As Russia Rattles Nuclear Sword, Corporate Leadership Wakes Up

Russian President Vladimir Putin accomplished the unthinkable when he leveraged his nation’s nuclear weapons capability to launch an unprovoked attack on Ukraine. Most likely he and other leaders in Russia assumed that Ukraine and its allies would capitulate when faced with catastrophe on a global scale. However, he did not count on the power of global business leaders to throw the Russian economy into chaos, setting the stage for the possible collapse of his government.

NATO can’t act against Russia …

Putin pulled the trigger against Ukraine under the correct assumption that the governments of the North American Treaty Organization (NATO) cannot deploy their forces in Ukraine without touching off a third world war.

NATO nations can still supply weapons and other aid, but Putin apparently calculated that his “friend,” former President Trump, had successfully weakened the alliance, rending it less capable of organizing effective aid. Trump spent his term in office insulting NATO and threatening to pull the U.S. out altogether, while reportedly attempting to extort Ukrainian President Volodymyr Zelenskyy by withholding a weapons deal that had already been approved by Congress.

Current President Joe Biden is widely credited with unifying NATO and other nations in a coordinated response. Still, NATO must act with extreme caution to avoid widening the conflict, and Putin has added fuel to the fire by threatening nuclear war.

…but corporate leaders can

Against this backdrop, the actions of corporate leadership are of critical importance. Putin can leverage the international laws of warfare and threaten the nations of Europe with nuclear catastrophe, but there is little he can do against a global commercial network distributed throughout Russia and among practically every nation on Earth.

Within days of Russia’s invasion, dozens of global brands publicly announced they are shutting down their operations in Russia, including at least four leading oil and gas stakeholders: BP, Shell, Equinor and ExxonMobil.

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The corporate response has also been taking place behind the scenes. Shortly after the attack began, Ukraine’s vice prime minister, Mykhailo Fedorov, tweeted an appeal for help directly to Silicon Valley tech companies. Though not all launched an effective response, those that did made a significant impact.

Apple has stopped selling its products in Russia. Google, Facebook and Twitter have been working to counteract Russian disinformation on their platforms, while also cutting Russia’s state media off from ad revenue. Google and Microsoft have also deleted Russia’s state controlled media from their app stores, and last week Facebook’s parent company, Meta, banned Russia’s RT and Sputnik media altogether.

In addition, Microsoft, Amazon and Google have been aiding in cybersecurity efforts while preventing Russia from making strategic use of their publicly accessible data.

Leaders in the all-important semiconductor chip industry have also halted shipments to Russia, including Intel, AMD, Samsung and the Taiwanese firm TMSC.

A bottom-line motivation for the do-gooders

Consumers have already been sensitized to corporate track records on human rights and social responsibility, and that is another development that Putin apparently miscalculated. Even if corporate leaders don’t really care about Russian atrocities in Ukraine, they do care about the bottom line.

Ukraine has taken its case to the court of public opinion, and there is simply no contest. While Putin continues to feed lies to the Russian public, the rest of the world is well aware that the supposed “special operation” to “liberate” Ukraine from “Nazi” oppressors is transparently false, and that Russia is deliberately terrorizing Ukraine’s civilian population.

Millions of people – that is, consumers – around the world are contributing to aid organizations and advocating for Ukraine, making it all but impossible for leading household brands to continue doing business in Russia indefinitely.

The Ukraine Corporate Index

Some consumer advocates have criticized corporate leaders for being slow to act, and that may be so. However, as Russian atrocities in Ukraine continue to mount, the corporate reaction has intensified.

Against this backdrop, it was only a matter of time before consumer groups organized an index around the corporate response to Russian atrocities in Ukraine, making it easy for individuals to identify the position of their favorite brands.

Last week, the European Union grassroots organizing group The Good Lobby joined with the U.S. campaign finance group Progressive Shopper to set up just such an index.

“Since the Russian invasion of Ukraine started, a growing number of companies have stopped operating in Russia. Yet most of the corporate world remains silent. As we believe that the fastest way to end the war is to stop trading with Russia, divest Russian assets and refuse to finance Putin’s regime, The Good Lobby and Progressive Shopper have established the Ukraine Corporate Index,” the two groups explain.

The color coded, alphabetical list enables consumers to tell at a glance if their favorite brand has already dropped its operations in Russia (green), is in the process of cutting at least some ties (yellow) or has not yet taken any meaningful action (red).

Each listing also includes the company’s Twitter handle, providing a convenient pathway for consumers to share messages of praise or scorn, as the case may be.

Organizing the media for action

The Ukraine Corporate Index would probably remain in a media backwater, but on March 4 Forbes senior contributor Edward Segal drew attention to the effort, noting that “many businesses, such as Apple, Nike and IKEA were quick to pause or cancel their activities and relationships with Russia.”

He also contrasted those companies with others, “such as McDonald’s, Starbucks and KFC that have thousands of stores in Russia, have yet to be heard from.”

McDonald’s has since announced it would temporarily close its 850 restaurants and “pause” operations in Russia.

It remains to be seen whether or not awareness of the Ukraine Corporate Index grows significantly, though its impact can be amplified by coverage like the article in Forbes. Watch for similar lists: The Yale School of Management announced yesterday that daily, it will start tracking companies that have quit doing business with Russia.

In the meantime, Forbes and other media are helping to amplify and spread the word to millions of consumers by tracking the corporate response on an ad hoc basis.

Earlier this week, for example, CNN posted a sector-by-sector list of leading corporations that have halted or suspended operations in Russia. Among the most impactful are those in the financial sector. As described by CNN, Norway’s $1.3 trillion sovereign wealth fund is divesting from Russian companies and government bonds. Mastercard and Visa have suspended part or all of their operations. Other finance-related firms, including Moody’s and KPMG International, have also left the country.

Russia may yet pound Ukraine into submission, at the cost of thousands if not millions of lives. However, Putin has forced a reckoning for governments, citizens and business leaders alike.

If Putin “wins” Ukraine, that will mark the beginning, not the end, of a war that pits the unstoppable force of global consumer sentiment against the regime of a brutal dictator.

Image credit: Gayatri Malhotra via Unsplash