(JTA) — In 2016, Colorado’s state pension fund passed a law pledging economic loyalty to Israel.
That law is now being invoked as the state becomes the seventh to punish ice-cream company Ben & Jerry’s over the company’s 2021 pledge to stop selling ice cream in “occupied Palestinian territories.”
The board of Colorado’s Public Employees’ Retirement Association voted unanimously Friday to begin a procedure to divest its holdings from Unilever, Ben & Jerry’s parent company, the Denver Post reported. The association drew upon the 2016 law, signed by Democratic then-Gov. John Hickenlooper, which requires the state pension to divest from any foreign company that has “economic prohibitions against Israel.”
“Ben & Jerry’s has made comments that are politically motivated for leaving Israel,” Amy McGarrity, chief investment officer for the fund, told the board, according to the Denver Post.
Ben & Jerry’s is based in Vermont, but qualifies as a foreign company because Unilever is a British conglomerate. It has said that refusing to do business in occupied territories does not constitute a boycott of Israel itself.
But that distinction isn’t flying with Colorado’s pension review board, or with other state funds that have invoked similar anti-boycott state laws to divest holdings from Unilever in the wake of the company’s statement.
Colorado’s law, which stands to affect around $42 million the fund had invested in Unilever, was one of a flurry of state laws considered or passed in 2016 that sought to use economic pressure as an explicit attempt to counter the growing Boycott, Divestment, Sanctions movement targeting Israel.
The use of state pension funds as a bargaining chip in the Ben & Jerry’s backlash is also significant given the growing prominence of investment firms in the Israel proxy war. In one notable skirmish, the multi-billion dollar investment research firm Morningstar has been scrutinized by pro-Israel groups for allegedly downgrading Israel investments.
The Colorado pension board’s vote triggers a 180-day period of dialogue with Unilever, following which the state would take around a year to fully divest its holdings if company policy does not change. Unilever has said its ownership agreement with Ben & Jerry’s means the ice-cream maker maintains a large degree of independence and cannot be overruled by the conglomerate.
Colorado would become the seventh state to go after Unilever economically over the statements from Ben & Jerry’s. Four others — New York, New Jersey, Illinois and Arizona — have also announced similar plans to divest state pension funds from the conglomerate, while Florida has halted new investments in Unilever and Texas has said it is limiting business with Ben & Jerry’s. Some other states have triggered reviews of their contracts with the company, but have not yet announced formal economic punishments.
Meanwhile. the Israeli affiliate of Ben & Jerry’s is also suing Unilever in U.S. court in an attempt to pressure the company to let it keep its contracts. The lawsuit describes the Ben & Jerry’s statement as “boycotting parts of Israel.”