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Russia-Ukraine War Triggers New ESG Considerations

Russia’s invasion of Ukraine has forced companies to navigate a new world order and re-examine their ESG priorities.

By Dave Curran & Brad Karp | May 09, 2022 at 02:05 PM
An illustration of refugees from Ukraine. pronoia - stock.adobe.com

Russia’s unprovoked, brutal attack on Ukraine in February prompted a global crisis with far-reaching impacts, reverberating into the C-suite at businesses across the United States. Shareholders and consumers now expect companies to account for any ties they have to Russia or Russian affiliates. Executives have been forced to navigate a new world order that emerged overnight.

As we have seen from the Russian invasion, there is often little time to respond, and delay is not an option. One day it was acceptable for companies to invest or operate in Russia, and the next day, companies were grappling with whether and how to divest their Russian operations. Some organizations were required to cut ties with Russian interests because of prohibitions imposed by the U.S. sanctions list, while many other companies quickly pledged to pull out voluntarily.

But for some businesses—such as those that make necessities including diapers, baby formula, and medical supplies—withdrawal was more complicated, posing ethical dilemmas and risks. Ceasing business in Russia entirely might expose employees to risk. And how should companies respond if they are the sole source of provisions used in nurseries, schools, or hospitals, for example?

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