Many companies have talked about a responsibility to employees in the country. Renault has 40,000 in Russia. Others argue that they have a duty to ensure an elegant exit, perhaps by selling the business to locals, rather than adopting a cut and run approach that risks destroying an otherwise viable venture that may be able to continue operating even as Russia buckles under the weight of sanctions.
But the excuses are still pretty weak. Russia may be its second-largest market but Renault could still absorb the financial hit from exiting, analysts have said.
Others argue that it might actually make commercial sense for Renault to cut its losses now. The Redburn analyst, Charles Coldicott, points out that capital controls may prevent it from taking any profits or cash out of the country in the future.
He also highlights AvtoVaz’s reliance on the domestic market, which makes it highly exposed to any downturn in the Russian economy. “Historically, during times of recession in Russia AvtoVaz has been heavily loss making,” Coldicott said.
The pretenders are no better. These are the companies that want the world to think they’ve done the right thing but by couching their position as a “suspension” or “scaling back” of activities, they are leaving the door open to a swift return when the war ends.
There’s nuance here too of course. It is much easier for companies with an asset-light model such as accountancy firms and consultancies to withdraw than it is those in capital-intensive industries such as manufacturing, or those with large workforces such as retailers, Sonnenfield admits.
Others have stuck around on the basis that they are providing “essential goods” but from a list of consumer goods giants that includes Carlsberg, Danone, Kellogg, Kraft-Heinz, Mars, and Pepsico, it’s hard to find a single example of a product that could be considered essential to human life.
Even Nestlé has given up pretending that Cheerios cereal and Nescafé count as “important food”, following a direct plea from President Zelensky, though it still insists on selling baby food and food to hospitals.
Ultimately, there can be no good reason for staying put. It’s been a month since the Russian invasion. Western companies have had plenty of time to get out. There are now growing calls for consumers to boycott those that brazenly cling on. Perhaps it’s the only tactic left: a global blacklist of goods and products that we should all avoid.
Thousands of Ukrainian civilians are already dead. An estimated 10m people are refugees. Entire cities have been turned into rubble. If that’s not enough to prompt a change of heart in the boardroom then maybe the only way to get through is to inflict lasting commercial and reputational damage.
Every Western company that remains is a victory to Moscow, strengthening its war, financially and morally, and therefore undermining Western sanctions.
If there is still any doubt about that then consider this tweet from the Russian embassy, attributed to Putin himself: “We appreciate the position of those foreign companies who continue working in Russia despite the brazen pressure from the US and its vassals. They are sure to find additional opportunities for growth in the future.”
So there you have it: a personal endorsement that should shame every single company still in Russia. Consumers should vote with their feet.
