Coca-Cola Inc. KO has warned that revising its diversity, equity, and inclusion strategies could negatively affect the beverage giant’s business.

The warning comes in light of President Donald Trump’s executive order mandating federal contractors to comply with the ban on DEI programs, making it a crucial factor for companies operating in government-funded settings.

Coca-cola emphasized the importance of hiring a diverse and skilled workforce that mirrors the broad consumer base it serves globally.

As competition for employees increases, the soft-drink maker acknowledged that not being able to recruit essential talent, particularly individuals with expertise in artificial intelligence, digital marketing, and analytics, could impact its business.

“If we are unable to attract or retain specialized talent or top talent with diverse perspectives, experiences and backgrounds that reflect the broad range of consumers and markets we serve around the world, our business could be negatively affected,” the company’s filing has this statement under its risk factors.

The company noted that its success relies on its capacity to sustain a workforce that embodies a range of diverse perspectives and experiences.

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Also, increasing competition, elevated compensation demands, and a constrained labor market create substantial challenges.

Additionally, shifts in laws and policies may further complicate the recruitment of specialized talent. Coca-Cola cautioned that losing seasoned employees could diminish its competitive advantage and deplete valuable institutional knowledge.

President Trump imposed a 25% tariff on all imported steel and aluminum, applying universally without exceptions.

In response, Coca-Cola CEO James Quincey told investors during last week’s earnings call, “If aluminum cans become more expensive, we can put more emphasis on PET bottles.”

While he recognized that packaging costs are only a fraction of the company’s total expenses, he emphasized that the increase in aluminum prices remains a significant concern.

Recently, Coca-Cola reported fourth-quarter sales growth of 6% year-on-year to $11.5 billion and an adjusted EPS of $0.55, both above the consensus estimate.

The revenue increase included a 5% climb in concentrate sales and a 9% growth in price/mix.

Price Action: KO shares are trading higher by 0.51% at $70.40 at the last check Friday.

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