A new study from the University of California, Berkeley has found that companies maintaining diversity, equity, and inclusion (DEI) programs do not experience a statistically significant financial advantage over those that scale back their commitments.
Researchers compared S&P 500 firms that continued DEI initiatives following President Trump’s January 2025 executive order with companies that reduced their efforts. The study found no meaningful difference in stock returns or revenue between the two groups.
The research indicates that whether a company supports DEI or rejects it, executives cannot assume that a politically popular label will protect conduct that violates anti-discrimination law.
The Berkeley team reported an estimated effect on revenue close to zero during the period examined. This finding does not prove all DEI initiatives are ineffective but confirms that the study offers no measurable financial payoff for the policies its authors advocate.
DEI advocates have long argued that diversity improves corporate performance. However, a 2024 reanalysis of McKinsey’s influential reports failed to reproduce statistically significant relationships using U.S. public-company data, and a 2025 review found the empirical case considerably less certain than corporate assurances suggest.
The study highlights that companies claiming particular DEI practices yield financial benefits must provide evidence that gains are real and repeatable. The obligation to prove promised returns rests with those making the claims.
Even if a practice generates a demonstrated financial benefit, it does not address ethical or legal questions. A corporate policy using race or sex to distribute opportunity may create grievances regardless of its framing.
Employment discrimination complaints have persisted: The Equal Employment Opportunity Commission received 88,201 new charges in fiscal year 2025, roughly level with the previous year and substantially above 2021 levels.
The Berkeley paper also reflects a distinct political perspective. It refers to the Trump administration as a “regime,” discusses what its authors call “democratic erosion,” and describes the deaths of Trayvon Martin, Michael Brown, and George Floyd collectively as “murders.”
Those judgments do not invalidate the statistical analysis but help explain the authors’ argument: Corporations should feel free to maintain DEI as an expression of political and moral commitment without expecting financial gains.
However, companies face risks beyond market performance. Public controversy can damage brand value, and legal enforcement carries significant costs. For example:
– IBM paid over $17 million in April 2025 to resolve Justice Department allegations involving discriminatory employment practices.
– Deloitte settled for $21.5 million in August 2025.
– Accenture agreed to pay $25 million in September 2025.
The study shows that companies maintaining DEI programs suffered no detectable financial penalty during the period examined but also fails to establish a financial reward. Advocates who seek support from shareholders, employees, and customers must provide a case grounded in performance, ethics, and law — not assurances that DEI initiatives are harmless.
Dustin DeVito is director of research at the 1792 Exchange.
