Companies and governments have imposed sanctions and cut ties with Russia, following its invasion of Ukraine.
Banning Russia from the SWIFT digital-messaging system that is used by financial institutions around the world and the disappearance of consumer companies are just the beginning. For average Russians it may take months before they truly feel the full weight of the economic sanctions, or the trickle-down effect of oil giants like Shell and BP exiting joint ventures.
Brands, eager to not be seen sitting on the fence, have united to denounce the country and suspend their services in Russia until further notice.
Car shipments were paused, cargo ships dropped port calls, and oil companies cut their pipelines. Russia’s invasion of Ukraine is leading some of the world’s best known brands to abruptly exit a country that’s become a global outcast.
Along with needing to comply with Western sanctions against Russia, companies are increasingly aware of the potential reputational risk of continuing with business as usual in the country, while some have cited their own corporate responsibility standards for pulling back. They’re also expressing concern about the plight of Ukrainians as the war takes a mounting toll on civilians.
As the war’s human cost grows, companies will have to respond not just to sanctions, but public sentiment, too. Two million people have fled Ukraine as of Thursday, according to the United Nations refugee agency.
Companies that have scaled back or cut ties with Russia include the following.
FOSSIL FUELS
Western sanctions on Russia have for now excluded the energy sector, where Russia is a major player. The nation is the world’s third-largest producer of oil and second-largest producer of natural gas. However, oil and gas companies, already feeling the heat from climate activists to invest in renewable energy, were among the companies that announced the most rapid and dramatic exits.
BP
Energy firm BP, which calls itself Russia’s largest foreign investor, said that it would abandon its nearly 20% stake in Russian state-owned oil and gas company Rosneft. The move could cost it anywhere from $14 billion to $25 billion, according to Reuters.
Equinor
Norway’s biggest energy company announced it would begin withdrawing from its joint ventures in Russia, valued at about $1.2 billion. “We are all deeply troubled by the invasion of Ukraine, which represents a terrible setback for the world,” Anders Opedal, Equinor’s president and CEO, said in a statement.
Exxon
ExxonMobil said it would pull out of a key oil and gas project, Sakhalin-1, and halt any new investments in Russia. The firm did not provide a timeline for its withdrawal from the project, which it operates on behalf of an international consortium.
“The process to discontinue operations will need to be carefully managed and closely coordinated with the co-venturers in order to ensure it is executed safely,” the company said in its announcement, adding, “ExxonMobil supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation. We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people.”
Shell
Shell said it was leaving its joint venture with state-owned Gazprom and ending its involvement in the now-suspended Nord Stream 2 pipeline built to carry natural gas to Western Europe. The move could cost the company roughly $3 billion in assets.
CARS AND PLANES
Companies in the auto and aviation industries also signaled they’re staying out of the Russian market, either out of concern for Ukraine or to comply with Western sanctions.
Boeing and Airbus
Airplane makers Boeing and Airbus stopped supplying parts and service support for Russian carriers. Boeing suspended major operations in Moscow and has temporarily closed its Kyiv office.
Russian airlines have 62 planes on order with the two manufacturers, Reuters reported.
Daimler Truck
Germany’s Daimler Truck has suspended deliveries of truck components to its Russian partner Kamaz. “We have decided to discontinue our business activities in Russia with immediate effect until further notice,” it tweeted.
Ford Motor Company
Ford also suspended operations in Russia and said it would donate money for Ukrainian refugees. The company’s Russia business is quite limited, with Ford having a minority stake in a joint venture with PJSC Sollers, which focuses on commercial van manufacturing.
“Given the situation, we have today informed our JV partners that we are suspending our operations in Russia, effective immediately, until further notice,” Ford said.
“While we don’t have significant operations in Ukraine, we do have a strong contingent of Ukrainian nationals working at Ford around the world and we will continue to support them through this time,” the company added.
Harley-Davidson
Harley-Davidson halted motorcycle shipments to Russia, saying its thoughts “continue for the safety of the people of Ukraine.” Putin famously rode a three-wheeled Harley on a visit to Ukraine in 2010.
Mercedes-Benz
Mercedes-Benz suspended exports of cars and vans to Russia and ceased its manufacturing there late on Wednesday. It will keep working with suppliers in Ukraine, who provide some components for its vehicles, MarketWatch reported.
Toyota
Toyota is halting production at its St. Petersburg plant that makes RAV4 and Camry models starting Friday because of supply-chain disruptions, saying it was watching events “with great concern for the safety of the people of Ukraine.”
Volkswagen
The Volkswagen Group, whose auto brands include Audi, Ducati, Skoda and Porsche, on Thursday said it would stop production at two factories in Russia as well as halt exports to the country immediately. Affected Russian workers would receive paid leave from the company, VW said.
Volvo
Sweden’s Volvo Cars said it stopped deliveries because of “potential risks associated with trading material with Russia,” including Western sanctions.
TECH
Tech companies such as Apple, Dell, Google and Meta are also headed for the door, aided by pressure and pleas from Ukrainian government officials.
CONSUMER GOODS
Airbnb
The online housing service said that it had paused all operations in Russia and its close ally Belarus. Earlier this week, Airbnb also announced that its nonprofit arm will offer free shelter for up to 100,000 people who have fled Ukraine because of the invasion.
Budvar
Czech brewer Budvar, which counts Russia as one of its five major markets, halted beer deliveries to the country, saying business is not the top priority and that it’s looking for ways to help, including finding accommodations for Ukrainian refugees.
Disney
Walt Disney said it would pause the release of its films in Russian theaters, including the upcoming “Turning Red” from Pixar. “We are working with our NGO partners to provide urgent aid and other humanitarian assistance to refugees,” the entertainment giant stated.
H&M
The fast-fashion chain said it would “temporarily pause all sales in Russia.” All of its Ukraine stores have been closed for safety reasons, H&M said.
“H&M Group is deeply concerned about the tragic developments in Ukraine and stand with all the people who are suffering,” the company said in its statement.
Ikea
The Swedish furniture company said it was closing all of its Russian stores and pausing sourcing from Russia as well as Belarus, an ally of Russia
“The war has both a huge human impact and is resulting in serious disruptions to supply chain and trading conditions, which is why the company groups have decided to temporarily pause IKEA operations in Russia,” IKEA and Ingka Group said, according to Reuters.
Nike
Nike said it would temporarily shut down all its stores in Russia, a move that followed the sportswear company making purchases on its website and app unavailable in the country.
TJX Cos
TJX, which owns U.S. chains Marshall’s, TJ Maxx and Home Goods, plans to sell its 25% stake in Russian apparel retailer Familia. TJX does not have sales in Ukraine or Russia, it said in a regulatory filing. TJX’s stake was worth $186 million before the Russian ruble’s precipitous fall.
Visa, Mastercard and American Express
Visa and Mastercard said that they were suspending their operations in Russia, days after blocking transactions for Russian banks targeted by U.S. and European sanctions, and American Express followed suit.
Visa and Mastercard’s suspensions were announced within 16 minutes of each other, and they followed a private video call earlier in the day between President Volodymyr Zelensky of Ukraine and U.S. lawmakers. During that conversation, Zelensky “asked us to turn off MasterCard and Visa for Russia,” Representative Brad Sherman, a Democrat from California, tweeted. “I agree,” he added, before Mastercard and Visa made their announcements. American Express additionally said that they would also terminate all business operations in Belarus.
McDonald’s, Coca-Cola, PepsiCo and Starbucks have also halted business in Russia.
Sources:
Reuters
CBS News
SKY News
