A professor at Yale University, who oversees companies doing business in Russia following a provocative invasion of neighboring Ukraine, has reclassified the list into five categories, the fifth entitled “Digging”. , Or by resisting the public’s demands for the exit, strengthened the positive attitude.
Approximately 39 companies, including Koch Industries Inc., packaging company Ball Corp. BLL, and cybersecurity company Cloudflare Inc. NET, will remain in this category four weeks after the attack begins.
Since the list was first published by Jeffrey Sonnenfeld of the Yale School of Management and his research team, more than 450 companies have announced plans to withdraw or reduce their activities. The situation is fluid for now as the Yale team updates the list daily.
look: Yale University professors continue to monitor companies operating in Russia despite the Ukrainian invasion.
“The idea here is to stall the Russian economy,” Sonnenfeld told MarketWatch. “That’s what Gandhi did. [in India]That’s how Ceausescu was taken out of power in Romania, [and] That led to the collapse of PW Botha in South Africa and the freedom of Nelson Mandela.
“In all these cases, it was important to have voluntary business blockades work in parallel with economic sanctions, so people are becoming Paria and things are being told by their leaders to them. You can hear what we are not saying … When the entire world economy participates, it is a much tighter circle. ”
Koch, Wichita, run by Republican billionaire mega-donor Charles Koch, made clear its intentions in a statement signed by Chief Operating Officer Dave Robertson last week. According to a statement by Robertson, Koch will continue to operate two Russian glass facilities owned by Guardian Industries, which was acquired in 2017.
“Guardian’s business in Russia is only a small part of Koch, but he does not leave his employees or hand over these manufacturing facilities to the Russian government, he reported that they would do so),” Robertson said. Said.
look: Koch Industries has broken silence about Russia’s operations and says it will continue to operate two glass factories.
Executives acknowledged the “horrible and abominable attack on Ukraine,” which he called “insulting humanity.”
But when Ukrainian President Volodymyr Zelensky addressed the US Congress on a videolink last week, it wasn’t enough to convince Koch to withdraw from Russia, as he urged businesses to do so.
“All American companies have to leave [the Russian] It’s full of our blood, so get it on the market right away, “Zelensky said.
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Sonnenfeld described Koch’s statement as “poor,” saying that “they only care about the loss of assets.”
Besides “digging”, the other four categories of the ale list are “withdrawals”, which are used by companies that take a complete break from Russia. A “pause” for companies that are temporarily reducing their activity with the return option open. “Scale back”, or continue other activities while reducing some activities. And “purchase time” for companies that are deferring new investment while continuing most of their business.
For a complete list of companies: Visit the Yale School of Management website
According to Sonnenfeld, companies that choose to dig deeper, especially when they expect young people to reflect their values and are willing and capable of mobilizing them when corporate behavior is disappointing. , Faces considerable reputational risk.
“Gen Z is very careful about where to shop, who to buy from and where to invest,” he said.
When Yale first released its list in late February, the stock market fell about 5% that day, but stocks of companies on the list fell from 12% to 32%, he said.
Sonnenfeld said the reaction from companies was unusual in that the first announcement of plans to withdraw from Russia was for energy companies that were “not always on the right side of the issue of social justice.”
In Sonnenfeld’s view, after this sector, from big three accounting firms to Accenture, McKinsey, and legal professionals, “more people jump off cliffs than involved in political affairs.” The service continued.
“It’s impressive that these companies made these decisions independently. Unfortunately, they weren’t even mandated or encouraged by the silent industry associations,” Sonnenfeld said.
Among the international companies that changed course this week and withdrew from Russia include French car maker Renault FR: RNO, which announced on Wednesday that it will shut down its Moscow plant. Renault, which is affiliated with Russia’s largest car maker AvtoVAZ, faced a demand for boycotts of its products on social media.
look: Production stopped at AvtoVAZ plant, which manufactures Russia’s iconic Lada car
Switzerland-based global food company Nestle CH: NESN has succumbed to similar pressures and said it would stop selling the KitKat and Nesquik brands in Russia. The company said last week that it was not benefiting from Russian activity.