These days, it is difficult to stay out of politics. Here at DECISION, we do our best to remain objective and apolitical, which is not always easy, but many high-profile businesses do not have this luxury. An apolitical stance just does not work anymore. If a company does not make a stand, they are presumed by the public to be on the wrong side of history. That is why so many companies are pausing their operations in Russia due to the Russian invasion of Ukraine. There are too many companies to list at the moment (the New York Times is maintaining on updated list here), but here are some of the highlights:
Consumer goods and retail
- Ikea has suspended imports and exports
- H&M, which had about 170 stores in Russia, paused sales, as did Nike, with about 116 stores.
- Adidas said it would suspend sales in Russia, which has about 500 stores in Russia and the former Soviet states.
Energy
- Shell will exit its joint ventures with Gazprom, the Russian natural gas giant.
- BP will offload its nearly 20 percent stake in Rosneft, the Russian state-controlled oil company.
- Exxon Mobil will end its involvement in a large oil and natural gas project.
Finance - American Express, Mastercard and Visa cards issued by Russian banks will not work in other countries, and cards issued elsewhere will not work for purchases in Russia.
- The Big Four accounting firms — Deloitte, EY, KPMG and PwC — are pulling out of the country.
Food
- McDonald’s said it was temporarily closing its nearly 850 locations in Russia and halting operations there.
- Starbucks said it was closing all of its locations in Russia.
- PepsiCo said it would stop selling soda in Russia but would continue to produce dairy and baby food products there, calling it a “humanitarian” effort.
Media
- Netflix suspended its service and halted future projects in the country.
- The Walt Disney Company, Sony and Warner Bros. paused the release of movies.
Tech - Amazon Web Services has stopped accepting new customers for its cloud computing services.
- Google suspended advertising, including on its search and YouTube products.
- Microsoft and Apple paused sales. IBM suspended business.
Travel and logistics
- UPS, FedEx and DHL have suspended shipments to and operations within Russia and Belarus.
- Airbus and Boeing have suspended the supply of parts, maintenance and technical support services to Russian airlines. Boeing also said it had stopped buying titanium from Russia, a key source of the metal for the aerospace industry.
- American Airlines, Delta Air Lines and United Airlines cut ticket sales partnerships with Russian airlines. All three airlines also stopped flying over Russia.
We can pretend that these positions are entirely noble, but business analysts make the clear point that Russia’s declining economy (including a Ruble that has lost almost half of its value) has led to Russia being an increasingly poor investment. Companies are not only pulling out because of their principles, but also because the business fundamentals are no longer making much sense. In response to these withdrawals, the Russian government has threatened to nationalise the assets of companies that are pulling out. This could lead to some short-term pain for these companies, but they are always playing the long game. This move, if it happens, will stifle foreign investment in Russia for years, if not decades. So, while it is correct to say that Russia is undoing 30 years of economic connection-building with the West, they are also risking any chance of rebuilding those connections in the coming decades. This war is going to be a turning point in Russian history, and most likely not the kind that Putin had envisioned just a few weeks ago. As one expert put it, “I don’t think Russian business will be a hospitable place for Western business for a very long time”.