Full report
Costco is graded D because of one MAJOR item: its DEI team led by a Chief Diversity Officer, described in its FY2025 Sustainability Report. Without the cap, its score would be 88, a C.
A serious (MAJOR) finding caps the score at 83, a D. Without the cap, Costco would score 88 (100 minus its 12 points). See How We Rate.
Updated October 2026. By Research Desk.
What is new in this update
This update adds Costco’s latest SEC filings: the FY2025 and FY2026 annual reports (10-K), the December 2025 proxy, the January 2026 shareholder vote and the fiscal 2027 executive bonus plan filed in October 2026.
Two new findings were added: diversity, equity and inclusion metrics in fiscal 2024 executive bonuses, and environmental and social metrics that remain in executive bonuses for fiscal 2027. A stated climate goal was also added as a minor item. The grade stays D. For the full sequence of votes, letters and filings, see our Costco DEI timeline. For how Costco handled the 2025 pushback, see Costco keeps its DEI policies despite conservative pushback.
Points deducted by category
- DEI hiring, pay & suppliers: 16/15 points deducted
- FY2025 Sustainability Report: an "Inclusive Community team," "Led by our Chief Diversity Officer (CDO)," that "supports the advancement of inclusion at Costco, our relationships in the communities where we do business and an increase in qualified suppliers that lend diversity to our merchandise offering." The 2024 Sustainability Commitment says the team's "focus is to support Costco's DEI strategy." Named DEI office, in place (MAJOR). (source; 2024 commitment)
- Costco proxy (DEF 14A, filed Dec 11, 2024): the Board "unanimously recommends a vote AGAINST" a shareholder proposal for a report on the risks of maintaining its DEI roles, policies and goals, saying "Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all" and "We believe that our diversity, equity and inclusion efforts are legally appropriate, and nothing in the proposal demonstrates otherwise." At the Jan 23, 2025 meeting the proposal got 4,857,195 votes for and 281,267,612 against, with 4,092,595 abstaining (8-K, Jan 27, 2025): 98.3% of votes cast for or against. (source; vote)
- New: the same proxy says $93,333 of the CEO's fiscal 2024 bonus eligibility "was determined by environmental and social objectives for achievement of quantitative performance metrics (including metrics concerning diversity, equity and inclusion, resource consumption, and other environmental-related areas)," and that "The quantitative environmental and social targets were met." Other executive officers had $24,000 tied to the same metrics. DEI metrics in executive pay. (source)
- Note, no reversal credit: the Dec 4, 2025 proxy describes the fiscal 2025 metrics as "environmental and human capital metrics" and no longer names DEI. The FY2025 and FY2026 10-Ks retitle the "Diversity, Equity and Inclusion" section "Inclusion" but keep "support of diversity and inclusion" and "supplier inclusion." A change of wording alone earns no reversal credit. (source; FY2026 10-K)
- Internal policies & benefits: 0/10 points deducted
- Free speech, debanking, deplatforming & anti-military/anti-American conduct: 0/15 points deducted
- Political giving (PAC, treasury, leadership): 2/10 points deducted
- FEC records show personal contributions by Costco chairman Hamilton E. James of at least $450,000 to Democratic committees in the 2024 cycle: Senate Majority PAC $250,000 (Oct 11, 2024), House Majority PAC $100,000 (Sept 27, 2024) and Harris Action Fund $100,000 (May 9, 2023). FEC records reviewed Oct 25, 2026 show no contributions from him to Republican candidates or party committees in the 2024 or 2026 cycles. (source)
- Advocacy, lobbying & public statements: 0/15 points deducted
- Marketing, products & content: 0/10 points deducted
- Charitable & activist funding: 1.25/10 points deducted
- Committed $25 million in August 2020 to LISC's Black Economic Development Fund, an impact investment fund for "Black-led financial institutions and community development efforts" (LISC, Aug 28, 2020). (source)
- ESG, activist investing & industry/regional boycotts: 2/10 points deducted
- New: Costco 8-K (filed Oct 16, 2026): the fiscal 2027 bonus plan, approved Oct 13, 2026, lets the CEO earn "$200,000 … relating to environmental and social metrics" and other executive officers "up to $80,000 … relating to environmental and social objectives based on quantitative performance metrics (including those concerning human capital and environmental-related areas)." ESG metrics in executive pay, in place. (source)
- China & foreign-adversary ties: 0/5 points deducted
- Election & voting-law activism: 0/10 points deducted
- Border & immigration enforcement: 0/10 points deducted
- Faith, family & children: 0/10 points deducted
- Climate & anti-fossil-fuel advocacy: 0.5/10 points deducted
- New: Costco's Climate Action Plan sets a goal of "a 39% absolute reduction in our operational emissions by 2030, compared to our 2020 base year," and Costco has "committed to operate with electricity from 100% clean energy sources by 2035." The board says the plan "is not now and never has been a net zero commitment for all emissions." Stated climate goal (minor item). (source; proxy)
- Second Amendment & lawful-firearms commerce: 0/10 points deducted
- Government-coordinated content moderation: 0/10 points deducted
- Abortion advocacy, benefits & funding: 0/10 points deducted
- American Workers & H-1B Displacement: 0/10 points deducted
Final verdict: Grade D
Grades run A (best) to F (worst) on a 0–100 scale, where a higher score is better: every company starts at 100 and loses points for each finding. Every finding links to its source. See how we rate for the scale and the category caps.
Shareholder votes at a glance
Costco's board opposed both recent shareholder proposals that asked it to study the risks of its DEI and climate programs. Shareholders sided with the board both times.
| Meeting | Proposal (proponent) | Board | For | Against | Abstain | Against, share of for and against |
|---|---|---|---|---|---|---|
| Jan 23, 2025 | Report on the risks of maintaining DEI efforts (National Center for Public Policy Research) | Against | 4,857,195 | 281,267,612 | 4,092,595 | 98.3% |
| Jan 15, 2026 | Greenwashing risk audit of the Climate Action Plan (National Center for Public Policy Research) | Against | 4,058,782 | 279,690,631 | 3,242,464 | 98.6% |
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How Costco's filings describe DEI, 2024 to 2026
| Filing | Filed | What it says |
|---|---|---|
| FY2024 10-K | Oct 9, 2024 | Section titled "Diversity, Equity and Inclusion": "We demonstrate leadership commitment to equity through consistent communication … support of diversity and inclusion initiatives within the organization, community involvement, and supplier inclusion." |
| 2024 proxy | Dec 11, 2024 | Fiscal 2024 executive bonuses include "metrics concerning diversity, equity and inclusion." |
| FY2025 10-K | Oct 8, 2025 | Section retitled "Inclusion": "We demonstrate leadership commitment to inclusion …" It keeps "support of diversity and inclusion initiatives" and "supplier inclusion." |
| 2025 proxy | Dec 4, 2025 | Fiscal 2025 bonus metrics described as "environmental and human capital metrics." |
| FY2026 10-K | Oct 7, 2026 | "Inclusion" section: "support of diversity and inclusion within the organization, community involvement, and supplier inclusion." |
| Fiscal 2027 bonus plan (8-K) | Oct 16, 2026 | Environmental and social bonus metrics "including those concerning human capital and environmental-related areas." |
Pressure from state attorneys general
On Jan 27, 2025, attorneys general from 19 states, led by Iowa and Kansas, wrote to CEO Ron Vachris asking Costco to end DEI policies they called unlawful, and to respond within 30 days (Iowa Attorney General).
On April 8, 2025, the Iowa Attorney General's office said Costco had "reaffirmed its commitment to not discriminating based on race," that the attorney general had raised concerns including "tying DEI metrics to executive bonuses," and that Costco said its team was "reviewing its policies to ensure that it is following the law" (Iowa Attorney General). Costco's next proxy, filed in December 2025, no longer named DEI among its bonus metrics. The Chief Diversity Officer and the Inclusive Community team remain in its FY2025 Sustainability Report.