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Weekly Short
4 March, 2022
Wars are fought on many fronts. On the ground, in cyberspace, and also in the economic sphere. And this means that businesses, like it or not, have difficult decisions to make when conflict erupts.
On one front, we’ve seen an outpouring of generous, creative responses to the horrors in Ukraine. Many businesses paid staff and suppliers early so that they could stock up on essentials in advance of the Russian attack. UK telecoms firms opened their networks so people could contact friends and family in Ukraine for free. Ryanair pivoted from carrying stag parties to humanitarian aid cargo. Google disabled its live traffic features on Maps to protect Ukrainian citizens from advancing Russian troops.
But in a sense, that’s the easy part. What does that same creativity, generosity and moral clarity look like for businesses with a presence in Russia? In some cases the answer is straightforward (on paper, at least). Divest your stake in Russian-state owned assets. Stop selling planes and parts to Russian airlines. Pull Russian propaganda from your network. The number of businesses divesting or suspending sales in Russia is growing by the hour. For these businesses, such measures, though commercially painful, send a clear and unambiguous message to the Russian leadership and will make life harder for the regime in different ways.
For those businesses that employ, sell to, and support the Russian people with essential products and services, it can be harder to know how to respond. This is Putin’s war, not—as far as we can tell —the Russian people’s war. Social inequality and poverty levels in the country are staggering. As the Ruble crashes and the banking system comes under pressure, life for Russian people is getting much more challenging. They need, and will continue to need, jobs, medicine, food, and other essentials. Economic sanctions and corporate boycotts will make these much harder to come by. It’s not always as simple as immediately pulling down the shutters and walking away, though many may decide to go down that route. And as supply lines and payment channels seize up, the decision may eventually be made for businesses rather than by them.
What businesses can do and should look to do through their actions is to clearly communicate their position to Russians. In a country where the truth is at a premium, be as clear as you can, speak up, and speak out. For luxury retailers like Apple, withdrawing online retail presence may lead Russian consumers to question why Apple doesn’t want to sell to them anymore. For other businesses, talking and engaging with Russian suppliers to explain why you are pausing operations may be appropriate.
These are agonising decisions. But they are for each business to make on its own terms, considering its circumstances and responsibilities. The imperative for everyone, however, is clarity and communication. Businesses should say what they think, stand up for what they believe, and set out what they plan to do. Silence is not an option.
By Claire Jost