February 27th, 2022
Russia launched a full-scale military invasion into Ukraine this week and fighting has caused already over three hundred civilian casualties and pushed hundreds of thousands of Ukrainians to flee to neighbouring countries.
The economic fallout could have a major financial impact on people around the world - from the availability of food to the cost of energy and petrol. Europe is already paying high prices for energy and fuel and the conflict is expected to drive these even higher and has already caused the oil price to jump to its highest level in more than seven years, while future gas prices have increased 60% in just one day. Russia is the second-biggest exporter of crude oil, and the world's largest natural gas exporter, which is vital to heating homes, powering planes, and filling cars with fuel. And it is worth reminding that the EU sources nearly half of its gas from the country.
In the food sector, both countries export about a quarter of the world's wheat and half of their sunflower products, like seeds and oil. Ukraine also sells a lot of corn globally. Analysts have warned that war could impact the production of grains and even double global wheat prices. In this context, what should the role of Responsible Businesses be? This is yet again another acid test for many companies, just when the world is emerging from a global pandemic where that test was very real. What we have learned from the pandemic is that many corporations have really passed the test proving that being a Responsible Business is very much part of their strategies and any sort of crisis can only help to reinforce their positioning.
Is this not the time for corporations to take a stand and come public with a clear condemnation of the aggressor? If Larry Fink from BlackRock took a position on the brutal murder of George Floyd, or Alan Jope from Unilever on the south African athlete Caster Semenaya, or Marc Benioff from Salesforce on the abortion case in Texas, is this not such a significant event that they need to come forward and take a clear and decisive stand?
Is this not the time for companies to create their own basket of “economic sanctions” reconsidering for instance where their supplies come from?
Is this not the time for instance for the more responsible companies in the Oil sector to come forward and commit to investing all “extra cash” from the high crude prices in their renewables strategy, thus reinforcing any sort of plans they have already announced?
And so forth, many other questions could be asked in this context. This is yet again another opportunity for Responsible Businesses to rise up to the challenge and position themselves on the right side of History.
Nuno Moreira da Cruz Executive Director Center for Responsible Business and Leadership
