4 July 2022

Russia’s assault on Ukraine prompted one of the biggest stampedes for the exit by foreign businesses any country has ever witnessed. Investments built up over years, totalling billions of dollars, are being wound up or sold. But the process is far from complete, even by companies that pledged to pull out, and Moscow has escalated its response. Vladimir Putin last week ordered all rights to the huge Sakhalin-2 liquefied natural gas project to be transferred to a Russian entity — the first time the Kremlin has nationalised a company since the corporate exodus began.

Partners in the far eastern Sakhalin-2 — Shell, Mitsubishi and Mitsui — have one month to decide whether to remain stakeholders in the new entity, or opt out and risk not being fully compensated...

The affair highlights the fact that leaving Russia is much more difficult than declaring the intention to do so. Companies face tricky legal, operational and ethical considerations. Some that said they would leave have not done so fully, prompting accusations of hypocrisy against western business...

But companies pulling out have limited options. Shutting down could leave Russian employees jobless; partly for that reason, the Kremlin initially threatened to nationalise assets of exiting companies, but before last week had shown little sign of doing so. Finding buyers can be hard when so many businesses are leaving...

Many foreign businesses feel an understandable sense of moral responsibility to local staff — especially when Moscow propaganda channels are painting western countries as engaged in an unjustified campaign against Russia and its people...

There is a compelling case for most western companies — except those selling, say, vital medicines — to join this effort. If they have to close Russian operations, they should offer local staff the same terms as if they were withdrawing for purely business reasons. There is another way to help, too. With recovery costs now put at more than $750bn, companies should heed the pleas of President Volodymyr Zelenskyy — and redirect their Russian investments, and more, to rebuilding Ukraine after the conflict.