Tractor Supply warned climate change and a lack of diversity would hurt business. Now it’s ignoring those risks

By CNN Newsource

Published July 11, 2024 8:06 AM

By Nathaniel Meyersohn, CNN

New York (CNN) — As recently as February, Tractor Supply Co., known for selling animal feed, pet food and lawn and garden equipment to hobby farmers, told investors that climate change was a significant threat to its business.

Any delay or failure to meet its goals of cutting emissions 50% in six years and achieving net zero emissions by 2040 could hurt “public perception of our business, employee morale, customer or stockholder support” and its financial performance, the company said in its annual report.

Tractor Supply also warned that it could suffer similar business consequences if it did not meet its five-year diversity, equity and inclusion (DEI) plan to increase spending by 35% with diverse suppliers and boost representation of people of color at manager levels and above at the company by 50%.

Hal Lawton, the chief executive of the Brentwood, Tennessee-based company, had said these initiatives “make great business sense for Tractor Supply.”

But Tractor Supply has decided that all of those risks are now worth ignoring.

The company announced last month that it will withdraw its carbon emission reduction goals and eliminate jobs and goals focused on diversity, equity and inclusion. It will also stop sponsoring LGBTQ+ Pride festivals and voting campaigns, as well as submitting data to the Human Rights Campaign, one of the biggest LGBTQ+ non-profit advocacy groups in the United States.

By walking away from diversity and climate goals, Tractor Supply has become the latest corporate giant to retreat from progressive initiatives it once promoted, joining Bud Light, Target and others. Although the company’s changes have placated some customers, they have hurt its reputation with other customers and employees and could bring on the type of risks the brand recently warned about.

Tractor Supply is “trying to thread the needle,” said Nooshin Warren, a professor of marketing at the University of Arizona who studies corporate activism and corporate political culture. “They’re trying to keep both sides happy, which usually never happens.”

Tractor Supply, she noted, has become a more diverse company in recent years, and the company’s decision could alienate employees. Racial and ethnic minorities make up 18% of its approximately 50,000 employees and 33% of its board of directors, and it has earned strong ratings from the Human Rights Campaign for LGBTQ+ inclusive policies.

Tractor Supply’s reversal came after Robby Starbuck, who in 2022 launched a failed bid for Tennessee’s 5th Congressional District and now hosts a podcast, waged a weeks-long campaign on X calling on customers to boycott Tractor Supply and contact its corporate leadership over the company’s LGBTQ+ and DEI hiring initiatives.

“It’s time to expose Tractor Supply,” he first posted June 6, drawing attention to corporate components like “LGBTQIA+ events at work” and “a DEI council.”

Other conservative political candidates, activists and customers began criticizing the company on social media, and said they would stop shopping at the chain.

“We have heard from customers that we have disappointed them,” Tractor Supply said. “We have taken this feedback to heart.”

“Going forward,” Tractor Supply said, “we will ensure our activities and giving tie directly to our business.” The company said that although it’s ending DEI goals and carbon emissions goals, it will still ensure a “respectful environment” and focus on land and water conservation efforts.

But Tractor Supply’s reversal has already caused outcry.

The National Black Farmers Association, a non-profit advocacy group representing 130,000 Black farmers and their families, has called for Lawton’s resignation and said the company has “little respect for (Black) farmers.”

“They’re sending the wrong signal to America at the wrong time in history,” John Boyd, the president of the organization, told CNN. “America isn’t just white men. It’s made up a lot of different people. They have a lot of people they’re offending.”

Boyd, a fourth-generation farmer who is a Tractor Supply shareholder and customer and buys feed, mineral blocks and fencing frequently from the chain, said many Black farmers rely on Tractor Supply for their suppliers. He feels the company “caved to hard right-wing nonsense” and plans to stop shopping at the chain.

A Tractor Supply store manager in upstate New York who is gay resigned and told the town newspaper that the company “betrayed” employees and customers.

Tractor Supply declined to comment on these statements.

Tractor Supply’s customer base

Tractor Supply has a broad customer base.

The company has more than 2,400 stores in 49 states and targets recreational farmers, ranchers, animal and pet owners who primarily live in towns outside major metropolitan areas and in rural communities.

Rural areas tend to be more politically conservative than urban areas. In 2020, Republican candidate Donald Trump won 65% of rural voters, according to Pew. But suburban areas are more politically divided — in 2020, Democratic candidate Joe Biden won 54% of suburban voters.

Tractor Supply’s customer base has historically been primarily older men, who lean Republican, but Tractor Supply has increasingly tried to draw Millennials and women, who tend to favor Democrats. Since the pandemic, the company has gained ground with younger consumers who moved out of cities.

“Customer demographic trends continue to trend younger and more female than pre-pandemic,” Lawton said last year.

Tractor Supply’s reversal could hurt it with these customers, who could be crucial as the company’s historic base ages out of the market.

“Tractor Supply Co. is turning its back on their own neighbors with this shortsighted decision,” Eric Bloem, vice president of Programs and Corporate Advocacy at the Human Rights Campaign, told CNN in a statement Saturday. “LGBTQ+ people live in every zip code in this country, including rural communities. We are shoppers, farmers, veterans and agriculture students.”

Squirrelwood Equine Sanctuary, a New York animal sanctuary that says it spends more than $65,000 annually at Tractor Supply, said it plans to stop shopping at the chain.

“We never asked for a pride flag out front. We do expect respect and inclusion. You have lost our business and every shred of respect we might have had,” the non-profit said on X.

Corporate America’s retreat

Particularly after the May 2020 murder of George Floyd by a Minneapolis police officer, companies rolled out policies aimed at diversifying their workforces and welcoming customers from all backgrounds.

But Tractor Supply’s reversal is part of a larger corporate retreat on DEI programs and environmental goals.

Many of these efforts are now under attack from right-wing activists, businessmen such as Bill Ackman and Elon Musk, and others.

The backlash also comes amid a wave of legislation in Republican-led states to curtail LGBTQ rights and cut DEI programs in colleges and universities, alongside lawsuits to stop 401(k) managers from considering climate change and other environmental, social and governance (ESG) factors when selecting investments.

Right-wing groups have threatened boycotts against brands like Bud Light, Disney and Nike to roll back their inclusivity efforts. They’ve even gone after Chick-fil-A for its diversity programs and Cracker Barrel for selling plant-based sausages, brands traditionally seen as conservative.

Last year, Bud Light’s partnership with transgender influencer Dylan Mulvaney sparked an anti-trans backlash and a months-long boycott of the beer brand, throughout which the company failed to take a firm stance in support of Mulvaney and the transgender community. The boycott and the subsequent tepid response lost parent company Anheuser-Busch InBev as much as $1.4 billion in sales, as well as its credibility with a major LGBTQ+ non-profit.

Last month, retailer Target said it will limit how many stores would carry its Pride-themed collection for adults after a boycott from right-wing activists last summer led to a sharp dip in sales.

Many companies are “turning back,” said Nooshin Warren from the University of Arizona. “It seems that retracting is now the trend.”

CNN’s Eva Rothenberg contributed to this article.