Companies face delicate decisions on weighing in on Israel-Hamas conflict

TORONTO — Corporations are under increasing scrutiny for where they stand on the Israel-Hamas conflict as protesters push for peace.

Numerous international brands including McDonald’s, Starbucks and Disney have attracted boycotts, while in Canada, Scotiabank in particular has been targeted by protesters for investments in Israeli defence contractor Elbit Systems Ltd.

With so much polarization around the conflict, experts say companies need to be especially careful with their actions, including how they respond to criticism.

Consumers generally react more to negative perceptions they have of companies than positive ones, said Saeid Kermani, an assistant marketing professor at Trent University. 

“The negative impact is going to be a lot worse than any positive impact you’ll get from supporters.”

Not only do the negative perceptions stick, but they get shared online faster and more widely, and get more people involved, he said.

Criticizing companies can also work well to generate attention for an issue, said Kermani.

“Some of the activism that we’re seeing, or the backlash that we’re seeing, it seems like brands are the easy targets in a lot of these situations.”

A temporary truce between Israel and Hamas will be extended for another two days, Qatar’s Foreign Ministry said Monday, the final day of a four-day truce between the warring sides.

So far, Hamas has released 58 hostages, including 39 Israelis, during the current truce, while Israel has released 117 Palestinian prisoners. Hamas, which Canada deems a terrorist organization, and militants from the group Palestinian Islamic Jihad captured about 240 hostages when militants attacked Israel on Oct. 7, killing about 1,200 people, including hundreds of civilians.

More than 13,300 Palestinians have been killed, roughly two thirds of them women and children, according to the Health Ministry in Hamas-ruled Gaza. 

Companies have faced backlash for varying levels of perceived involvement or support.

Canadian National Railway faced an hours-long blockade in Winnipeg a week ago by protesters pushing for a ceasefire, saying they targeted the company in part because it has a partnership with Israeli cargo shipping company ZIM.

Disney faced calls for boycotts after it condemned the Hamas terrorist attack and pledged to donate US$2 million to humanitarian relief organizations in the region.

Many companies have chosen to stay silent, but more than 200 major corporations did condemn the initial terrorist attack by Hamas, according to a list maintained by Yale University professor Jeffrey Sonnenfeld.

The list includes several Canadian banks, which issued statements against the violence.

“We are horrified by the murder and deaths of civilians and families. We must unite in our shared hope for peace, healing and the end of violence in the region,” said RBC chief executive Dave McKay in a statement on Oct. 12.

The bank announced a $250,000 donation, to be divided between the Canadian Red Cross Middle East Humanitarian Crisis Appeal and the United Jewish Appeal. Other banks also put up similar donations, including Scotiabank. 

“These violent attacks are unconscionable, and against the very grain of what we value as a society — the ability to live in peace and security, and with respect of each other,” said Scott Thomson, chief executive of Scotiabank.  

Companies should weigh in on issues when they’re linked to the company’s core values or mission, said Paul Dunn, a professor of business ethics at Brock University’s Goodman School of Business. 

“If a company does come out with a value statement, then it’s ethically obligated to follow through on its values or else it just looks hypocritical,” he said.

Corporate values are typically broad in scope, using such words as respect, integrity, and accountability, so there’s little limit to what a company could legitimately comment on. 

As the Israeli response to the attack ramped up, companies with links have faced more attention, and said less.

Protesters crashed the Scotiabank Giller Prize on Nov. 13 carrying signs that read “Scotiabank Funds Genocide,” and then days later pro-Palestinian protesters staged a sit-in at the bank’s head office in Toronto.

Scotiabank hasn’t commented publicly on the protests, but has noted that the investment in Elbit Systems by its 1832 Asset Management portfolio managers are done independent of the bank, unless there are specific investment policies that restrict those decisions.

In an internal memo to staff, Thomson emphasized support measures for staff, while noting the indirectness of the investment. 

“I understand and respect that employees across the bank hold a range of views on the ongoing conflict, and I know that all of us agree that hatred and discrimination have no place at our bank. My intention with this message is to provide background and facts surrounding these protests to help bring some clarity during these especially difficult times.”

Kermani at Trent said there’s been an increasing expectation in recent years for companies to weigh in on issues as people see them more as social and cultural institutions, but that there’salso evidence of that appetite waning.

Research also indicates that bigger companies with diverse customer bases put a lot at more at risk by speaking out, than by saying nothing.

“You’re not really going to gain from it, you might actually end up losing a lot more customers.”

— With files from The Associated Press

This report by The Canadian Press was first published Nov. 27, 2023.

Companies in this story: (TSX:BNS)

Ian Bickis, The Canadian Press