate Equality Index.
With that move, Tractor Supply became the first domino to fall as companies began pulling out of the Corporate Equality Index. In the following months, businesses ranging from Ford to Lowe’s also announced they would stop submitting data for the index, a two-decade-old benchmark widely considered a gold standard for evaluating companies’ policies and benefits for LGBTQ+ employees.
The latest came on Nov. 25, when Walmart — the largest retailer and private employer in the U.S. — said it would stop sharing data with the HRC. Walmart said it had conversations with Robby Starbuck, the director-turned-conservative activist, ahead of its announcement.
Starbuck has been a public advocate for this shift, launching campaigns centered on companies he believes have run afoul with corporate diversity work. He told CNBC in an interview that he is ramping up these actions and would be homing in on retailers for the holiday season.
While Starbuck has targeted DEI initiatives more broadly, not just LGBTQ+ policies, the Human Rights Campaign has found its index at the center of a politically charged battle. The shift also pushed some allied groups and LGBTQ+-identifying consumers to speak out.
For Tractor Supply and some others, it marked a staunch turn in policy. Just two years ago, the retailer had boasted publicly that it earned a top rating from the HRC. On that same day in 2022, Molson Coors published a press release stating it had received a perfect score for the 19th straight year.
CNBC reached out to every company mentioned in this article; each company either did not provide further comment beyond public statements or did not respond to requests for details on what drove the changes.
“We’re very proud and honored to be recognized by the HRC with a 100 percent ranking for our LGBTQ workplace equality practices and policies,” Dave Osswald, chief people and diversity officer for Molson subsidiary MillerCoors, said in the 2022 release. “No matter the recognition though, we know we can never stop working to ensure a welcoming and inclusive environment.”
In the past two years, experts say, the rising concern around how the federal judiciary could rule on cases tied to diversity work has pushed companies to rethink related internal policies. Continued pressure from right-wing activists to do away with initiatives such as supplier quotas and carbon goals has turned up the heat, they said.
The tide change among some of America’s most well-known brands on this index is the latest instance of white-collar diversity efforts becoming a political flashpoint. Multiple business professors told CNBC that it adds to a broader picture of corporate America backtracking on this work less than half a decade after the numerous promises made in the wake of George Floyd’s murder.
“These companies that are making these really public statements, like Lowe’s or Ford Motor companies of the world, are really making an unforced error,” said New York University Law professor Kenji Yoshino.
For several companies, withdrawal from participation in the index comes after years of involvement and previous promotion of their scores.
Take Jack Daniel’s parent Brown-Forman, which said in August that it would no longer submit data for the index — four months after being named in Forbes’ “2024 America’s Best Employers for Diversity” list.
The company mentioned that it earned a 100% score for 12 straight years in its 2023 annual report. Brown-Forman also created in 2022 an initiative aimed at increasing the number of salaried employees in the U.S. who identify as LGBTQ+.
Ford, meanwhile, said in a leaked internal memo to employees in August that it would stop participating in the index and other best workplace rankings. Ford published a press release in 2017 centered on its perfect rating, and touted it was the first automaker to receive a 100% score — an achievement the Detroit-based company maintained every year since 2004.
“Ford remains committed to supporting diversity and inclusion because we believe it makes our company stronger,” Meeta Huggins, Ford’s then-chief diversity officer, said in the 2017 statement.
Lowe’s, too, said in August that it would end participation in the index’s survey, along with sponsorships for community events such as parades and fairs. Three years ago, the home improvement retailer posted on its LinkedIn page that it earned a 100% score for the second straight year.
“Lowe’s dedication to diversity and inclusion grows from the steadfast values of our associates and extends to every corner of our company,” the company said in the post.
Walmart leadership also once applauded its place atop the HRC’s ranking. Human resources chief Donna Morris posted on X in 2022 that she was “proud” of the Arkansas-based company for its recognition as a top workplace for the sixth straight year.
Harley-Davidson and Toyota are also on the growing list of companies declining to provide data for the ranking system going forward.
The HRC’s index, which launched in 2002, rates companies on factors such as the equitability of their benefits and their corporate social responsibility efforts. In addition to a survey sent to companies, the HRC also reviews tax filings, legal cases and news reports when evaluating firms.
Business and law experts don’t point to one silver bullet that catalyzed this change in sentiment. Instead, they see both rising political pressure and legal concerns at play.
First, right-wing pressure online has become increasingly hard to ignore, said Stephanie Creary, an assistant professor at the University of Pennsylvania’s Wharton School. Public shaming of companies for their diversity practices was happening long before Starbuck began pressing the issue, Creary said.
“This has become politicized,” Creary said. “It was not a tool, either way, that was leveraged by people running for office in quite the way that it is now.”
Creary said the internet gives people who don’t support LGBTQ+ rights easy access through the index to businesses that they may want to protest against. This backlash has turned what was once seen as a “reputation enhancer” into something that a handful of companies no longer view as worth touching, she said.
NYU’s Yoshino said recent legal rulings and cases have already put companies, universities and other organizations on edge.
Yoshino pointed specifically to the Supreme Court’s ruling on affirmative action in June 2023, which ruled that policies at Harvard University and the University of North Carolina that gave weight to a would-be student’s race are unconstitutional. The court’s majority opinion said the schools’ affirmative action programs “unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful end points.”
“The Supreme Court gave us such a clear window into how it was thinking about race and discrimination in that case,” Yoshino said. “It’s only a matter of time before that way of thinking will trickle over into statutes that do affect the private sector.”
However, he said, “There’s no universe in which giving your data with regard to the number of LGBT people within your ranks, or your support for LGBT rights, or your inclusion of LGBT individuals is going to run afoul of the law.”
Ultimately, this plays into a bigger trend of companies backtracking on diversity promises made after Floyd’s murder by a police officer galvanized racial equity efforts in 2020, said Adina Sterling, an associate professor at Columbia Business School.
When companies pull out of the index or walk back other diversity efforts, it suggests that they were never genuinely interested in the work to begin with, Sterling said. Rather, many corporations were only trying to win goodwill in a moment when diversity was considered a favorable topic in corporate America, she said.
“It’s almost like a rubber band: Organizations frequently will snap back into the state that they were in previously,” Sterling said. “I wish it weren’t that way, and I don’t think it has to be that way.”
While some companies have tried to frame their statements as unrelated to Starbuck’s activism, he told CNBC there are typically conversations between him and executives after he begins researching their businesses.
Companies have responded to Starbuck’s campaigns and general pressure around corporate diversity programs in different ways. Some, including Tractor Supply and Harley-Davidson, released public statements. Ford, on the other hand, sent an internal memo to employees that was obtained and shared online by Starbuck. Several companies have pointed out that they were already in the process of rejiggering their diversity efforts before Starbuck began applying public pressure.
Starbuck started with an emphasis on companies, such as Tractor Supply, that have mainly conservative-leaning customers, but he is broadening his focus. He also hopes to hire more researchers to investigate employee claims. Starbuck said his team initially “stopped counting” after receiving 5,000 complaints from whistleblowers within companies who believe their employers have gone too far on diversity efforts.
Starbuck said he felt inclined to do this work because he believes certain corporate diversity policies have become “blatantly illegal and violates our existing civil rights laws.” Starbuck said he doesn’t argue against the validity of laws ensuring equal protection of employees from marginalized backgrounds, but he said some companies’ current initiatives have created instances of what he sees as discrimination against white people.
“If you’re a public company and you’re expected to serve everybody, you’ve got to fundamentally operate differently,” Starbuck said in an interview. “I think we’ve just veered far off course.”
Starbuck said he sees the incoming Trump administration doing “a lot of good” on this front.
The HRC and other groups are fighting back against what they see as a public disregard for LGBTQ+ issues. The group has pointed repeatedly to data showing consumers were more likely to support businesses that affirmed this community. Four out of five LGBTQ+ consumers, the group said, are opting to boycott companies that are rolling back initiatives. More than half will urge others to do so also.
It’s a group that makes a sizable contribution to the American economy. Data from LGBT Capital clocked purchasing power from the community in the U.S. at $1.4 trillion annually. That’s roughly equivalent to the entire gross domestic products of Mexico and Spain, according to Worldometer.
“Consumers are two times more likely to want to buy from brands that support the community,” HRC President Kelley Robinson told CNBC in an on-air interview. “This is, bottom line, the best thing to do for businesses, and that’s why I think that we’re seeing so much energy from employees, from consumers and from shareholders starting to push back on these decisions.”
Robinson told CNBC that companies withdrawing their participation would have their scores slashed as a result. Prior to Walmart’s announcement, each company saw a 25-point deduction on their scores, out of 100. The HRC confirmed to CNBC that Walmart’s score is currently under review.
She also emphasized that corporations can be rated regardless of whether they submit data. Additionally, the HRC has been quick to point out that overall participation in the index is rising. The HRC was joined by several other civil rights groups on a co-written letter to Fortune 1,000 companies calling on them to recommit to diversity, equity and inclusion, or DEI, efforts.
“These capitulations weaken businesses and the American economy more broadly,” said the letter from HRC and more than a dozen organizations, including the NAACP and UnidosUS. “These shortsighted decisions make our workplaces less safe and less inclusive for hard-working Americans.”
Several dozen Democrats in Congress also wrote a letter to Fortune 1,000 businesses asking them to embrace DEI. This letter did not explicitly name the HRC index, but an accompanying press release clarified that it was written in response to companies “succumbing to a conservative media campaign.”
Starbuck, on the other hand, said his work has made “companies acutely aware that the HRC is not the powerful influencer that they believed they were.” He said in a post on X that the changes at Walmart specifically were his “biggest win yet” and should send “shockwaves throughout corporate America.” Starbuck also recently shared a meme of a grim reaper walking up to doors with the names of companies deemed “woke” on them.
Still, some smaller organizations and individuals have thrown their support to the HRC. After Tractor Supply’s June announcement, the Tennessee Pride Chamber removed the company as a member. Tractor Supply was nominated for the organization’s corporate partner of the year award in 2024 and had been slated to sponsor a networking event for the group the following month.
“These are not partisan issues, but a matter of human rights and sustainable business practice,” the Tennessee Pride Chamber said in a press release.
Tennessee Pride had just a few hours’ notice from a contact within Tractor Supply that the company’s statement was coming, according to executive director Stephanie Mahnke. She said she had previously been made aware by Tractor Supply representatives that there were some safety concerns tied to the event they were hosting, so they were preparing to enhance security.
“We were completely caught off guard,” Mahnke said.
After, Mahnke said other companies quickly stepped up to fill the void left by Tractor Supply in running the July event. In conversations, Tennessee Pride members still appear committed to the organization and its values — with the caveat they are being quieter around DEI issues, given the environment, she said.
For former Tractor Supply customer Ashe Taylor-Austin, the retailer’s announcement pushed them to look elsewhere when purchasing supplies for their horse. Taylor-Austin said they were grateful to have alternatives, knowing LGBTQ+ shoppers in more rural areas likely wouldn’t.
“When we got the news about Tractor Supply, I immediately started shopping around,” said Taylor-Austin, who switched to buying from a small business. “Once you do that and you show, I guess, who you are, then I believe it.”