Pepsi, Citi: Yale Professor Lists Businesses That Have Stayed In Russia

Western businesses have exited Russia in protest of President Vladimir Putin’s decision to launch a war against Ukraine. For all the symbolic importance of these moves, some companies are choosing to remain.

On Tuesday, Jeffrey Sonnenfeld, a professor at Yale University’s School of Management, released a list cataloging the businesses that have decided to leave Russia since the war began on Feb. 24. The list amounted to about 250 companies from Apple, Disney and even the Bank of China.

Yet Sonnenfeld was able to identify at least 200 companies that are not following suit and these, too, include some heavyweight names and franchises. They include McDonald's, Citibank, Pepsi and Starbucks.

In an article in Fortune on Monday, Sonnenfeld wrote that there are a competing number of reasons why some businesses are choosing to stay while others are finding it easier to leave. He said that for companies engaged in finance or heavy industry, it is easier to leave than it is for businesses that provide consumer goods, but the professor warns this will carry reputational risks.

"Despite the cost of abandoning major investments and the loss of business, there is a strong reputational incentive to withdraw. Companies that fail to withdraw face a wave of U.S. public resentment far greater than what they face on climate change, voting rights, gun safety, immigration reform or border security," wrote Sonnenfeld.

This has already been playing out in the backlash some of these companies have endured over their choice to remain in Russia. The hashtags #BoycottCocaCola, #BoycottPepsi and #BoycottMcDonalds were trending on Twitter over the weekend as the movement to boycott the companies’ products over their stay in Russia gathered steam.

According to a Morning Consult poll conducted on Feb. 28, four days after Putin attacked Ukraine, three out of four Americans said that they would like to see companies take some action in response to the invasion.

Providing financial assistance to Americans looking to return from #Ukraine and to employees affected by the invasion are the actions most supported by U.S. consumers, as 78% of respondents “strongly” or “somewhat” support brands taking these actions. https://t.co/dhOuHdB68Q pic.twitter.com/fNibC3iCp4
— Morning Consult (@MorningConsult) March 1, 2022

William Browder, CEO of Hermitage Capital in London and one of Putin’s most ardent critics, criticized the businesses that opted to maintain operations in Russia and urged consumers to turn their backs on them.

“They need to withdraw as soon as possible,” Browder tweeted on Tuesday. “If not, they should be boycotted in the West. Profits over national security are unacceptable.”

Most importantly, here’s the list of companies that continue to do business with Russia. They need to withdraw as soon as possible. If not, they should be boycotted in the West. Profits over national security is unacceptable pic.twitter.com/7uhVvXtkCI
— Bill Browder (@Billbrowder) March 8, 2022

This pressure appears to be taking effect on some of the companies Sonnenfeld identified. As calls for a boycott online grew, McDonald's announced that it would be temporarily suspending its operations in Russia.

In a statement, McDonald's lamented how its decision would impact the 62,000 Russians it employees or the customers who frequent its 850 restaurants across the country. However, the company said it would go ahead with its choice while continuing to pay its Russian employees.

Last week, CitiGroup reported in a regulatory filing that it was looking to sell its retail banking services in Russia to move out of the country. According to the Financial Times, Citi is among the most exposed banks on Wall Street in Russia through its nearly $10 billion in assets, including deposits held by Russia's Central Bank, which was sanctioned by the U.S.