Russia's War Spurs Corporate Exodus, Exposes Business Risks

Auto shipments stopped, beer stopped flowing, cargo ships dropped port calls and oil companies cut their pipelines.

Russia’s invasion of Ukraine has thrown business plans into disarray and forced a growing number of the world’s best known brands — from Apple to Mercedes-Benz and BP — to pull out of a country that’s become a global outcast as companies seek to maintain their reputations and live up to corporate responsibility standards.

Investors were drawn to Russia in search of lucrative profits they thought were worth the geopolitical risks. That calculation has changed after Russian President Vladimir Putin launched war in Europe, triggering a wave of global sanctions and export restrictions that have thrown its economy into turmoil and disrupted the operations of multinational corporations there.

“You basically have Russia becoming a commercial pariah,” said economist Mary Lovely, a senior fellow at the Peterson Institute for International Economics in Washington. “Pretty much no company, no multinational, wants to be caught on the wrong side of U.S. and Western sanctions.”

They’re also expressing concern about the plight of Ukrainians, showing how they want to be seen coming out on the right side of history.

Complicating companies’ push to flee is an order from Moscow temporarily restricting foreign investors from selling Russian assets. Prime Minister Mikhail Mishustin said that it would help investors make “a considered decision” rather than succumb to the political pressure of sanctions. It’s not clear how that may affect corporate efforts to exit Russia.