Corporate social irresponsibility within Ben & Jerry's - opinion

In July 2021, Ben & Jerry’s “Independent” Board announced their decision to boycott Israel and cease their relations with American Quality Products (AQP) and its owner, Avi Zinger.

 Ben & Jerry's Ice Cream Factory Waterbury, Vermont (photo credit: FLICKR.COM)
Ben & Jerry's Ice Cream Factory Waterbury, Vermont
(photo credit: FLICKR.COM)

Corporate social responsibility (CSR) is a form of self-regulation that reflects a company’s commitment to be socially accountable to itself, its stakeholders, and the public. CSR’s purported goal is to contribute to the well-being of communities through a positive impact on all aspects of society, including economic, social and environmental. While critics question CSR’s lofty and sometimes unrealistic expectations and view it as mere “window-dressing,” its appeal and overall goal are easy to understand.

However, what happens when CSR becomes Corporate Social Irresponsibility?

In July 2021, Ben & Jerry’s “Independent” Board announced their decision to boycott Israel and cease their relations with American Quality Products (AQP) and its owner, Avi Zinger, who has been representing them there for over 30 years. The board consciously succumbed to the BDS campaign, singling out the Jewish state for economic, cultural and academic strangulation. A press release on their behalf stated that Ben & Jerry’s operation in Israel was “inconsistent with their values.” This decision led to severe backlash.

What exactly are those values? When – and how – should these “values” be “activated” in a business environment, and to what extent? If the answer is not clear to you, don’t feel like you’re alone. In an interview with Axios shortly after the announcement, the co-founders of Ben & Jerry’s themselves, Ben Cohen and Jerry Greenfield, who supported the company’s decision, seemed baffled by the very same question.

During the interview, Axios’s Alexi McCammond questioned the two: “You guys are big voting rights proponents. Why do you still sell ice cream in Georgia? Texas – abortion bans. Why are you still selling there?” 

 aA refrigerator bearing the Ben & Jerry's logo is seen at a food store in the Jewish settlement of Efrat July 20, 2021. (credit: REUTERS/RONEN ZEVULUN) aA refrigerator bearing the Ben & Jerry's logo is seen at a food store in the Jewish settlement of Efrat July 20, 2021. (credit: REUTERS/RONEN ZEVULUN)

“I don’t know,” Cohen answered and laughed with embarrassment. “I think you ask an excellent question. And I think I’d have to sit down and think about it for a bit.” He added, “By that reasoning, we should not sell any ice cream anywhere. I’ve got issues with what’s being done in almost every state and country.”

How should a decision be made on such issues, and by whom?

Especially as they pertain to a complicated conflict such as the one in the Middle East. The demand made by Ben & Jerry’s of Zinger not to sell in certain areas of Israel and the Palestinian territories would have put Zinger in violation of Israeli law prohibiting such boycotts. Moreover, the negative implication of their decision would mean hundreds of families, and thousands of people, losing their livelihoods. Are those the actual values of Ben & Jerry’s?

Over the years, Zinger has been the poster child of what Ben & Jerry’s loved to see as a manifestation of their social conscience. He was the first manufacturer in Israel who conducted his business according to the principles set forth by Fairtrade International. He has supported many co-existence projects over the years between Israelis and Palestinians. As a result of Ben & Jerry’s inexplicable move last year, Zinger had to drop his financial and professional support from these endeavors, thus undermining the very cause Ben & Jerry’s supposedly uphold themselves. 

But the question at hand exceeds only the moral one. In the months following Ben & Jerry’s announcement, lawsuits were filed over the illegal termination of their contract with Ben & Jerry’s Israel. Additionally, multiple US states began divesting pension funds from Unilever, including New York and Illinois (where boycotting Israel is unlawful). As a result, Unilever’s stock suffered a significant blow in the financial markets. 

In June 2022, Unilever announced it settled with Zinger and stated it “rejects completely and repudiates unequivocally any form of discrimination or intolerance.” The company added that “antisemitism has no place in any society. We have never expressed any support for the Boycott Divestment Sanctions (BDS) movement and have no intention of changing that position.”

BUT THE story did not end there. The “Independent” Board in Vermont was quick to take the unprecedented and legally questionable move of suing its parent corporation to keep its illegal and harmful ban on Israel. They based their claim on a somewhat strange and unique clause in both companies’ Merger Agreement of 22 years ago, providing the “Independent Board with ‘primary responsibility’ over the Ben & Jerry’s Social Mission and brand integrity.”

They further claimed that, “If left unaddressed, Unilever’s actions will undermine our social mission and the essential integrity of the brand, which threatens our reputation, and ultimately, our business as a whole.” 

But the truth of the matter is the exact opposite. It was the board’s ill-made decision that undermined the company’s social mission and integrity, and it was their decision that threatened the business as a whole, causing the company almost irreparable damage.

Ben & Jerry’s attempt to undermine Unilever’s agreement with Zinger failed and the court rejected their claim. It is further evidence of the lack of good judgment by the Independent Board. They had shown a lack of character and misjudgment by being duped into supporting BDS. Their decision was morally wrong, and its impact continues to damage and blur whatever “social mission” the company may profess to stand for.

Yet, beyond the social mission, we must contend with the question of the financial damages suffered by every shareholder as a result of the board’s unfortunate decision. The current legal proceedings allow Unilever to set boundaries for the board and define the scope of its “independence.”

Furthermore, these proceedings open the door for a more significant discussion, which should draw a line between dangerous shenanigans and CSR and finally answer a few fundamental questions: under what circumstances should a company be allowed to undermine its shareholders financially? How should it be done? By whom and on what terms and conditions?!

The writer is a former spokesperson of Israel’s Consulate General in NY, a strategic consultant and senior vice president at the JBS-Jewish Broadcasting Service.