Several Companies Accused of Remaining in Russia After Promising to Leave

by / ⠀Blog / July 15, 2023
Several Companies accused of remaining in Russia after promising to leave

Researchers have accused certain well-known organizations of breaking their vow to leave Russia after President Vladimir Putin started his disastrous war in Ukraine, despite the fact that more than a thousand big companies committed to leave Russia following Putin’s actions. Even while not every company on the list actually departed, Moscow and the Russian economy took a major symbolic and financial hit as a result of the mass evacuation of corporations. Yale researchers headed by professor Jeff Sonnenfeld have publicly accused various corporations, including Heineken, Unilever, Philip Morris International, and Mondelez, of not living up to their pledges to withdraw from or significantly reduce their operations in Russia.

The Yale study draws on sources including insiders, experts, and students with access to Russian institutions, company records, and media accounts. While staying in Russia may not be illegal, Sonnenfeld claims the accused corporations are harming their own reputations and violating a moral code. Sonnenfeld accuses these businesses of being “wartime profiteers” and says that backing them is equivalent to embracing anything that powers Putin’s military.

One notable company accused of breaking its promise is Heineken, the Dutch brewing giant. Heineken was praised in March 2022 for promising to leave Russia, earning an “A” grade from Yale for making a “clean break” with the country. However, Yale’s research shows that Heineken still maintains seven breweries and 1,800 employees in Russia, even launching new brands in the country. Similar allegations have been made against companies like Mondelez and Unilever.

The researchers argue that these companies are “doubling down” instead of pulling out, and accuse them of self-immolating their own brands. Some businesses, like BP and ExxonMobil, faced huge losses to make good on their pledges to leave Russia, while others have been accused of institutional stagnation or ideological arrogance. According to Sonnenfeld, their continuous presence in Russia amounts to a stamp of approval for the Putin dictatorship.

In response to the accusations, Heineken stated that it is committed to leaving Russia and has refrained from selling the Heineken brand in the country. However, the potential sale of their Russia business is pending regulatory approval. Mondelez has scaled down its activities in Russia but continues to do business there. Unilever, Nestle, WeWork, Philip Morris International, and several American fast-casual chains were also highlighted for not fully adhering to their pledges.

While some companies have defended their extended stay in Russia by citing the financial hit it would cause or concerns for employees and customers, Sonnenfeld argues that the corporate exodus aims to increase pressure on Putin’s regime.

FAQ

Q: Why did over 1,000 major companies pledge to leave Russia?
A: The pledges to leave Russia were made in response to President Vladimir Putin’s devastating war in Ukraine. The companies aimed to show their opposition to the war and its implications by withdrawing their presence from Russia.

Q: What are the accusations against the companies named by Yale researchers?
A: The accused companies, including Heineken, Unilever, Philip Morris International, and Mondelez, are accused of violating their promises to leave or significantly reduce their presence in Russia. Researchers argue that by staying in Russia, these companies are functioning as “wartime profiteers” and endorsing Putin’s war machine.

Q: How did Yale researchers gather information for their findings?
A: The Yale research is based on a combination of sources, including whistleblowers, on-the-ground experts, students operating within Russia, corporate documents, and news media reports.

Q: Are these accused companies breaking the law?
A: The accused companies are not necessarily breaking the law by maintaining their presence in Russia. However, the researchers argue that their actions violate a moral code and damage their own brands.

Q: What is the response from the accused companies?
A: Heineken has stated that it is committed to leaving Russia and has stopped selling the Heineken brand there. The potential sale of their Russia business is awaiting regulatory approval. Mondelez has scaled down its activities in Russia but continues to do business. Other companies, such as Unilever, Nestle, WeWork, Philip Morris International, and American fast-casual chains, have not fully adhered to their pledges according to the research.

Q: Why do some companies defend their continued presence in Russia?
A: Some companies defend their continued presence in Russia by citing concerns for employees and customers, as well as the financial implications of fully withdrawing from the market.

Q: What is the goal of the corporate exodus from Russia?
A: The corporate exodus aims to increase pressure on Putin’s regime by symbolically and financially disengaging from Russia. The goal is to create discomfort and raise awareness about the actions of the Russian government.

First reported on CNN

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Joe Rothwell
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