Ben & Jerry’s 2006 Social & Environmental Assessment Report

2. 2006 Highlights

The Short & Sweet Version

We hope you’ll take some time to sit down with a bowl of ice cream and savor this report all the way through. But for those of you who like to dig out the gobs of cookie dough first, here’s the abridged story of our social and environmental performance in 2006 to match your style. Don’t forget to come back later to finish the bargain. Here’s how we did…

…in our Supply Chain

We said goodbye to the Eco-Pint, the unbleached paperboard pint container used to package our ice cream, after nine years. We had hoped that other food companies would join us in moving toward unbleached paperboard packaging, an environmentally friendly material that does not require the use of chlorine bleach. But since the market for this kind of packaging never grew much beyond Ben & Jerry’s, we ran into increasing supply, quality, and cost challenges. In the fall of 2006, we transitioned to a new bleached paperboard container for our pints. Our new supplier has an excellent track record of sustainable forestry practices and can help us achieve our long-held goal of finding a non-petroleum based, renewable coating for our pint package. The move away from the Eco-Pint will also allow us to eliminate approximately 1,000 tons of waste annually in our packaging supply chain. All in all, we feel this is a necessary step sideways that will allow us to keep moving forward on our journey to reduce the environmental impacts of our packaging.

For years, we’ve sought out suppliers like Greyston Bakery who deliver environmental and social benefits in addition to the ingredients we need to make and package our ice cream. Measured by total dollars, our Values-Led Sourcing declined in 2006, to 49% of our raw material spend (i.e., ingredients, dairy, packaging), driven largely by the low milk prices we saw in 2006. We did not add any new VLS initiatives in 2006, but we did make plans that will likely increase our VLS spend in 2007, including the following:

We made the decision in 2006 to convert the vanilla extract in our smooth Vanilla ice cream — and the cocoa powder in our smooth Chocolate ice cream — to Fair Trade Certified in 2007. Given the excellent track record and the growing consumer awareness of Fair Trade certification, we’re excited about the change. We will continue to source all of our coffee extract from Fair Trade sources, as we have since 2005.

>>>Watch this video clip about Fair Trade

We made the decision to transition all of the eggs used in our U.S. ice cream production to Certified Humane cage-free suppliers over a four-year period, beginning in 2007. It took a nudge from the Humane Society of the United States to speed up our process, but this decision makes Ben & Jerry’s one of the very first national food manufacturers to commit to using Certified Humane cage-free eggs.

…in our Scoop Shops

Our Scoop Shops faced unprecedented competition in many markets across the country, resulting in a difficult year for some of our franchisees. Overall sales in our franchise system were flat. Meanwhile, a US- based columnist wrote an article in the UK-based magazine Ethical Corporation that questioned the integrity of our earnings claim in our franchise legal documents. We sent an honest and comprehensive reply to the magazine to defend our practices, but the article stung a bit, particularly among our franchise community.

Three new Ben & Jerry’s PartnerShops opened in 2005, while one closed. A PartnerShop is a Scoop Shop owned and operated by a community-based nonprofit organization that offers job training and paid work experience to youth who may face barriers to employment. We’re committed to supporting this unique franchise model and our nonprofit partners, though it has never been an easy road.

Coast to coast, Ben & Jerry’s Scoop Shop teams rolled up their sleeves and contributed over $600,000 in product donations, cash, and employee time to support local community projects. From relief efforts to blood drives to fundraisers, our franchisees are finding ways to make a positive impact in their own neighborhood.

In its 28th year of Scoop Shop tradition, Ben & Jerry’s Free Cone Day served up some 1.4 million free scoops to ice cream lovers worldwide, extending thanks to our neighbors while helping local nonprofit partners to spread the word about their mission. In all, the global event raised over $272,000 for hundreds of organizations in communities where Ben & Jerry’s franchisees are doing well by doing good.

In a new program we call Scoopers Making Change, we asked Ben & Jerry’s scoopers around the country to send us their ideas for how to promote positive social change in their own communities. We read through the proposals and invited nine scoopers to Vermont for a jam-packed week of work and play. During their stay with us, these activists-in-training developed their ideas and community organizing skills, refined their action plans, and energized our entire office with their idealism and passion. We sent each scooper home with a grant of up to $1,000 from Ben & Jerry’s to help with project implementation.

>>>Watch this video clip about the Scoopers Making Change program

…for the Environment

We reached and exceeded all of the environmental performance goals at our Vermont manufacturing plants, reducing our water use, solid waste, product waste, and greenhouse gas emissions while increasing recycling.

We reached our Company’s goal to reduce our normalized CO2 emissions (emissions per gallon of product) by 10% over the five year period from 2002 to the end of 2006. Overall, we achieved a 32% reduction in normalized CO2 emissions in these five years. On an absolute basis, we generated 2% more CO2 emissions in 2006 over our 2002 levels, while our production increased by double digits. In addition, we offset the environmental impact of 100% of these emissions through the purchase of “carbon offsets” from NativeEnergy.

We began a focused effort in 2006 to put our CO2 emissions in a broader perspective by calculating a new metric known as Ben & Jerry’s Global Warming Social Footprint. Working with the Center for Sustainable Innovation, we compared our manufacturing carbon dioxide emissions to one of the most aggressive global plans to combat global warming, known as the WRE350 Plan. We found that our performance over the last six years narrowly missed the targets of the WRE350 Plan. Going forward, the footprint gives us valuable targets to aim for as we shape our long-term climate change strategy.

We continue to work closely with the farmers who supply our milk and cream on both sides of the Atlantic, to help them implement sustainable practices on the farm. In 2006, we brought 11 farmers and their families and several project advisors from our European Caring Dairy program to Vermont where they discussed best practices with some of the farmers in our Dairy Stewardship Alliance. Participants told us the exchange was a valuable experience on the path to improved environmental, social, and economic outcomes on their farms.

>>>Watch this video clip about the Caring Dairy program

In response to the growing cost of energy and the concerns about climate change, we partnered with the Vermont Environmental Consortium and the Vermont Dairy Task Force to develop The Farm Energy Handbook. The handbook was sent to every dairy farmer in Vermont to help them evaluate whether alternative energy systems, such as methane biodigesters, solar panels, or wind turbines are financially viable options for their farm.

…in the Workplace

In 2006, our parent Company, Unilever, announced that it will outsource worldwide HR functions to Accenture. The pending change required the alignment of Ben & Jerry’s benefits with the rest of Unilever North America, which resulted in some significant changes to employee benefits packages in 2006. We still offer competitive benefits and some perks you’re not likely to find elsewhere.

…in the Community

From Ben & Jerry’s headquarters, we devoted over $3.2 million in resources to hundreds of projects and groups that promote positive and environmental change. Starting with the Company’s contribution to the Ben & Jerry’s Foundation and extending to product donations, flavor royalties paid to nonprofit organizations, community service, and issue-based marketing, we put more money, ice cream, and employee time than ever towards issues and actions we believe in. Learn more about the ways we give back to the community.

The Ben & Jerry’s Foundation continued its high-impact grant-making to progressive organizations working to address the root causes of social and environmental problems in our nation. Our Company allocated $1,587,917 to the Foundation in 2006, a 9% increase, and the Foundation awarded grants totaling $1,333,985 over the course of the year. Two of our past grantees won national awards for their work in 2006.

One year after Hurricane Katrina, we sent another team of seven employees to the Gulf Coast for a week to help with the deconstruction and clean-up of storm-damaged homes. Ben & Jerry’s paid for the crew’s time and travel.

…in the Public Eye

With our American Pie ice cream — and our progressive Company values — leading the way, we launched our American Pie Campaign calling for common sense priorities in the federal budget. We gave away samples of the ice cream on an eight city U.S. tour and developed an interactive American Pie website to highlight the fact that millions of American children live in poverty while we spend tens of billions of dollars each year on nuclear weapons. Our campaign collected thousands of postcards to send to Congress.

We were so inspired by An Inconvenient Truth, Al Gore’s 2006 documentary film on global warming, that we decided to bring the DVD version to as many people as possible in our own backyard and around the country. Working with the Vermont Department of Education and Vermont Public Interest Research Group, Ben & Jerry’s provided a free DVD of the film to every high school in Vermont. We also promoted the film on college campuses around the country as a part of Truth on Campus and in Ben & Jerry’s Scoop Shops.

We launched a Cool Your Jets initiative to educate the public about the value of carbon offsets in the fight against global warming — and to give people the chance to offset the carbon dioxide emissions from their personal air travel by funding the construction of new renewable energy projects. With our friends at NativeEnergy in the U.S. and myclimate in Europe, the initiative resulted in the purchase of 482,000 pounds of carbon offsets for 443,600 miles of airplane travel, in its first three months.

Ben & Jerry’s introduced a new line of bottled milkshakes and dedicated a portion of the proceeds to the purchase of carbon offsets through Clean Air, Cool Planet , which provides funding for the construction of new renewable energy projects. In 2006, these carbon offsets totaled $102,107, which will fund projects equivalent to taking thousands of cars off the road for a year.

Our Consumer Affairs folks were inundated when thousands of people, spurred on by the Humane Society of the United States, called or wrote to encourage us to source our eggs from cage-free suppliers. In October, Ben & Jerry’s announced that it will transition to using entirely Certified Humane cage-free eggs over a four-year period beginning in 2007. It’s fair to say that consumer voices raised the profile of this issue within our supply chain and sped up a decision that we had been contemplating for some time. In the months that followed, we were pleased to get many more calls thanking us for being one of the first major food manufacturers in the U.S. to source Certified Humane cage-free eggs.

…around the World

In July 2006, Ben & Jerry’s introduced Europe’s first ice cream made with Fairtrade Certified ingredients: Ben & Jerry’s Fairtrade Vanilla. All of the vanilla extract — and sugar — used in this ice cream are produced by cooperatives of farmers who are guaranteed to earn a fair price for their crops; have access to reasonable credit; and use environmentally sound methods of cultivation. We’re proud to be a part of the growing Fairtrade movement around the world that is helping small farmers in the developing world to earn a decent living, stay on their land, and send their children to school.

In Europe, Ben & Jerry’s Climate Change College entered its second year, continuing work with polar explorer Marc Cornelissen and the World Wide Fund for Nature (WWF) to raise awareness of climate change and motivate public action in Europe to reduce greenhouse gas emissions. In May 2006, our first class of climate change ambassadors traveled to Greenland on a two-week expedition to perform hands-on climate research on the ice cap and to meet Inuit people who are experiencing some of the most dramatic effects of climate change. The experience prepared these young people to lead awareness campaigns in their home countries in support of WWF’s climate change action initiative. We chose our second class of ambassadors from thousands of applicants in the UK, Holland, Ireland, and Germany.

>>>Watch this video clip about the Climate Change College