Retail giant Target has been hit with a shareholder lawsuit alleging that the company misled investors about the risks associated with its Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Governance (ESG) initiatives.
The legal action, led by the City of Riviera Beach Police Pension Fund in Florida, claims that Target concealed the potential for consumer backlash, which ultimately resulted in declining stock prices and significant financial losses.
The proposed class action, filed in the U.S. District Court for the Middle District of Florida, accuses Target, CEO Brian Cornell, and other executives of failing to disclose the risks linked to their social initiatives. Plaintiffs argue that shareholders unknowingly paid inflated prices for Target stock and that company management misused investor funds for social and political causes without proper disclosure.
A major point of contention is Target’s May 2023 Pride Month campaign, which faced intense backlash, including in-store confrontations that led to employee safety concerns. The lawsuit contends that Target’s failure to acknowledge these risks contributed to a 22% decline in share value on November 20, 2024, erasing approximately $15.7 billion in market capitalization.
Target’s financial struggles reportedly contrast sharply with the performance of competitors like Walmart, which avoided similar backlash. The lawsuit asserts that Target’s management did not adequately address the impact of consumer boycotts, leading to shareholder losses.
The legal filing follows Target’s January 24, 2025, announcement that it would be discontinuing its DEI initiatives, including a program designed to support Black-owned businesses. This decision aligns with similar moves by major corporations like Walmart and Amazon, which have been reducing DEI-related programs amid growing conservative opposition, including from President Donald Trump.
Target has not yet responded to requests for comment regarding the lawsuit. The case, City of Riviera Beach Police Pension Fund v. Target Corp et al., seeks damages for shareholders who held Target stock between August 26, 2022, and November 19, 2024.
