Market rewards Hershey’s bad behavior.
By Joe Siblia
The Hershey Company, makers of the popular Hershey’s Kisses, ignored efforts of green activists from Green America and its allies in the “Raise the Bar, Hershey!” campaign. Global Exchange, International Labor Rights Forum and Oasis USA are urging a boycott and letter writing campaign to “raise awareness of the abysmal labor practices that Hershey relies on.”
During the campaign, we examined the stock price, distributed the news globally to all major news outlets and made an outreach for comment from Hershey.
We were amazed by the results. Unbelievably, Hershey’s stock price actually increased – from $47.14 on February 1 to $49.77 at the end of Valentine’s Day, February 14. Obviously there are more considerations related to the stock price increase than ignoring this campaign; but it’s very clear the financial community did not give any dignity to the green activists. It seems Hershey’s ‘abysmal labor practices’ reduced costs and increased profit – and the financial community continues to reward costs reductions, regardless of the human rights impact.
An executive close to the situation, who commented anonymously because of his relationship with the company, responded by saying, “Hershey put their head in the sand. They’re not making a comment.” Hershey thought it better to ignore the campaign.
At the same time Hershey benefited from low labor costs, the largest supply of sustainably farmed, Rainforest Alliance certified cocoa and Bloomer Project Cocoa beans arrived on the shores of the United States, courtesy of Bloomer Chocolate, a privately owned company.
In May of this past year, Bloomer Chocolate, Petra Foods Ltd. and the Cemoi Group created a joint venture whose mission is “to improve the supply of high quality fermented cocoa beans from the Ivory Coast while at the same time improving the livelihoods of the local cocoa farming community.”
We’ll be watching the ongoing relationship between Hershey, Bloomer Chocolate and labor. It would be an interesting joint venture if Hershey and Bloomer got together and converted all chocolate to sustainably farmed, certified cocoa. Then justice would prevail.
About Joe Sibilia
As a visionary of the socially responsible business movement, Joe Sibilia is founder and CEO of Meadowbrook Lane Capital (MBLC), described by the Wall Street Journal as a “socially responsible investment bank” specializing in turning values into valuation.
He is also the CEO of CSRwire, the social responsibility newswire service that distributes and archives corporate social responsibility/sustainability news to journalists, analysts, investors, activists, academics, public relations and investor relations professionals worldwide. His long-range plan for CSRwire is to establish a “platform for innovative revenue sharing applications advancing the ‘movement’ towards a more economically just and environmentally sustainable society and away from single bottom line capitalism.”
Joe also founded the Gasoline Alley Foundation, a 501(c) 3 corporation that has incubated 43 small businesses since 1985 and teaches inner city and/or underprivileged persons to be successful entrepreneurs using socially responsible/sustainable business practices while revitalizing inner city neighborhoods.
Through MLBC, Joe has worked with a number of Socially Responsible Companies and has been widely recognized for his work in attempting to take Ben & Jerry’s Homemade Ice Cream private, while creating a private stock exchange for CSR companies. MBLC successfully preserved many of the founders’ social initiatives, and advancing the connection between good corporate citizenship and increased share value.
Joe and David Mager recently co-authored Street Smart Sustainability: The Entrepreneur’s Guide to Profitably Greening Your Organization’s DNA as part of the Social Venture Network Series published by Berrett-Koehler.
Talkback Readers: Is the rise in Hershey’s stock value evidence of a market failure? Share your thoughts on Talkback!