Posted on April 25, 2023

Walmart Faces Racial Equity Audit Shareholder Proposal

Ben Maiden, Corporate Secretary, April 18, 2023

The SEC has denied a request from Walmart that the retailer be given the green light to exclude a shareholder proposal seeking a racial equity audit.

Proposals asking companies to have an outside party conduct such audits have taken off since they were first filed in 2021. Resolutions initially targeted major financial services firms but a wider range of companies are now facing requests.

United for Respect (UFR) has filed a proposal with Walmart requesting that the company ‘conduct a third-party, independent racial equity audit analyzing Walmart’s adverse impacts on black, indigenous and people-of-color communities, and to provide recommendations for improving the company’s racial equity impact. Input from employees, customers and racial justice, labor and civil rights organizations should be considered in determining specific matters to be analyzed.’

UFR bills itself as a multiracial, national non-profit organization ‘fighting for big and bold policy changes that improve the lives of people who work in retail.’

In its supporting statement, the group writes: ‘While Walmart has made charitable contributions and statements of solidarity with communities of color, it must do more to address significant adverse impacts of its policies and practices on those communities. Several aspects of Walmart’s business suggest a racial equity audit would help mitigate reputational, regulatory, legal and human capital risk.’

UFR adds: ‘Given the demographics of Walmart’s hourly workforce, shareholders want to ensure [the company] is not contributing to or exacerbating broader racial inequities. Failure to effectively address racial inequities in its operations exposes stakeholders, including employees, to unacceptable abuses and exposes Walmart to risks that may ultimately affect shareholder long-term value.’


In response, Walmart sought no-action relief from the SEC if it omitted the proposal on the grounds that, per Rule 14a-8(i)(12)(i), the resolution ‘addresses substantially the same subject matter as a previously submitted shareholder proposal that was included in the company’s 2022 proxy materials, and the previous proposal did not receive the support necessary for resubmission.’