A new study meant to reassure corporations about diversity, equity, and inclusion programs has delivered an awkward finding for DEI advocates: Keeping the programs produced no measurable financial advantage over abandoning them.

Researchers at the University of California in Berkeley compared S&P 500 companies that maintained DEI after President Trump’s January 2025 executive order with companies that scaled back their commitments. Firms that kept their programs performed about as well in stock returns and revenue as those that retreated.

Whether a company favors DEI or rejects it, executives cannot assume that a politically popular label will protect conduct that violates anti-discrimination law.

The authors and sympathetic news coverage emphasized the other half of that result: Companies could keep DEI without suffering a significant financial penalty. CBS News framed the finding that way, as did a subsequent Forbes analysis. But the conclusion cuts both ways. If companies paid no price for keeping DEI, they also paid no price for dropping it.

For investors, that raises a straightforward question: Where is the financial return from DEI?

The researchers found no statistically significant revenue or stock market advantage from maintaining the programs during the period they examined. Their paper reports an estimated effect on revenue close to zero. That does not prove every DEI initiative is worthless. It does mean this study offers no measurable payoff for the policies its authors defend.

DEI advocates have spent years insisting that diversity improves the bottom line. McKinsey’s influential reports linked leadership diversity with financial outperformance. But a 2024 reanalysis of its findings failed to reproduce statistically significant relationships using U.S. public-company data. A 2025 review found the broader empirical case considerably less certain than the confident corporate sales pitches suggest.

Companies that believe particular DEI practices improve performance should identify those practices and produce evidence that their gains are real and repeatable. The obligation to prove the promised return belongs to the people making the promise.

Even a demonstrated financial benefit would not settle whether a practice is ethical or lawful. The moral defense of DEI deserves scrutiny too. A corporate policy that uses race or sex to distribute opportunity may generate its own grievances, regardless of the language used to promote it.

Employment discrimination complaints have hardly disappeared. The Equal Employment Opportunity Commission received 88,201 new charges in fiscal year 2025, roughly level with the previous year and substantially above 2021. Those figures alone cannot tell us how many complaints involved DEI. They do underscore why employers should examine the legal consequences of their hiring and promotion rules.

The Berkeley paper also reveals an unmistakable political perspective. It refers to the Trump administration as a “regime,” discusses what its authors regard as “democratic erosion,” and describes the deaths of Trayvon Martin, Michael Brown, and George Floyd collectively as “murders.” It suggests that organized corporate resistance can hinder the consolidation of executive power.

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Those judgments do not, by themselves, invalidate the statistical analysis. They do help explain the argument the authors want their findings to support: Corporations should feel free to maintain DEI as an expression of political and moral commitment, even without a measurable financial gain.

But companies face risks beyond the market response measured in the study. Public controversy can damage a brand, and legal enforcement can carry a steep price.

Consider Cracker Barrel’s 2025 rebranding backlash. Critics connected its logo redesign to broader complaints about the company’s “woke” direction. By mid-September, its shares had fallen nearly 16% since the August announcement, customer traffic had weakened, and the company had reversed course. A logo controversy is not a controlled test of DEI policy. It is a reminder that political and cultural backlash can have financial consequences.

The federal government has supplied a more direct warning. In April, IBM agreed to pay more than $17 million to resolve Justice Department allegations involving discriminatory employment practices and federal contracting. Deloitte settled for $21.5 million in August, and Accenture agreed to pay $25 million in September to resolve similar allegations. The settlements resolved government claims without findings of liability, but the costs were real.

The Justice Department also issued guidance outlining its view of unlawful discriminatory practices tied to federal funding. Whether a company favors DEI or rejects it, executives cannot assume that a politically popular label will protect conduct that violates anti-discrimination law.

The Berkeley study shows that companies maintaining DEI suffered no detectable financial penalty in the period examined. It also fails to establish a financial reward. Advocates who want shareholders, employees, and customers to support these programs still owe them a case grounded in performance, ethics, and law. That case cannot rest on assurances that DEI is harmless.