• Companies have tread lightly this Pride month, as they brace for a divisive presidential election and are mindful of conservative public backlash against Target and Bud Light.
• Tractor Supply on Thursday said it would end all spending tied to diversity and environmental causes, including no longer sponsoring Pride festivals.
• But nonprofit advocacy group GLAAD CEO Sarah Kate Ellis said she's seeing more companies get involved in year-round philanthropy and activism instead of just flying rainbow flags during Pride month.

Pride month is winding down — and this year, the corporate world took a more cautious approach.

June tends to bring a wave of rainbow-themed merchandise and affirming ads and social media posts from retailers and consumers brands, coinciding with parades and other events that celebrate the LGBTQ+ community.

As the presidential election approaches, however, some companies have grown quieter about diversity, equity and inclusion efforts to avoid stepping into the culture wars or facing the blowback from conservative customers that Target and Bud Light did a year ago.

The starkest example of that came late Thursday: Tractor Supply, a retailer that sells animal feed, cowboy boots and lawn supplies in rural parts of the country, said it is ending all spending tied to diversity and environmental causes. That includes no longer sponsoring Pride festivals, the statement said.

The move, while an outlier in its magnitude, underscores how some companies that made inclusion commitments in recent years are treading cautiously.

It is difficult to track how many companies shared supportive messages, donated to LGBTQ+ causes or sold rainbow-themed merchandise in June compared to previous years. According to Gravity Research, a Washington, D.C.-based reputational research firm, 45% of Fortune 100 companies had at least one social media post on LinkedIn or X explicitly related to Pride as of June 21 this year, compared with 51% last June.

Gravity Research President Luke Hartig said the volatility of the presidential election and the two candidates' willingness to call out companies by name has also made companies less likely to go public about their stand.

"There's a little bit of like, 'keep our heads down while we go through this election,'" he said.

Tim Bennett, cofounder of Tribury Productions, a marketing company that specializes in reaching LGBTQ+ Americans, works with Fortune 500 companies, including recent projects with Procter & Gamble. He said more clients have taken "a wait-and-see" approach to marketing to LGBTQ+ consumers or decided to scatter efforts throughout the year instead of making a big splash in a single month.

"June this year has not been like the last five or six," Bennett said.

That may not be a bad thing for LGBTQ+ initiatives and charities. Sarah Kate Ellis, CEO of nonprofit advocacy group GLAAD, said she's seeing more companies get involved with year-round philanthropy and activism in more meaningful ways.

She also pointed to a survey by Gravity Research that found that 78% of companies did not plan to change their Pride strategy this year. Thirteen percent were unsure whether they'd make changes and 9% said they planned to revise their strategy. Gravity Research surveyed 45 corporate executives and Fortune 500 leaders across industries in April.

"The visibility of companies putting flags out and having product to celebrate our Pride and to mark a month that's really significant and important for our community is really important, and I don't want to ever devalue that," Ellis said. "I do think, though, those companies must look inside and make sure that they have the policies and the HR practices that match their outward marketing."

Major companies are still writing checks for LGBTQ+ causes, too. A GLAAD spokesperson said Friday that the group has not seen donations or corporate support decline this Pride month, though it does not yet have a total tally.

On Friday, when the Stonewall National Monument Visitor Center officially opened its doors to commemorate the New York City bar that was a catalyst in the LGBTQ+ rights movement, the event had major backing from the business community. Supporters included Google, Amazon, JPMorgan Chase and Booking.com.

President Joe Biden also made an appearance and remarks at the monument's opening.

The Bud Light and Target effect

Consumer staples brands were the most likely to say they planned to shift their Pride month strategy this year, according to Gravity Research's survey. That may stem from the conservative boycotts of Target and Bud Light last year.

Target has carried a Pride collection for over a decade. Yet last year, the big-box retailer removed some items and moved displays after employees faced threats. Boycotters targeted items for transgender shoppers, such as "tuck-friendly" swimsuits, and also criticized separate Pride merchandise for kids.

Instead of putting Pride merchandise in all stores this year, Target only carried it in the locations that accounted for 90% of total Pride sales in 2022 and 2023. It also stopped selling any Pride apparel for kids.

On the company's website and in those select stores, shoppers can find a wide variety of Pride-themed items.

The volume of negative feedback to the Pride collection externally and internally is "significantly lower" this year than in 2023, according to a Target spokesperson.

In a statement, Target said it is "committed to supporting the LGBTQIA+ community during Pride Month and year-round" and would participate in Pride events across the country and support LGBTQ+ groups, in addition to offering Pride products.

Anheuser-Busch InBev and other large beer brands, on the other hand, have backed away from public support of the LGBTQ+ community.

Conservatives like singer Kid Rock and Florida Gov. Ron DeSantis called for a boycott of the beer and its parent company, Anheuser-Busch InBev, after Bud Light sent personalized cans of its beer to transgender influencer Dylan Mulvaney. The marketing campaign coincided with the March Madness college basketball tournament.

Bud Light sales tumbled around 25%, and the brand lost its spot as the best-selling beer in the U.S., ceding the position it held for more than two decades to Constellation Brands' Modelo.

AB InBev distanced itself from Mulvaney and fired Bud Light's vice president of marketing. In October, AB InBev CEO Michel Doukeris said the brand would focus its marketing more on events like sports games and concerts. It also returned as the official sponsor of the UFC.

In recent months, some consumers have returned to Bud Light, as RBC Europe analysts estimate that the brand's U.S. volume is down only about 10% these days. For its part, Bud Light hasn't posted in support of Pride month on its Instagram or X pages this year.

The boycott was unusually sticky for a few reasons, according to Neil Reid, a geography professor at the University of Toledo who researches the beer industry. Studies have shown that consumers' loyalty to top-selling beers may be more tied to the brand than the taste, Reid said.

Right-wing news outlets like Fox News also devoted plenty of airtime to the controversy, stretching its duration and potentially reaching new consumers who missed the initial reaction. Plus, once Bud Light sales fell, retailers gave more shelf space to its rivals.

"You can look at this issue from a moral, ethical perspective or you can also look at it from a pure business perspective. Those two often don't result in the same strategy," Reid said.

Doubling down on diversity

While some companies have grown more cautious about promoting diversity efforts, others have stepped up inclusion initiatives. E.l.f. Beauty, for example, launched a provocative advertising campaign in mid-May called "So Many Dicks." The ads, which were on billboards in prominent places in New York City, highlighted that there are more men named Dick (including Richards, Richs and Ricks) than entire groups of underrepresented people. It also included video spots with athlete and social rights activist Billie Jean King.

The beauty brand is one of only four U.S. publicly traded companies with a board that's made up of members who are two-thirds women and one-third ethnically diverse.

E.l.f. Beauty CEO Tarang Amin said customers, especially its core audience of Generation Z shoppers, want brands to stand up for causes they support. He said he's noticed corporate leaders have grown more skittish about speaking up than they used to be.

"Our values are one of the things that really differentiates E.l.f. and what our community expects," he said.

Amin added: "If you don't stand up for what you really believe, and you're only going off of fear of what somebody may object to, I think you lose the opportunity of making a real difference in the world."

Amin said the company's stock performance shows its diverse board and inclusive messaging are also lifting its bottom line. Shares of E.l.f. are up about 46% this year, outpacing the approximately 15% gains of the S&P 500.

Pride initiatives continue this year elsewhere in the business world. Skittles sold a limited-edition Pride pack of its rainbow-colored candies like it has over the past five years. The brand, which is owned by Mars Wrigley, donates $1 for each Pride pack sold to GLAAD, up to $100,000 and matching donations of up to $25,000.

Macy's highlighted LGBTQ+-owned, founded and designed brands on the websites of Bloomingdale's, Bluemercury and its namesake brand in June. Over the past five years, the department store operator has raised more than $6.2 million for the Trevor Project, a nonprofit that supports suicide prevention for LGBTQ+ young people.

GLAAD's Ellis said she's encouraged by companies' continued support and said they "are going to be on the right side of history with this."

But she said there's work to do, especially to support the transgender community. Politicians across the country have proposed bills that restrict gender-affirming care and transgender rights.

Gravity Research's Hartig said companies have backed away from including transgender people in marketing after conservatives targeted them in political campaigns and during last year's Pride month.

But not all of the backlash against corporate diversity, equity and inclusion efforts has gained the traction activists would have hoped.

The number of shareholder proposals opposing environmental, social and governance initiatives has surged, according to ISS-Corporate, a Rockville, Maryland-based provider of data and analytics to corporations. Anti-ESG proposals have been voted on at meetings of Russell 3000 companies held between Jan. 1 and June 30 this year rose to 83, up from 55 in the same period in 2023 and 37 in 2022.

Yet voter support has fallen each year, to a median support rate of 1.5% in 2024, versus 1.7% in 2023 and 2.9% in 2022.

— CNBC's Amelia Lucas contributed to this report

Disclosure: CNBC is owned by Comcast NBCUniversal, which is one of the corporate sponsors of the Stonewall National Monument Visitors Center.