Target Faces Lawsuit Over Alleged Concealment of ESG Risks
Shareholders of Target Corporation have filed a proposed class action lawsuit alleging that the company concealed the risks associated with its diversity, equity, and inclusion initiatives, resulting in a backlash that caused customer defections and a significant decline in its stock price.
The lawsuit, filed in federal court in Fort Myers, Florida, claims that Target, CEO Brian Cornell, and other executives failed to disclose the potential for consumer boycotts stemming from the company's Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) initiatives.
Specifically, the complaint alleges that Target concealed the backlash from its May 2023 Pride Month campaign, which led to the removal of LGBTQ-themed merchandise after confrontations in stores. The lawsuit also cites Target's disappointing profit and holiday sales forecast in November 2024, which resulted in a sharp drop in its share price, eroding approximately $15.7 billion in market value.
The plaintiffs argue that Target's underperformance contrasts markedly with the results of its rival, Walmart, and reflects the ongoing backlash against its campaigns.
The lawsuit seeks damages for Target shareholders from August 26, 2022, to November 19, 2024. It follows Target's announcement on January 24 that it would discontinue its DEI initiatives, including a program supporting Black-owned businesses.
Target has not yet responded to requests for comment.
Case: City of Riviera Beach Police Pension Fund v Target Corp et al, U.S. District Court, Middle District of Florida, No. 25-00085.