American Social Science Association

American Social Science Association

When it comes to ambition, American food giant Mondelez sets the bar immeasurably high. The company’s mission – proudly displayed under the environmental social and governance (ESG) section of its website – is to “lead the future of snacking by offering the right snack, for the right moment, made the right way”.

At which point, it’s hard to take anything else it says on such issues seriously. Perhaps it doesn’t matter anyway, not when its ludicrously over-paid chief executive appears to be on his own mission to turn Mondelez into the laughing stock of corporate America.

It is Dirk Van de Put’s humble assertion that the $100bn (£79bn) chocolate maker, whose brands include Cadbury, is justified in continuing to peddle its modest wares in Russia because “there has been no shareholder pressure whatsoever,” to get out of the country.

There have been some impressive moral gymnastics performed from those Western companies that have disgraced themselves in continuing to operate in Vladimir Putin’s gangster state, but Van de Put’s lily-livered words rather aptly take the biscuit at a company that counts the inimitable Oreo among its big brands.

In fact, the Belgian has almost given up any pretence of trying to justify the company’s continued presence in a country that is thought to have killed 70,000 Ukrainians – 10,000 of them innocent civilians. Even worse, in pinning the decision on shareholders, he’s effectively absolving himself of blame, which is about as spineless as it gets.

Perhaps the reason that Van de Put is content to pass the buck is that he finds it genuinely hard to know what the right course of action is and would therefore rather wait to be told, despite the fact that this should be the easiest decision he’s ever made.

Still, it’s clear that he’s spent some time thinking about Mondelez’s position, and has somehow managed to convince himself that it’s okay to be lining the Kremlin’s pockets while it rains bombs down on Ukrainian cities.

“If you have an important Russian business, the hit on the company would be huge, and that becomes a different discussion”, he told the Financial Times. Does it? Size shouldn’t be a factor when weighing whether to exit a country run by a regime as abhorrent as Putin’s government.

A single penny from any Western corporation towards Putin’s war effort is a penny too much - VYACHESLAV PROKOFYEV/Shutterstock

Besides, Mondelez’s Russian business contributed just 2.8pc of its global turnover in 2023, down from 4pc in 2022, which makes the decision to hang around all the more baffling.

It’s hardly a cornerstone of the Mondelez empire and yet the taxes that it pays directly to Moscow will be meaningful. But if they weren’t, even a single penny from any Western corporation towards Putin’s war effort is a penny too much.

Van de Put is on equally flimsy ground with the contention that it is better for the Russian operations of Western companies to remain in responsible hands rather than end up being passed over to Putin’s criminal associates on the cheap for the profits to then be channelled directly to the Kremlin too.

It is a tired argument. Van de Put may not enjoy thinking for himself but surely he understands that in staying put, Mondelez and other big Western names are handing a huge propaganda victory to Russia that is far more valuable than any amount of tax receipts.

By the same token, every time a company leaves, it is a reminder to the world that Putin’s Russia is an international pariah. As Yale University professor Jeffrey Sonnenfeld has pointed out, it was corporate boycotts – more than sanctions – that helped abolish apartheid in South Africa.

Still, it doesn’t help that the West’s sanctions scheme is deeply flawed. Western organisations are allowed to remain in Russia but Western companies are barred from exporting to the country, and even then many are easily circumventing the rules.

An investigation by Sky News has found that British firms are exporting hundreds of millions of pounds of equipment including drone equipment and heavy machinery through countries in the Caucasus and Central Asia from where they are understood to be forwarded on to Russia.

Mondelez’s investors include BlackRock, whose boss is the high-priest of do-goodery Larry Fink - Victor J. Blue/Bloomberg

Perhaps it is time to tax Western companies still doing business in Russia and use the proceeds to help Ukraine, as one senior EU official called for recently.

But this whole sorry escapade also raises some fundamental questions about how big business operates, not least what purpose someone like Van de Put serves, which is to say that if he only acts on investors’ orders then what’s the point of him at all?

The role of a chief executive isn’t to sit there waiting for instructions from shareholders like some nodding dog bureaucrat. He or she is supposed to lead, particularly when they are paid life-changing amounts of money to do so.

Van de Put took home $18m in salary and bonuses last year, which most sane people would probably agree is a ludicrously generous sum for a man who sells Toblerone and Ritz crackers for a living. But for that sort of money, it is reasonable to expect that he is capable of much more than acting as some sort of glorified bureaucrat.

Yet for all Van de Put’s shameful obfuscation, surely the biggest mystery is why the ESG movement continues to be taken seriously when Mondelez’s investors include some of the biggest names in global finance, among them BlackRock which is headed up by the high-priest of do-goodery Larry Fink.

As for Mondelez itself, among the nauseating examples of self-righteousness you will find on its corporate website is the declaration that “successful companies do more than focus on financial results, they create value for the world at large and positively impact the lives of those around them”, along with a boast that the company is guided by a pledge to do business “the right way”.

This sort of nonsense can’t go on. The West’s moral ambiguity over Russia has exposed the whole ESG edifice as an absurd, empty sham. It is time to tear it down.

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