Lessons From Bibi & Jerry’s Political Crunch

What are the limits to conscious capitalism? Companies increasingly feel compelled to take political positions, but what are the limits once you engage?

When I first saw the headlines of Ben & Jerry’s weighing in on the occupied West Bank—that they would stop selling their ice cream in the occupied territories because it “wasn’t consistent with their values”—I knew there would be lessons in conscious capitalism. I just didn’t expect to react so critically. I learned long ago as an undergraduate that trying to unwind Israeli-Palestinian politics was a Rubik’s Cube inside of a Gordian Knot with gloves on.

While I make most of my own ice cream, I have nonetheless been a fan of Ben & Jerry’s products and their social brand position for over 40 years. But the more I read about their position, the worse it gets. As the late former British Labour Chancellor Denis Healey used to say, “When you’re in a hole, stop digging.”

Corporate social activism is not new, though with notable exceptions over the past 250 years, it has largely been a third rail for most companies. The combination of today’s political divisiveness and ESG movements have increasingly forced an escalating number of companies out of their cones of silence. As I have written before, “corporate neutrality is dead.”

Cultural leadership—especially visionary leadership ahead of its time—is neither easy nor without its severe critics. Most people, CEOs understandably included, are intimidated enough by the slings and arrows of the present to reflexively avoid helping to shepherd in the future, especially when it is outside of the corporate purpose.

When Al Jazeera asked me to come on air to opine on Ben & Jerry’s, I did so with, as Lyndon Johnson would say, a “heavy heart.” Try as I might, I couldn’t find in Ben & Jerry’s a Profiles in Courage that would provide leadership rules for other companies navigating the new age of conscious capitalism.

However, by reverse engineering the Ben & Jerry’s decision, we have been able to identify a number of pitfalls for companies to avoid:

• Don’t drink the Kool-Aid

It’s as if Ben & Jerry’s own history of successful and laudable social activism—sustainable agriculture, paying a living wage, donating proceeds to charity and speaking out early and powerfully on Black Lives Matter to name just a few—blinded them to the dangers of this issue.

Each and every issue a company takes a stand on—and for most companies, that should be an exceptionally short list—needs to be first viewed in a vacuum. How does this issue impact us as a singularity? Then examine it in the full body of evidence of the entire company’s positions, present and past as well as where the larger society is at the time.

Don’t assume that because you have gotten it right every time before you will again. As they say in the finance industry, “Past performance is no guarantee of future results.”

• Where’s the nexus?

Delta Airlines briefly—and loudly—got in trouble in Georgia on the voter suppression legislation because they had weighed in during the legislative drafting phase in an attempt to limit some of its provisions, and this made it appear as if the Georgia-headquartered airline had supported the suppressive intent of the legislation. Their subsequent leadership in strongly opposing the law immediately thereafter had a geographic nexus—they are the largest employer in Atlanta.

For Nike, embracing Colin Kaepernick over one of their largest clients—the NFL—had nexi both in that they stayed in the world of sports and second, that Colin Kaepernick is where the market is going. They accurately predicted the market, as they have so many times, with women’s, LGBTQ and disabled athletics. Their shareholders, along with our collective consciousness, have all benefited.

For Starbucks, responding so well to the improper arrest of two African American men in one of their Philadelphia stores in 2018 was consistent with their brand to be the “third place”—neither home nor office where people, everyone, were welcomed to gather.

In all of these examples these companies understood both their brand and its social halo. They went neither too small nor too large.

Where’s the nexus for Ben & Jerry’s?

• What is your socially conscious brand?

We have started to accept—and in some cases, demand—that companies increasingly have socially conscious brands. Hobby Lobby and Chick-fil-A on the more conservative side of the ledger. Apple and Bosch, with their “Yallah!” initiative supporting young Muslims who are trying to drive change in their communities, on the more progressive side of the scale.

Ben & Jerry’s, with their decades of conscious capitalism, have helped to pave the way for these and hundreds of other companies. But where is the connection to Ben & Jerry’s socially conscious brand? It doesn’t fit into sustainable agriculture. Or environmental stewardship. Or fairly-paid employees and supply chain workers. Or domestic politics. Or even fun. It is as if Henry Kissinger had to stop by South Burlington on his way to Beijing to help open China to the West.

• Does it have to be public?

Why did Ben & Jerry’s publicly announce its pull out of the occupied territory? Companies make expansion and contraction decisions all the time. Why did they want to make this so public? Rather than the change-agent activity we have come to expect from Ben & Jerry’s, it feels more like virtue signaling.

• What have you done for me lately?

While I will not step on this bandwagon, it is interesting that Ben Cohen and Jerry Greenfield’s Judaism has not protected them from complaints of antisemitism. The company sells in 32 countries, including a number with increasingly authoritarian and repressive governments. Why start with the West Bank?

Ben & Jerry’s has the good fortune of their timing that this occurred post-15 years of Benjamin “Bibi” Netanyahu’s Israel, which means that the U.S. Jewish community does not speak with as much of a singular voice as it did when Golda Meir was the Prime Minister in the 1970s. Nonetheless, Ben & Jerry’s has succeeded in unifying a large portion of American Jewry in their criticism.

What is viewed as certainty by some can be seen as arrogance by others.

• Is it a foreign policy issue?

For multinational companies, all the world is domestic—Coca Cola helped provide clean drinking water for refugees in the Middle East as just one of thousands of examples—but these companies universally stay away from publicly weighing in on disputed foreign policy issues.

A good rule of thumb on foreign policy issues is to do it as a part of a larger movement, not as an individual company. The anti-apartheid divestiture movement of the 1980s offers a playbook for how to take on challenging foreign policy issues. It provided companies with the power of numbers, where they did not have to stand alone. Sign a pledge, divest over time, make it part of a movement, not your own CSR.

• Past is prologue.

In Washington, DC, where I live, there is an old saying, “No one wants to be first but everyone wants to be second.” Let others take the risk so you can see the pitfalls. And yet, just two years ago it took only months for Airbnb to reverse its ban on West Bank settlement listings. The company became mired in multiple legal actions and critical media.

Similarly, just days after its announcement, Ben & Jerry’s has already been notified by two states—Texas and Florida—that they are examining the new policy to see if it violates their states’ anti-boycott laws. It might also impact the ability of Ben & Jerry’s, and their parent, Unilever, from bidding on state contracts. There are 28 other states with similar laws impacting their pension funds. There is little question that Texas and Florida would use these laws for political purposes, but then again, with such an obvious and anticipatable reaction, why would you risk it?

Milton Friedman’s doctrine that, “The social responsibility of business is to increase its profits” may be increasingly outdated but so is its inverse. The purpose of corporate social responsibility is not to administer self-inflicted wounds.

• Do you have internal buy-in?

After Unilever CEO Alan Jope released the parent company’s own statement that said Unilever “remains fully committed to our business in Israel,” Ben & Jerry’s Board Chair Anuradha Mittal (Ben & Jerry’s has a separate board) publicly called the Unilever statement “deceit” and added “I can’t stop thinking that this is what happens when you have a board with all women and people of color who have been pushing to do the right thing.”

Ouch.

Ben & Jerry’s has been grappling with the West Bank issue for nearly a dozen years. They didn’t have time to game this out with Unilever? Especially an action which now exposes the parent company to legal action and consumer discontent in the U.S. and Israel?

• What’s the brand risk?

Ben & Jerry’s has and deserves its remarkable position as one of the most socially conscious brands in the world. Most people still think of them as “Ben & Jerry’s,” not “Ben & Jerry’s, a high-fat, high-sugar subsidiary of Unilever.” Unilever is a $60 billion company with over 400 brands—a polar opposite of the Vermont hippy brand the company has so carefully polished for decades. Why pick a public fight that risks changing this hard-earned perception?

• How will the market respond?

This isn’t a fair judge as the market is fickle and ground lost can quickly be regained. It is also often used as an excuse not to be courageous. But Unilever’s stock is down over four points since the announcement and while much of it can be attributed to rising costs emerging from Covid-19, it raises questions about how much the Ben & Jerry’s board was thinking about the parent company.

The crossroads of capitalism, democracy and theology are thorny ones and there will be many more mistakes before we settle on the floor and ceiling of conscious capitalism. Unfortunately, neither Ben & Jerry’s decision nor the apparent way they went about it will provide much useful guidance except for what not to do.

On the Ben & Jerry’s website they end their West Bank statement with the following line: “We will share an update on this as soon as we’re ready.”

We’re ready.