It has been nearly two years since Russia launched the full-scale invasion of Ukraine, and the war continues to rage despite global condemnation and sanctions. While over 1000 major companies quickly withdrew from Russia in response to the invasion, some prominent Western brands have stubbornly clung to the Russian market, even though 79.7% of consumers state that they would not buy products from brands that support the war against Ukraine. As concerned citizens: Why do certain brands continue operations in Russia, against their Western clients’ demand? And what we, consumers, do to encourage brands to make the right, ethically sound business decisions?
Companies like Procter & Gamble, Mondelez, and many more, have failed to fully exit Russia despite widespread calls to isolate the aggressor state both economically and politically. Offering vague justifications around humanitarian aid or employment obligations, they turn a blind eye to how their tax contributions and business activity prop up the Russian economy that feeds its military industry. Hesitation also appears a poor business strategy as stricter state laws pressure indecisive brands to commit one way or the other, meaning continuing operations in Russia makes it more difficult to leave over time, financially as well as legally.
As public sentiment overwhelmingly opposes backing the invader, remaining tied to Russia long-term also poses substantial reputational risks as public awareness of where companies stand grows. Despite this, some corporations may still be refusing to withdraw due to short-sighted opportunism.
Ukraine Doing Much Better on the Front Than It’s Being Given Credit For
Alarmingly, it would seem that some companies have remained in Russia as they hope to expand their market share as other businesses closed their doors in opposition to Russia’s aggression. Does it really need to be said that, while lost revenues are an obvious consideration, the human costs of enabling violence cannot be quantified and should always outweigh economic factors?
Indeed, every dollar spent on brands in Russia indirectly funds the violence against Ukraine. Shareholders in responsible investment funds are rightly concerned about complicit holdings, and as American taxpayer money contributes to the Ukrainian defense, brands paying taxes in Russia work directly against that effort.
Among the organizations that have appeared, to provide transparency and inform consumers about corporations' work in Russia, is PissedConsumers.com which regularly updates "Russia Status" on brands’ profiles, labeling each company's stance: Whether they remain in the Russian market.
Aside from highlighting brands to boycott, a model for how concerned citizens can voice their concerns to powerful companies, PissedConsumer closely tracks the activities of companies remaining in Russia and shares updates with its millions of monthly visitors. The website acts as a vehicle of grassroots activism as consumers can directly email companies and inquire about their motivation to stay in Russia. With increasing numbers of citizens voicing their opinions, companies are forced to rethink their hypothesis that staying in Russia will equate to only more profit.
Brands need to be made constantly aware that, while exiting Russia imposes unavoidable losses in the short term, remaining only risks far greater consequences through reputational damage, consumer abandonment, and a serious blow to trust that may take them decades to recover from. Companies have a choice: Put profit or people first – the consumers are clear about what they want.
Michael Podolsky
An American entrepreneur with Ukrainian origins, expert in customer service, and reputation management, and a proactive advocate of consumer rights and freedom of speech. CEO and Co-founder of PissedConsumer.com. Twitter: @m_podolsky
The views expressed are the author’s and not necessarily those of Kyiv Post.
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Comments (3)
Since the beginning of russia's latest invasion of Ukraine, Yale University's School of Business Management researchers have maintained a list of western companies still active in russia. Its been widely referenced at least in North American media. You can sort and filter the list by a variety of criteria. https://www.yalerussianbusinessretreat.com
Albeit Canada only represented 1.8% of foreign business's in russia pre war, all but one company has now withdrawn from russia. When I contacted its CEO in Alberta (cc'ing our political leadership involved in leaving sanctions), they actually responded saying they did in fact withdraw all their Canadian team, but that a russian shell team their continues to operate under their brand. Truth is I don't know.
I also used Yales' list to contact a bunch of mainstream USA brands operating in my country whose products I have consumed in the past. I missed some of the ones noted in this article though ...so more work to do.
At any rate I've found the Yale list useful to both make moral shopping decisions, and to request politely via letters some of the holdouts leave russia. Does it work when one person does this...NO. Does it work when 1000's do ...OFTEN. Does it work when the BILLIONS of Ukraine supporters do this …absolutely.
you may have the economics backwards. Demand is fixed and supply reactive. When foreign companies in Russia meet the demand, they export profits derived from Russian wealth out of the country. But when foreign companies simply leave Russia, the demand is still there; so Russian companies are created to fill that demand --and their profits stay in Russia.
Since the beginning of russia's latest invasion of Ukraine Yale University' School of Business Management researchers have maintained a similar list. Its been widely referenced at least in North American media. You can sort and filter the list by a variety of criteria.
https://www.yalerussianbusinessretreat.com
Albeit Canada only represented 1.8% of foreign business's in russia pre war, all but one company has now withdrawn from russia. When I contacted its CEO in Alberta (cc'ing our political leadership involved in leaving sanctions), they actually responded saying they did in fact withdraw all their Canadian team, but that a russian shell team their continues to operate under their brand. Truth is I don't know. I also used it to contact a bunch of mainstream USA brands operating in my country whose products I have consumed in the past. I missed the ones noted in this article though ...so more work to do.
At any rate I've found the Yale list useful to both make moral shopping decisions, and to request politely via letters some of the holdouts leave russia. Does it work when one person does this...NO. Does it work when 1000's do ...OFTEN. Does it work when the BILLIONS of Ukraine supporters do this ...absolutely.