July 8, 2022 | The Wall Street Journal
Earth to Executives: Boycotts of Israel Backfire
Letter to the Editor
July 8, 2022 | The Wall Street Journal
Earth to Executives: Boycotts of Israel Backfire
Letter to the Editor
In “Boycotting Israel Isn’t Free Speech” (op-ed, July 6), Eugene Kontorovich argues that the boycott, divestment and sanctions (BDS) campaign against Israel is losing. He’s right, but some C-suites can’t seem to learn.
Ben & Jerry’s boycott of Israel cost its parent company dearly. Several U.S. states invoked anti-BDS laws, divesting hundreds of millions of dollars in state pension funds from Unilever.
Newspaper ads and rallies urged Unilever to reverse course. State attorneys general fired off letters. Lawmakers urged the SEC to investigate. A shareholder filed a class-action suit. Ben & Jerry’s Israel sued to prevent the termination of its three-decades-old license.
Chaos ensued in Unilever’s boardroom. Top investor Terry Smith blasted the company for losing its focus. Activist investor Nelson Peltz joined the board. An ice-cream boycott of Israel had become a brain freeze that Unilever could no longer endure.
The company settled the lawsuit with its Israeli licensee, overriding its subsidiary and selling off the rights to distribute Ben & Jerry’s throughout Israel in perpetuity. In its reversal, Unilever denounced anti-Semitism and BDS.
Unilever’s about-face parallels Airbnb’s ill-conceived 2018 boycott of Israel, which ended with a similar reversal after the company faced state blacklisting threats and litigation.
The next C-suite set to learn the lesson the hard way? Chicago-based financial-research giant Morningstar, whose ESG research subsidiary Sustainalytics appears to use the BDS playbook to produce negative ratings of companies connected to Israel. A new analysis finds that Sustainalytics relies heavily on deeply flawed, anti-Israel sources to produce ESG ratings and research, and automatically finds companies involved in parts of Israel’s economy to be complicit in human-rights abuses.
We know how Morningstar’s movie will end. The story of Unilever should serve as a case study for C-suites before they damage their businesses by indulging the BDS mob.
David May is a senior research analyst at the Foundation for Defense of Democracies, where Richard Goldberg is a senior advisor. Follow them on Twitter @DavidSamuelMay and @rich_goldberg. FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.