Four years after the death of George Floyd, we’re finally starting to see the ramifications of appeasing the progressive activist class.

The push for DEI peaked in the year following the 2020 riots, and every Fortune 1000 company had to choose whether to buy into the zeitgeist of race politics or weather the storm. Daring to defend a fiduciary model and focus on shareholder value instead of activist feelings at the time would have meant negative press coverage, nonsensical but high-volume accusations of workplace bias, and the full wrath of the self-described antiracist intelligentsia. Perhaps it’s no surprise that many companies capitulated—and in major fashion. Fortune 1000 companies pledged more than $340 billion to causes and organizations perceived as helping to solve America’s race woes. As I pointed out at the Daily Wire several weeks ago, this was “more than the entire 2024 budget of the Department of Education.”

Among the capitulating companies was activewear retailer Lululemon. “We will support and fund Inclusion, Diversity, Equity, and Action within our organization,” it posted in June 2020 after an incident where its employees reported being “triggered and traumatized” by a project manager who suggested the company not put the phrase Black Lives Matter on the company’s homepage. Lululemon was facing activists both outside and from within, hearing from employees who believed that receiving feedback on a work project counted as racial trauma.

Subsequently, as reported by the Claremont Institute’s BLM Funding Database, the company pledged $300,000 to groups including Black Lives Matter, the NAACP, and Reclaim the Block. You’ve probably heard of BLM and the NAACP, but not so much about Reclaim the Block. RTB was a Minneapolis grassroots organization formed in 2018 as a “coalition to demand that Minneapolis divest from policing and invest in long-term alternatives.” That’s activist speak for defunding the police, specifically the Minneapolis Police Department. RTB successfully lobbied for a $1.1 million divestment, with funds being redirected to community programs and “race and equity support.” Less than two years after defunding their police department, Minneapolis would descend into mob violence—and Lululemon would pledge hundreds of thousands of dollars to an organization that helped make it happen.

Companies that become politicized don’t do so in a vacuum. As with many business decisions, it’s the result of an in-depth cost-benefit analysis. In mid-2020, companies were being led to believe that appeasing racial activists was an easier path forward than trying to defend business as usual. Yet, as my employer, Bowyer Research, engages with hundreds of companies, we often find that concessions made to ESG and DEI activists almost never end with those activists going away. Instead, they result in snowballing—“create a DEI task force” becomes “change the racial/gendered makeup of your board without cause,” and “monitor carbon emissions” becomes “stop doing business with fossil fuel companies,” and so on. An initial corporate decision to placate activists often grants the false premise that activists, not shareholders, get to set the tone of a company’s outlook.

But activists in Minneapolis don’t eat the cost of what Lululemon does or doesn’t do in terms of racial justice: Lululemon shareholders, employees, and customers do. And as such, activist demands often don’t reflect the interests of the company—at best, they’re not as successful as decisions made explicitly for value creation, and at worst, they create problems. Which is exactly what happened when companies like Lululemon tried to appease the anti law-and-order activists in the latter half of 2020.

In 2023, Lululemon caught heat over a shoplifting incident in one of its stores. To be clear: two Lululemon employees yelled at people stealing merchandise and were fired without severance in keeping with the store’s zero-tolerance policy for engaging with shoplifters. CEO Calvin McDonald laid out Lululemon’s perspective: “It’s only merchandise,” a wonderful sentiment from a chief executive expressly tasked with stewarding property for shareholder return. As my boss Jerry Bowyer wrote at the time, Lululemon had bought into riot ideology, the idea that public disorder is the fault of the system and only solvable by public spending: “No one is harmed more by that ideology than the poor and working class. It’s a shame that two employees, now unemployed, could see that so much more clearly than the CEO of the company.”

In 2023, I and other members of Bowyer Research attended Lululemon’s annual board meeting and asked McDonald about the connection between the company’s burgeoning shoplifting problem and its financial support for anti law-and-order organizations a few short years prior. “What precisely is the company’s policy on looting, shoplifting, and other forms of stealing property which belongs to the shareholders?” we asked. “According to the Claremont Institute, you have pledged a substantial amount of shareholder resources to the BLM Foundation and related groups. Given that some of these groups encourage not just protesting but looting, can you clarify exactly what you, the CEO, think about acts of larceny of company property?”

McDonald copped out, only telling us that Lululemon had a longstanding relationship with law enforcement and defended the company’s zero-tolerance policy about engaging with shoplifters. But the shoplifting problems would only get worse in the coming year. McDonald’s right that the company has a “longstanding relationship” with law enforcement—but most of that relationship seems to be law enforcement recovering stolen Lululemon merchandise. Here’s a sampling of how things are going for Lululemon on the shoplifting front:

Women stole $338K of Lululemon merch in thefts from Bellingham to L.A., charges say

Lululemon thefts: 4 women arrested after stealing over $10,000 worth of items in Lower Merion Twp

Two men charged in $3,000 retail theft from Lululemon in Upper Dublin, police say

Police recover $23,000 in Lululemon leggings following theft from Napa store, Oakland crash

Since pledging a quarter of a million dollars to racial justice and activists with a questionable-at-best relationship with law and order, Lululemon has found itself being targeted by everyone from smash-and-grab looters to literal organized crime. That’s not to say it’s a one-for-one causal relationship—shoplifting has been a reality since there were shops to rob. But at some point, if a company donates enough money to organizations that oppose law and order, it owes it to shareholders to think about not only the effect such support is having, but the message being sent about the value of your merchandise, the political neutrality (or lack thereof) of your company, and the seriousness with which you take your fiduciary responsibility.

It seems that Lululemon has begun thinking more seriously about these questions. When we attended the company’s annual meeting this year, the tone was very different.

“Why is Lululemon donating to pro-looting organizations like Black Lives Matter and pro-police defunding organizations like Reclaim the Block?” we asked. “Isn’t it in the interest of shareholders to defend law and order, particularly in regards to merchandise?”

And Lululemon answered: “We are not currently making donations to these orgs.”

This is a step in the right direction for Lululemon. Let’s go back to that idea about cost-benefit analysis. During the summer of 2020, activists convinced America’s biggest companies that it was easier to climb on the DEI/racial justice hype train then get branded as being racist. But now, that hype train’s having problems—now is our moment.

As corporate attitudes about DEI and ESG shift toward the negative, it’s time for the advocates of fiduciary responsibility and shareholder capitalism to point out that it’s always been the rational argument to eschew politics and making donations to radical activist groups in favor of creating value for shareholders. Maybe next time it won’t take four years and hundreds of thousands of dollars in stolen merchandise to prove that point.