2001 CERES report

Section: 5

Policies, Organization & Management Systems

Ben & Jerry’s Mission Statement consists of three interrelated parts: Product, Economic and Social. Within the words of our Mission Statement, especially the social component, lies the foundation of our environmental philosophy:

Product Mission

To make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients & promoting business practices that respect the Earth and the Environment.

Economic Mission

To operate the Company on a sustainable financial basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for our employees.

Social Mission

To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally & internationally.

We have a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices in our local, national and international communities by integrating these concerns into our day-to-day business activities. Our focus is on children and families, the environment, and sustainable agriculture on family farms.

• Capitalism and the wealth it produces do not create opportunity for everyone equally. We recognize that the gap between the rich and the poor is wider than at any time since the 1920s. We strive to create economic opportunities for those who have been denied them and to advance new models of economic justice that are sustainable and replicable.
• By definition, the manufacturing of products creates waste. We strive to minimize our negative impact on the environment.
• The growing of food is overly reliant on the use of toxic chemicals and other methods that are unsustainable. We support sustainable and safe methods of food production that reduce environmental degradation, maintain the productivity of the land over time, and support the economic viability of family farms and rural communities.
• We seek and support nonviolent ways to achieve peace and justice. We believe government resources are more productively used in meeting human needs than building and maintaining weapons systems.
• We strive to show a deep resect for human beings inside and outside our company and for the communities in which they live.

The specific social mission goals for 2001 focused primarily on environmentally related projects:

• Establishment of the Values Led Sourcing Team.
• Development of Global Warming Social and Environmental Action Campaign
• Raise consumer awareness regarding our social mission.
• Establish the foundation for action to address forced child labor

A decision was made in late 2001 to include a tamper-evident seal on pint packaging. Beginning in 2002 the company will use a PETG (polyethylene terephthalate glycol) tamper-evident seal on all domestic and international pints. PETG is a thermoplastic polyester resin that is used in the medical and food packaging industry and is recyclable. Our decision to use PETG versus polyvinyl chloride (PVC), the industry standard, was due to environmental concerns associated with PVC. Greenpeace has identified PVC manufacturing process as the largest source of dioxin released into the environment.

Since our founding in 1978, we have expressed a commitment to provide the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. We have also expressed our belief that business has a responsibility to improve the quality of life in our communities, and that includes environmental stewardship.

Ben & Jerry’s products meet or exceed all standards of food safety everywhere they are sold, and that means around the world in a variety of markets.

The recent U.S. Environmental Protection Agency Dioxin Reassessment reports that there is more to be concerned about than originally thought. The report states that dioxins are carcinogens (over a lifetime of exposure, the risk is ten times higher than previously thought). The report also noted that the good news is that overall dioxin levels in the environment are coming down. The EPA Dioxin Reassessment report can be found at the following website: http://www.epa.gov/ncea/dioxin.htm.

Ben & Jerry’s believes that we need to be proactive in limiting harmful chemicals that may enter the environment. That’s why we have taken steps to make an impact where we can by converting our pint packaging to unbleached paperboard, with the knowledge that a reduced reliance on chlorine as a bleaching agent will lead to a reduction in dioxin releases from paper mills.

We support consumers’ right to know how their food is produced and to make their own choices about what they eat. That conviction has shaped the essence of our position on recombinant Bovine Growth Hormone (rBGH). With regard to genetically modified organisms (GMOs), we supported the establishment of a coordinated regulatory framework within the U.S. government that allowed for full consideration of the ecological and human health implications of GMO crops, as well as for meaningful public input.

Ben & Jerry’s is a dairy-based business. One of the most significant potentially adverse environmental impacts of dairy farming is to the water supply. Many of our supplier farms are located in the vicinity of Lake Champlain, which has experienced stress from phosphorus run-off from agriculturaL industrial and municipal sources. Nitrogen is also a potential concern for ground water quality.

In 1999 Ben & Jerry’s launched the Vermont Dairy Farm Sustainability Project (VDFSP). The purpose of the VDFSP is to address water quality issues as they relate to dairy farming. Nitrogen and phosphorus are potential water contaminants. Phosphorus is of particular concern in the Lake Champlain watershed, due to the formation of algae blooms from excessive nutrients. Research done at Cornell University indicates that dairy farming practices can lead to concentration of these nutrients on farms. Work done by Professor Dan Fox at Cornell inspired these VDFSP goals: 1) Assess nutrient status on participating dairy farms in the Lake Champlain area; 2) Identify economical opportunities for improving nutrient management on participant farm; 3) Demonstrate the impact of economic implementations; and 4) Educate the dairy industry and the public about Dairy Farm Nutrient Status and proven, economical methods for improving nutrient management on dairy farms.

To accomplish these goals the VDFSP relies on collaboration from many aspects of the dairy industry. VDFSP board members include representatives of Ben & Jerry’s, The Ben & Jerry’s Foundation, St. Albans Cooperative Creamery, Poulin Grain, Bourdeau Bros. of Middlebury, Bridgemanview Dairy Farm, and University of Vermont Extension Service. The result is a unique collaboration involving farmers, farm suppliers, milk processors, university extension services and dairy product manufacturers, all focused on improving nutrient management to safeguard water quality. The VDFSP is an incorporated nonprofit organization with funding provided by the Northeast SARE program, the Windham Foundation, Ben & Jerry’s and the Ben & Jerry’s Foundation.

In 2001, nutrient data was collected on eight farms. This included biweekly monitoring of rations fed to milking animals. Preliminary findings indicated that Nitrogen and Phosphorus do concentrate on dairy farms. Results also indicated that purchased feeds are the greatest contributor to imported nutrients. Improved precision in matching nutrient application to crop need resulted in significant reduction of Phosphorus and savings of over $2,300 on one farm, with no decrease in crop yield. Early evaluation of feed nutrient status in lactating cows indicated that nitrogen and phosphorus are, on average, fed in excess of animal requirement. These findings indicated opportunities to reduce the rate of nutrient concentration by increasing precision in crop and feed nutrient management.

In 2002, the VDFSP will work with the same eight farms to implement nutrient management improvement strategies. Data collection will continue to document implementation impacts.

At each Ben & Jerry’s manufacturing site in Vermont there is an Environmental Coordinator dedicated to operating and monitoring environmental activities. These activities include wastewater management, composting, solid waste management, and recycling. The Environmental Coordinators report to the Site Engineers, they also work closely and meet regularly with the Manager of Natural Resources Use.

The Manager of Natural Resources Use reports to the Sr. Director of Operations, who has responsibility for manufacturing, materials, quality control, research and development, retail operations and environmental activities. The Sr. Director of Operations reports to the CEO of Ben & Jerry’

Each Environmental Coordinator prepares monthly reports for his/her Site Manager. This information is also passed on to the Manager of Natural Resources, who in turn prepares a monthly report reviewed by both the Sr. Director of Operations and the CEO. The CEO meets with the Board of Directors on a regular basis, where environmental updates are provided.

The framework standard process was initiated by Unilever in 2001 as a way to develop an environmental management system (EMS). The EMS provides a process for the achievement of continuous improvements in environmental performance. The EMS focuses on 17 separate areas that include Environmental Policy, Environmental Aspects, Environmental Training and Awareness and Communication. By developing a program that focuses on these 17 key areas, the facilities will be able to establish priorities and set objectives and goals, determine environmental impacts and to monitor, manage and plan environmental activities. In 2001 the Waterbury Plant completed a gap analysis to determine how they measured up to the EMS. The results we’re good, indicating that the site met 83% of the identified focus areas. Waterbury had made many of the changes by year-end and has been engaged in developing a program for the entire company that will provide consistency between all sites.

Ben & Jerry’s has always encouraged employees to take the initiative in improving all aspects of the company. Of the variety of environmental training programs and activities available to help promote employee awareness and involvement, many are employee-driven:

• In 2001 we offered training programs and staff development opportunities through Ben & Jerry’s University and department-specific training initiatives. The training programs utilized internal resources and external providers to deliver over 10,400 hours of classroom training, involving 701 employees from all departments and sites, as compared to 11,000 hours of classroom training involving 424 employees in 2000.
• The Business & Values School offered courses in personal development and in targeted business skills. The key initiatives in 2001 focused on Project Management and Effective Communication. Additional programs offered were Presentation Skills, Business Writing, and Train-the-Trainer; The Leadership & Management School offered training in the Performance Development Planning and four workshops in the Supervisory Excellence series. The Technical School offered courses in job-specific skills. Key initiatives focused on Safety training and the Supply Chain supporting Manufacturing operations. Course offerings included: HazMat Response Team Training and HAZWOPER Spill Containment, Execution & Control of Operations and Strategic Management of Resources. In addition, the Information Systems Group provided over 1,200 hours of computer training through classroom and individual support for 595 employees.
• News and information relating to environmental and social mission-related policies, issues and activities are communicated via bulletin board postings, company intranet, company newspaper, site meetings and company sponsored events. All employees are held accountable to the Company’s environmental policies through their performance reviews.
• Employees are members of specific waste reduction teams; their efforts contribute valuable information to projects that address waste at the source.
• The Company provides a bonus program for rewarding employees’ outstanding achievements, including achievements related to environmental performance.
• Environmental Coordinators conduct annual environmental awareness training at their sites.
• Training for retail shop owners includes education in the Company’s Environmental Program.

The Company keeps the public informed about its environmental activities in a variety of ways:

• CERES Reports are posted online at www.benjerry.com.
• The 2001 Social Performance Report, which includes an objective view of Ben & Jerry’s environmental impacts and accomplishments for the year, is available on-line at www.benjerry.com, as are Social Performance Reports from previous years.
• One of the most popular tourist attractions in Vermont, the public tour at the Waterbury manufacturing site provides one of the most effective hands-on opportunities for Ben & Jerry’s to communicate its environmental and social mission philosophies, via the guided tour itself - which includes a Ben & Jerry’s multi-media show - as well as via information displays and printed materials.
• "Position Papers” on current environmental issues and company initiatives are available at Ben & Jerry’ retail outlets.
• The company’s annual One World One Heart Festival encourages public awareness of social and environmental issues and offers guests opportunities to get active. While each festival is unique, a few common themes persist: composting and recycling as much waste as possible are key goals at every festival. From the 5.06 tons of waste generated during the 2001 Festival, 53% was diverted to compost or recycling. In addition, festivalgoers have the option to participate in our yearly postcard campaign, which focuses on various environmental and social issues.

Ben & Jerry’s recognizes the severity of conventional refrigerants’ impact on the environment, and has long realized the need for alternative methods of refrigeration that can provide both practical as well as environmentally sustainable solutions for frozen storage applications. Promising research & development in Thermoacoustics technology may yield a solution; more than that, successful adaptation of this technology from laboratory benchtop to practical application would quite likely revolutionize the refrigeration industry. We’re currently working with researchers from Penn State’s Acoustics Research Labs (ARL) on a project to construct and test a prototype thermoacoustic unit that would be suitable for use in a Ben & Jerry’s freezer cabinet.

Ben & Jerry’s tracks the cost and impacts of all waste and energy use (e.g. waste disposal, recycling, composting, etc.) associated with company operations. The Manager of Natural Resource Use and the Environmental Coordinators use a system of integrated environmental tracking tables to collect data that’s updated monthly, and normalized to a gallon of first quality product. Solid, hazardous and dairy waste production data are collected, as well as data from wastewater production, energy usage and recycling. Costs of each category’s management are also incorporated into the tables.

Since 1994 Ben & Jerry’s has been normalizing all figures with this unit of measurement in order to create baseline data that will serve to identify trends and set goals.

Ben & Jerry’s annually conducts and publishes the results of an independently audited assessment of the Company’s social performance in all areas of the business. The independent auditor for 2001’s Social Performance Report was James E. Heard. (His remarks, along with the complete report, are available for public review online at www.benjerry.com.)

The Social Performance Report includes assessments of the company’s environmental record for the year. In addition, yearly environmental assessments are conducted and their results circulated internally to evaluate regulatory compliance and individual site performance against annual goals. The internal environmental assessments are reviewed by plant managers. The Social Performance Report is reviewed by senior management for subsequent publication on the company’s website.

Total spending for non-ingredient purchases in 2001 was $26,324,766, compared to $33,400,069 in 2000. In 2001 Ben & Jerry’s spent $1.8 million with diverse suppliers as compared to $1.5 million in 2000. Of total spending, 6.8% of that went to businesses operated by women and minorities as defined by the National Minority Supplier Development Council.

In 2001, our purchasing department began to use a network of purchasing contacts from various departments as control points to maintain compliance with policies introduced in 2000 to promote spending with diverse suppliers. These policies specify that all purchases for single items over $5,000 which are not covered by an existing contract shall go out for bid and must include at least one diverse supplier in the bid process.

We continued the use of Diversity Information Resources directories (national directories of minority and women-owned businesses) in 2001 to assist in sourcing diverse suppliers. We eliminated the bound versions and progressed to an online version, accessible via a link from our company intranet. This was a major improvement in that all employees have access and this version is current year-round. It is our intention to make this link available to Unilever in 2002.

Ben & Jerry’s has both a Pre-Certification Survey and a Self-Assessment Survey for all potential suppliers. There is no formal environmental training for Quality Assurance or Purchasing representatives at this time.

The compares supplier assessment efforts began in 1996 when Ben & Jerry’s initiated a Vendor Certification Program. The purpose of this program was to improve the quality and reliability of the materials we purchase, increase efficiency and profitability in manufacturing operations, increase opportunities for Ben & Jerry’s vendors to profit from their relationship with us, and to clarify expectations, responsibilities, specifications, and procedures.

Following are the environmental questions we ask potential suppliers. These concerns are part of our assessment and routine visits with vendors:

• Does the company have an environmental mission statement or a group of related policies?
• Does the company align itself with any environmental principles such as CERES?
• Are all the waste permits for the company in place?
• What type of management and equipment are dedicated to complying with environmental laws and corporate policies?
• Has the company ever violated federal, state or local regulations?
• Is there documentation to prove adherence to these regulations?
• Does the company have an established waste reduction program that includes a recycling program?
• Where applicable, what type of wastewater management system does the company have in place?

Ben & Jerry’s spent $119,120,000 for ingredient and supply purchases in 2001. Approximately 51.87% of those purchases were from companies that we view as being aligned with Ben & Jerry’s values. This was an increase from 41.19% in 2000. A list of these suppliers follows:

• Greyston Bakery
  The Greyston Bakery of Yonkers, New York, is owned by an operating foundation and represents a unique business model. Greyston has been a supplier of brownies to Ben & Jerry’s since 1988. This ingredient is used in our Chocolate Fudge Brownie™ ice cream and frozen yogurt, two very popular flavors. The Greyston Bakery is owned by the Greyston Foundation, a nonprofit social service network that operates its bakery to train low-income people for self-sufficiency. In 1998 we began a program to help phase-out the premium we have paid to Greyston. Ben & Jerry’s and Greyston have mutually agreed that the bakery should orient itself to charging market prices for its products in order to be economically viable over time. In 2002 we are addressing actual changes in pricing to begin to bring Greyston into a more competitive model. Greyston decided that in order to become more competitive, they needed a new facility to increase the efficiency and flexibility of their operation. Greyston is now in the process of building a new production facility. We continued in 2001 to provide technical assistance to Greyston in the design of this new plant; construction is expected to be completed by the first quarter of 2003. We are also working with Greyston to open a café that will function as a PartnerShop in Yonkers.
   
• LaTrinidad Cooperative
  The company continued to source coffee extract from Coffee Enterprises. They source their coffee beans for Ben & Jerry’s from the Oaxaca State in Mexico. In previous years, Aztec Harvest Cooperative was the source for the beans used in Ben & Jerry’s coffee extract. Recently, the Aztec Harvest Cooperative decided to remove themselves from the coffee business. This resulted in some of the members creating a new cooperative called LaTrinidad Cooperative. Coffee Enterprises switched sources to LaTrinidad Cooperative for all of our bean requirements. Their members continue to use organic agricultural methods. While not being Fair Trade Certified, their coffee meets fair trade specification, the only difference being the cost associated with certification.
   
• Cia. Agricola La Gavilana
  In conjunction with our vanilla supplier, the Virginia Dare Company, we used a blended vanilla extract that contained vanilla beans from the Savegre River region of Costa Rica. Our supplier purchased all of the crop that this organization was capable of producing. This trading relationship helped to reduce pressure to clear-cut additional forests in this area. In addition, this organization has leveraged their relationship with Ben & Jerry’s to secure additional funds to support community development projects, including a regional health center, acquisition of supplies for schools and infrastructure improvements.
   
• Gralo Borja
  Sensient Flavors, Inc., our supplier of banana puree, purchased the puree from the Borja family business in Ecuador. According to Sensient, Mr Borja continues to work on transitioning to organic methods and to educate Ecuadorian farmers about sustainable farming methods. Mr Borja operates a childcare center at his banana processing facility. He offers medical insurance and transportation to his workers and he has established The Water Foundation to increase awareness of environmental issues.
   
• Sweetheart
  This manufacturer of our pint container sourced all of the paper that we used for our pints from Riverwood International Corporation. Riverwood’s manufacturing process for this paper is free of chlorine bleach. Riverwood International uses a titanium dioxide whitened clay coating on their paperboard.

In 2001 the PartnerShop program focused on developing systems and support to enrich our offerings to nonprofits that meet our criteria. In 2002 we will be piloting and/or launching several of these tools, including the PartnerShop Training Curriculum and the Training Activities Report. We also developed new materials to help us promote the program and attract qualified candidates. The updated materials more accurately reflect the mission and goals of the program.

In 2001, we opened two new PartnerShop locations: Haight-Ashbury (San Francisco) and Eastern Market (Washington, DC). The Haight-Ashbury store is operated by Juma Ventures. Juma now operates three scoop shops as well as the ballpark concessions at Pac Bell and 3Com Parks. The Eastern Market store is operated by the Latin American Youth Center, a youth and family development organization in Washington, DC.

No PartnerShops closed in 2001. After 15 years, the original PartnerShop in Ithaca, New York, owned by the Learning Web, closed, as did the shop in Siesta Key, Florida, owned by Suncoast Regional Youth Consortium of Sarasota. Both of these shops were run by organizations that today do not meet our criteria. At the end of 2001 there were 6 PartnerShop nonprofits operating a total of 12 locations.

For more information about the nonprofit organizations that own PartnerShops, visit our website at www.benjerry.com/scoop_shops/partnershops/.

At the end of 2001, 186 (78%) of our shops were owned by independent operators. 15.1% (28) of those shops were owned by women and people of color, compared to 13.9% in 2000.

In 2001, the total amount spent by franchisees on community-based efforts was $351,256 (13% of the annual 4% marketing obligation) as compared to $385,968 (13%) in 2000. In 2001, operators were again asked to report activities by category (i.e. community initiatives). Of the total community activity, 56.4% was focused on Children & Families (55.5% in 2000); 22.87. went to Civic Projects (24.8% in 2000); 17.6% on Other (15.3% in 2000); and 3.2% on Environmental Initiatives (4.4% in 2000).

At the 2001 Franchise meeting in Phoenix, participants completed a daylong playground build with KaBoom! for the Whitman Elementary School located in Mesa, Arizona.

850,000 Free Cones were served on Free Cone Day 2001, which amounts to over 212,500 pounds of ice cream, frozen yogurt and sorbet. This is an increase of 15,000 cones from 2000.

All of Ben & Jerry’s sites have trained personnel and equipment capable of handling chemical emergencies. Following is a list of the steps we take to ensure employee, community and environmental safety:

• Each site that handles potentially hazardous chemicals (St. Albans, Springfield, Waterbury, Distribution Center) is fully furnished with Level A Chemical protective suits, monitoring equipment, self-contained breathing apparatus (SCBA) units, and other hazardous material (HazMat) response equipment. Trained HazMat teams are comprised of maintenance staff, employees and volunteers from various departments, including all managers and supervisors.
• Each site is required to submit to the State of Vermont a complete listing of hazardous chemicals used on site. In addition, walk-throughs of each plant are conducted with outside emergency personnel to identify hazardous areas.
• Each manufacturing site has completed the Risk Management Program as required by the Environmental Protection Agency’s Chemical Emergency Preparedness and Prevention office. This program requires the company to prepare two risk scenarios based upon the amount of anhydrous ammonia stored on-site.
• Ben & Jerry’s safety staff are members of the Vermont Safety and Health Council.
• All of Ben & Jerry’s Emergency Response (ER) plans have been updated to include Process Safety Management and Risk Management Planning. They are available for review by affected parties, including local ER personnel, town officials and homeowners.
• Ben & Jerry’s works with local response crews to update emergency response training.
• Ben & Jerry’s is happy to provide facility-specific information to the communities where plants are located.
• Ben & Jerry’s reports to Tier 11 (Vermont’s Community Right To Know Program), which lists any and all Hazardous Materials/Chemicals that are used and/or stored on site.