![]() DiDi and Tencent, for example, have said they’ll stay in Russia. Indeed, consumer activists would do well to next target their fire on Chinese brands. Companies will face major difficulties if we head into a recession.”īut even those without the slightest interest in companies’ financial performance ought to consider this: When should consumers get involved to pressure a company into changing its course? With a war needing to be stopped, punishing Russia with the united might of Western consumer brands makes perfect sense. “But the Ukraine crisis is having an impact on the global economy as well. “Russia is a relatively small market, and companies will lick their wounds and consider alternative plans,” said Michael Treschow, a former CEO of Electrolux and chairman of Unilever. The businesses now leaving Russia must look to make more money elsewhere. Others, though, may simply be holding their tongue until they’ve moved their assets out of the country, so as not to sacrifice them to the Kremlin.Īnd even though ESG issues are rapidly becoming more important, companies fundamentally exist to make money. Some of the criticized companies are no doubt deeply immoral and plan to remain in Russia until their profits dry up. Mercedes-Benz, for example, predicts a loss of about $2.2 billion. The companies that have announced plans to leave Russia face considerable losses, as Russian authorities are planning to seize such companies’ assets. But forcing Western companies to leave Russia is not as black and white as it may seem-and not just because their departure will cost many ordinary Russians their jobs. Great, you say: Morally upstanding international activists have forced Western companies to do the right thing. No company wants to be seen as supporting Vladimir Putin’s war. We’re watching them more than we’re watching Biden.” But the debate on companies doing business in Russia is huge. ![]() “Remember the campaigns against companies doing business in South Africa. “Divestment campaigns against particular countries aren’t new,” said Alison Taylor, a New York-based environmental, social, and governance (ESG) consultant. Many others, though, have done so as a result of activist pressure of the kind that caused Uniqlo and Nestlé to change course. The following day, the Swiss conglomerate announced it would stop selling all but essential items in Russia.Ī fair number of businesses will have decided their various degrees of exit on moral grounds. On March 22, Anonymous claimed it had hacked Nestlé. In the 1970s and ’80s, for example, the company’s callous promotion of baby formula to mothers in developing countries caused protests and boycotts by Western consumers. Its plans to stay in Russia had been greeted with Twitter campaigns such as “chocolate with a taste of pain.” It’s not the Swiss conglomerate’s first encounter with consumer anger. Nestlé, after vowing to stay, has now made a similar reversal. On March 10, Fast Retailing announced it was suspending operations in Russia.įorcing Western companies to leave Russia is not as black and white as it may seem. When will you have enough money UNIQLO?” one angry customer lamented on Twitter. “Right after a Russian tank ran over a mail delivery van near the Ukrainian village of Egorovka, killing a mailman and a mailwoman inside, UNIQLO’s CEO Tadashi Yanai pledges to keep doing business with Russia. Outraged supporters of Ukraine took to the internet to unleash their collective fury against the Japanese retailer. “The people of Russia have the same right to live as we do.” Uniqlo was not going to close its 49 stores in Russia. “Clothing is a necessity of life,” he said. On March 8, Nikkei Asia reported remarks by Tadashi Yanai, the CEO of Uniqlo’s owner, Fast Retailing. ![]() In some cases, the corporate reversals have come almost overnight. (Airlines feature on Sonnenfeld’s list-but as Russia has banned Western airlines from its airspace, they deserve little credit for this step.) The companies on his list cover a wide spectrum: The law firm Baker McKenzie is merely giving up servicing Kremlin entities, while Italian insurer Assicurazioni Generali is leaving the country altogether, and Renault is closing its Russian plants. That’s when Yale University management professor Jeffrey Sonnenfeld created his infamous list. 27, four days into Russia’s invasion of Ukraine. As of March 25, more than 450 companies had curtailed operations in Russia, up from only a few dozen on Feb. Indeed, consumer pressure has yielded spectacular results. Like the Swiss consumer products giant, many left only after being targeted by internet activists. Last week, after enormous consumer pressure, Nestlé joined the more than 450 companies that have already left Russia or suspended operations there.
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