New Index Tracks How Brands And Companies Respond To Ukraine Crisis
FORBES – To help track businesses’ responses to the escalating crisis, the Ukraine Corporate Index was launched today by The Good Lobby, a nonprofit civic participation organization, and Progressive Shopper, which tracks political contributions.
To help track businesses’ responses to the escalating crisis, the Ukraine Corporate Index was launched today by The Good Lobby, a nonprofit civic participation organization, and Progressive Shopper, which tracks political contributions.
AFP VIA GETTY IMAGES
How and when companies react to a crisis can send important messages to consumers, the public and stakeholders about their priorities and values.
A prime example is Russia’s invasion last week of Ukraine.
Many businesses, such as Apple, Nike and IKEA were quick to pause or cancel their activities and relationships with Russia. The list continues to grow. Some companies, such as McDonald’s, Starbucks and KFC that have thousands of stores in Russia, have yet to be heard from.
Ukraine Corporate Index
To help track businesses’ responses to the escalating crisis, the Ukraine Corporate Index was launched today by The Good Lobby, a nonprofit civic participation organization, and Progressive Shopper, which tracks political contributions.
More than 70 companies are on the new Index. Organizers said additional ones will be added in new industries, with the goal of comparing their actions to those of their competitors. The Index will track all brands no matter where they are headquartered—but only if they are available in Russia. Updates will be publicized via social media.
According to their press release, although “… most of the corporate world remains silent… 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.”
Goals
The Ukraine Corporate Index “intends to inform investors, customers and citizens about whether and how their companies and brands are positioning themselves in the ongoing conflict. Its aim is to lead these stakeholders to reassess their investment and shopping decisions by praising responsible corporations while shaming irresponsible ones,” the release said.
The color-coded Index lists companies, their brands, the actions they have taken or statements they have made about the crisis, the source of the information and their Twitter handle. Sample entries include:
- Adidas: Suspending its partnership with the Russian Football Union
- Boeing: Pausing “parts, maintenance and technical support services for Russian airlines,” and had also “suspended major operations in Moscow and temporarily closed our office in Kyiv.”
- Ford: Suspended its operations in Russia
- Microsoft: Remove Russian state-owned media outlet RT’s mobile apps from the Windows App store and ban advertisements on Russian state-sponsored media. Helped counter cyberattacks.
- Oracle: Halt all operations
- Warner Brothers: Pause the release of The Batman in Russia
The Index could hit a responsive chord with consumers and investors by helping them monitor how or if brands and companies respond to the war in Ukraine—and perhaps place additional pressure on business leaders to react sooner rather than later.
‘Possible To Take Action’
Jeff Galak, an associate professor of marketing at Carnegie Mellon University’s Tepper School of Business, said yesterday that, “As individual consumers, it is possible to take action against the government of Russia by boycotting products that continue to do business with Russia or that continue to provide financial benefit to its government and people.’’
‘Consumers And Citizens Deserve To Know’
Alberto Alemanno, founder of The Good Lobby said that, “After professing the virtues of environmental, social and governance factors (ESG), most companies don’t seem to walk the walk when it comes to the ongoing social and governance violations committed by such an invasion. Investors, customers, and citizens deserve to know on which side of the Russian-Ukrainian conflict their companies and brands stand for,”
Alemanno is a permanent visiting professor at the University of Tokyo School of Public Policy and a fellow at The Rutgers Institute for Corporate Social Innovation at Rutgers University.
‘The Private Sector Cannot Stay On The Sidelines’
Mark Hanis, founder of the Progressive Shopper, said that, “The private sector cannot stay on the sidelines of this crisis and must take a stand against Russia. Consumers expect CEOs to show the same leadership as most political leaders and will judge them accordingly.
“As long as Putin is invading Ukraine, these companies should leave Russia,” he concluded.
Challenges
Some brands—including major retailers—could face challenges in curtailing their operations in Russia, according to Aleksandar Tomic, an associate dean for strategy, innovation and technology at Boston College.
He observed that, “Any leverage in this matter depends on the structure of the arrangements in Russia. Oftentimes, U.S. retailers are either franchisees or independent wholesalers, meaning that the retailer may or may not be able to close the stores.
“When companies own the stores, I expect they will shut them down if they have not already in order to not violate sanctions as there can be fines and other penalties for violations of sanctions.
“Retailers do not have much business interest in staying open given the trouble with any financial flows in the current environment. However, even though Russia is under sanctions, there will still be trade, especially because countries like China have not imposed sanctions yet. So, individual wholesalers or franchisees might not be as quick to shut down (if at all), especially in cases where they have inventory and/or alternative sources of merchandise,” Tomic concluded.