Ice Cream Wars
DO COMPANIES HAVE AN OBLIGATION TO ADVANCE THE COMMON GOOD?
Ben & Jerry no longer own their eponymous ice cream company, the global products company Unilever does, but nevertheless these founders of the company they no longer own recently voiced their support of Unilever’s decision to cease ice cream operations in Israel’s occupied territories. Their position was simple; they wrote, “business is among the most powerful entities in society…[and as such companies] have a responsibility to use their power and influence to advance the wider common good.” (We’re Ben and Jerry. Men of Ice Cream, Men of Principle. NYTimes 7/28/21).
This was too much for Times columnist Bret Stephens. He called Ben & Jerry’s statements “sanctimonious, inept and dishonest,” “cheap” and a “scam,” saying the problem is that “[N]othing is allowed to be ordinary anymore”: that when politics is a relevant consideration towards the products we choose to buy, or the companies we patronize, our world is a farce. Really?
DESPITE CONSENSUS CONDITIONS REMAIN ENTRENCHED
Popular support for reasonable gun control legislation approaches 90% - most Republicans support such legislation. If surveys are to be believed most people believe that climate change is real and that something needs to be done. Even Jamie Diamond, head of JP Morgan Chase, believes income inequality is a critical issue for this country, and he has said so for at least the last three years. But despite the majority of American’s agreeing income inequality is a profound issue income disparity has only gotten worse. Massive majorities agree on a host of issues but conditions remain entrenched.
Why with so much consensus on so many issues does change not happen? The answer - power protects power, and always works to preserve the status quo. Those in power want to stay in power. Those doing well economically want nothing to change. Change by definition upsets the apple cart and those doing well in society want no such thing, which leads to the key to effective change: harnessing the energy necessary to move the pillars that preserve power and maintain the status quo. Corporate power is such a pillar, but now That power is being exploited and the likes of Bret Stephens are apoplectic.
TIMES ARE CHANGING; COMPANIES MUST ALIGN WITH THEIR CUSTOMERS’ VALUES
All companies need to maintain existing customers and attract new ones. The problem for companies is their customers are now mobile, have choices, are making choices, and these companies are finding more and more that demands are being placed upon them that extend beyond them simply providing their goods and services. Remaining quiet on issues of importance to their customers is no longer tenable.
The multinational financial firm BlackRock, with over $9 trillion under management, is the world’s largest and most influential investment firm. For the past several years, BlackRock’s CEO Larry Fink has been arguing that companies must consider the needs and desires of a broad range of stakeholders, beyond just their investors. More than just “purpose” Fink argues that companies must provide leadership on important social, cultural and political issues including climate change and sustainability, racial and sexual justice, and diversity.
Larry Fink is not an altruist. He recognizes, that company stakeholders (customers, employees, suppliers, investors and society at large) have power, nascent power maybe but real nonetheless; that this power affords stakeholders the ability to demand something much more than just the delivery of a given product or service; that companies that fail to deliver when called upon by their stakeholders are companies at financial risk, and that the failure of a political system to produce results on issues embraced by massive majorities requires companies to step into the leadership vacuum and lead on these issues. This is why companies like Delta, Home Depot and Coca-Cola came out recently against Georgia’s proposed voter disenfranchisement laws. To not take a stand on this issue, enacted in the State where these companies are based, would have been a tacit endorsement of these laws and would risk alienating their core customers.
IF YOU ARE NOT PART OF THE SOLUTION, YOU ARE PART OF THE PROBLEM
What Ben & Jerry are saying is neither sanctimonious nor inept. They are recognizing a new reality. Stephens and others deride it as “woke.” The Krupp Steel Works in Germany, a private company, provided munitions to the Nazi regime during World War II. Business is not blind – unwoke - to politics, it is and has always been integral to politics and the workings of any organized society. Companies are actors in a political world. Ben & Jerry believe that Israel occupation of the West Bank is, consistent with the United Nation’s position, an illegal occupation. Conducting business, supporting the economic infrastructure, within the confines of the occupied area is an act that advances that occupation, in Ben & Jerry’s mind, and if the decision to cease operations in the West Bank is any indication then in the minds of Unilever’s customers.
EMBRACING IT AND MOVING FORWARD
Stephens argues that this is subterfuge, companies aligning with “trendy causes,” generating positive good will, while risking nothing to the bottom-line and enabling them to market products that serve no purpose other than, in Stephens’ words, causing obesity (as to Ben & Jerry’s Ice Cream). Fair enough. Companies should be challenged to make sure that we are getting more than mere lip service, that real action is being taken internally or within their operating environment to address real issues, like minority advancement, providing a living wage, improving working conditions, respecting their customers’ personal privacy and data. But that is part of the equation. That is where this is heading. This is the power that customers have, to make companies really accountable. This is the new reality and we embrace it.
