Skip to content
Edit post

Report: Companies get credit for leaving Russia while failing to do so

by Thaisa Semenova June 28, 2022 11:24 PM 2 min read
This audio is created with AI assistance

After Russia began its brutal full-scale invasion of Ukraine on Feb. 24, many multinational companies have announced that they are voluntarily curtailing or halting their business there. Some, like Nestle or PepsiCo, were pressured into making the decision after facing pushback from their employees in Ukraine, customers around the globe, and investors.

On June 23, the U.S. clothing and footwear manufacturer Nike became the latest brand to say it’s going for good, after at first taking temporary measures.

Foreign businesses receive reputational gains for exiting Russia and thus stopping funding its war by paying taxes in the country.

However, not every company that claimed to pull out of Russia entirely did so, according to a June 28 report by the Moral Rating agency, an organization focused on tracking companies’ response to Russia’s invasion of Ukraine. The agency was founded shortly after Feb. 24 by Mark Dixon, who runs the mergers and acquisitions consultancy Thinking Linking in London and New York.

The agency rated the level of exit of the 114 largest corporations in the world that had ties with Russia as of Feb. 24. They received the rates from one to 10, with 10 meaning a complete exit. Measured activities include exports, imports, and partially or wholly-owned assets.

According to the report, only 6%, or seven of the 114 companies have entirely exited Russia. They include e-commerce giant Amazon and conglomerate Alphabet (parent company of Google and others).

The majority, 55% of the corporations, made a withdrawal that either covered only part of the corporation’s Russian activities, or was not completely realized, or both. The rest, 39%, made no exit announcement at all.

Most are in ‘gray zone’

The agency says that 63 of the 114 analyzed companies are often viewed as being fully out of Russia while they have only achieved “some degree of withdrawal.”

Among others, the report mentions Siemens continuing to serve existing clients, Meta (previously Facebook) still selling ads locally, General Motors retaining employees in Russia, and Microsoft “supporting schools and hospitals.”

“The companies don’t just fail to exit properly. They often also exaggerate or spin up their paltry efforts,” said Mark Dixon, the founder of the Moral Rating agency, as quoted in the report.

The organization said there were some loopholes that corporations could use to avoid fully leaving the Russian market. For example, a company could commit to a sale of a Russian company or asset without mentioning any timeframe for it, meaning it may not materialize.

Also, an activity in Russia may not be mentioned in the companies’ statements, allowing them to keep operating “something that is often economically more significant than the announced closure.”

“By avoiding the spotlight, they can keep their customers and shareholders in the dark, while they keep earning from Russia and while Putin’s regime benefits from the other side of the transaction,” said Dixon.

Support independent journalism in Ukraine. Join us in this fight.
Freedom can be costly. Both Ukraine and its journalists are paying a high price for their independence. Support independent journalism in its darkest hour. Support us for as little as $1, and it only takes a minute.
visa masterCard americanExpress

News Feed

9:13 PM

UK will boost humanitarian aid to Ukraine by over $10 million.

"Ukrainians are bravely defending their land against Russia’s brutal invasion, but the past two years of war have had a tragic impact on millions of people across Ukraine. Families have been separated, towns and villages decimated, and vital civilian infrastructure destroyed," said U.K. Foreign Secretary David Cameron in a written statement.
Ukraine Daily
News from Ukraine in your inbox
Ukraine news
Please, enter correct email address
2:30 PM

Russia's Supreme Court head dies in Moscow.

Vyacheslav Lebedev, who was chairman of Russia's Supreme Court since December 1991, died in Moscow on Feb. 23. Russia's judiciary has long been controlled by the Kremlin, with the country's parliament rubber stamping a heap of oppressive legislation, while courts handing out politically motivated sentences.
2:22 PM

Former UK Prime Minister Boris Johnson arrives in Kyiv.

"With their indomitable courage I have no doubt that the Ukrainians will win and expel Putin’s forces – provided we give them the military, political and economic help that they need," Johnson wrote on X, formerly known as Twitter.
1:44 PM

Zelensky: 'We are 730 days closer to victory'.

"Any normal person wants the war to end. But none of us will allow our Ukraine to end," President Volodymyr Zelensky said in a video marking the two-year anniversary of Russia's full-scale invasion of Ukraine on Feb. 24.
MORE NEWS

Editors' Picks

Enter your email to subscribe
Please, enter correct email address
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Successfuly subscribed
Thank you for signing up for this newsletter. We’ve sent you a confirmation email.