Another war, at a human cost, has changed the world. The scale of the Russian invasion is worrying the world, in particular some CEE countries. By devastating a “brother” country, Russia could win the war, but not the peace. Almost two weeks of atrocities are already more than enough. We can’t accept what our eyes witness. We are completely appalled. War is never a good idea. At Moeeda we are against any form of war or violence at all. We don’t have any expertise to comment on reasons and more why this happened. Moeeda is not a geopolitical blog and surely it won’t. Throughout Ukraine's history, the sunflower has been used as a symbol of peace, planted by US, Ukraine and Russian defence ministers to celebrate the abandoning of nuclear weapons. We can only encourage all in our community to stand for peace. Stop the war, plant sunflowers!
Back at our principal mission, watching the world under an ESG lens, we can note an ever-growing “S” and “G” impact in these geopolitical tensions. Social and governance principles, that measure the business ethic and how a company creates value for its stakeholders and its local community, led many firms to stop any involvement with Russian counterparties and politicians after the surging of negative geopolitical externalities.
Investors have sold assets and quickly interrupted any links with Russia - booking hefty writedowns. BP has planned to divest its stake in Rosneft and Shell to quit any participation with Gazprom. ExxonMobil has discontinued operations in the Sakhalin-1 project, a partnership with Gazprom. Daimler has ended the partnership with Kamaz; Volvo, Jaguar Land Rover and BMW have halted deliveries to the country. Apple has stopped any delivery and suspended sales in Russia; MSC and Maersk have pulled up shipping to Russia. We can continue even considering sanctions, but it is clear that global capital flees Russia. This unprecedented isolation has an indirect effect of making the Russian economy and the population poorer - a tragedy for Ukraine and Russia.
The list of names blacklisting Russia is growing. Many western corporations blocked any investment and contact with Russian counterparties to comply with the new sanctions and to avoid any pressure or worries about risk. Being ESG compliant means in some way dealing with these compliance and reputational risks - the moral choice should be taken into account as well. Social responsibility and corporate actions have become very important and damaging the company’s image could cost more than any penalty.
The Russian war in Ukraine is definitively not an ESG story, but we can’t exclude that businesses rushed to distance themselves from Russia even considering their ESG commitments, practices and performances. Nowadays, the field of ESG matured and all its dynamics around put international companies to deal with any situation even considering the sustainability impact.
Comments