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the dilemma of foreign companies

Editorial of the “World”. The line between pragmatism, realism and cynicism is often fine in the business world. It is now difficult to hold for foreign companies still present in Russia, despite the international sanctions imposed in retaliation for the invasion of Ukraine. A month after the aggression perpetrated by Vladimir Putin’s regime, growing pressure is exerted on those who have chosen to stay. France, the second largest foreign investor in the country, finds itself acutely confronted with this dilemma of deciding between ethics and business.

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The responsiveness of companies and their ability to take radical decisions often depend on the weight of their activities in Russia in their turnover. Closing a few stores as luxury groups have resolved to do and accepting to lose a few million euros in profits obviously does not have the same impact as giving up billions of investments in industrial facilities (Renault or TotalEnergies) , as well as parting with a local bank which has 2 million customers (Societe Generale).

Leaving in haste without having weighed the consequences for the employees, the Russian population and the financial equilibrium of the company is not necessarily the guarantee that the sanctions against the Putinian system will be effective. Abandoning assets overnight can even make the business of the oligarchs, who will be happy to take them back at a bargain price, while continuing to run the business. In this field, as in that of energy supply, we must be wary of simple solutions to eminently complex problems.

Risky strategy

Still, some companies are playing for time by counting on a rapid return to normal. This strategy is risky, because there is no guarantee of a short-term outcome to the conflict. Above all, there will undoubtedly be time, even after the fighting has stopped, before Russia returns to the concert of nations.

At the same time, these groups must overcome complicated reputational issues. By denouncing the attitude of three of our flagships to French parliamentarians, Volodymyr Zelensky, the Ukrainian President, has set in motion an effective mechanism with public opinion. “Renault, Auchan, Leroy-Merlin and others must stop sponsoring the war machine”, accused the Ukrainian president. Faced with this burden, the discourse of companies, which pride themselves on being “socially responsible”, risks ringing more and more false as the atrocities in the combat zones increase. Renault, which eventually realized that the situation was becoming untenable, is now ready to withdraw from Russia.

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The pressure of public opinion should not only be exerted on companies. They can repeat that at this stage they are scrupulously respecting the framework of international sanctions. “My position is to leave companies free to decide for themselves”, insists Emmanuel Macron. If the international community considers that it is necessary to impose a clear and clear withdrawal from Russia, the competent bodies must assume their responsibilities by leaving no choice to companies. Counting on the goodwill of the latter is either hypocritical or naive. As soon as Westerners consider that the solution to loosening the noose on Ukraine involves more systematic sanctions, they must say so clearly and give themselves the means to apply them.

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