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March 18, 2022, 5:39 p.m. EDT

Yale professor is keeping tabs on companies still operating in Russia despite Ukraine invasion — and many have now pulled out

By Ciara Linnane

A Yale professor and his research team are keeping tabs on companies that are still operating in Russia in the wake of its invasion of neighboring Ukraine — and many have responded by announcing plans to withdraw, with the pace of the announcements quickening through the week:

The situation remains fluid, but for now the list includes Coty Inc. (NYS:COTY) , Dunkin’ Donuts , Schlumberger Ltd. (NYS:SLB) and Otis Worldwide Corp. (NYS:OTIS) .

Non-U.S. companies on the Yale list, headed up by business-school professor Jeffrey Sonnenfeld, include Nestlé (SWX:CH:NESN) and Pirelli (MIL:IT:PIRC) .

A handful of household-name companies managed to get off the list.

McDonald’s Corp. (NYS:MCD) announced it would temporarily close all of its 850 restaurants in Russia but continue paying its 62,000 workers, the Associated Press reported.

Coca-Cola Co. (NYS:KO) and Starbucks Corp. (NAS:SBUX) said that they, too, were pausing operations there. Starbucks has 130 locations in Russia.

Food and beverage giant PepsiCo. (NAS:PEP) said it was halting sales of Pepsi-Cola and other soft drinks including 7Up and Mirinda, and also suspending investments and advertising and promotional activities in Russia.

PepsiCo has “a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food,” the company said .

The continuation of some operations also supports “the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain as they face significant challenges and uncertainty ahead,” it said.

See: U.S. and its allies to revoke ‘most favored nation’ status for Russia

Kellogg Co. (NYS:K) was removed: “We have already suspended all shipments and investments into Russia,” Kellogg spokesperson Kris Bahner told MarketWatch.

Honeywell International Inc. (NAS:HON) also suspended business in Russia.

“Given the current conditions in Eastern Europe, we have suspended substantially all of our sales, distribution and service activities in Russia and Belarus. We continue to evaluate the situation,” the company told MarketWatch.

Yum Brands, parent to Pizza Hut and KFC, said it has s uspended all investment and restaurant development in Russia. The company has about 1,000 KFC restaurants and 50 Pizza Hut locations in Russia, nearly all of which are franchise-operated.

And tobacco company Philip Morris International Inc. (NYS:PM) said it was suspending investment in Russia and activating a plan to scale back manufacturing .

That was followed by Papa John’s International Inc. (NAS:PZZA) , which said it has suspended all corporate operations as it condemned the Ukraine invasion. Papa John’s has 186 restaurants in Russia, but they are all owned by franchisees, and it doesn’t receive any royalties.

Sporty footwear and apparel company Skechers USA Inc. (NYS:SKX) said it would temporarily suspend shipments to Russia following its invasion of neighboring Ukraine. The company said it’s also donating $250,000 in humanitarian aid to Ukraine and matching employee donations up to another $250,000. 

And S&P Global Inc. (NYS:SPGI) said it would suspend commercial operations in Russia, just a week after downgrading Russia’s sovereign rating further into junk territory.

Oreo maker Mondelez International Inc. (NAS:MDLZ) announced Wednesday that it would scale back all non-essential activities in Russia, “while helping maintain continuity of the food supply during the challenging times ahead.”

Caterpillar Inc. (NYS:CAT) said it was suspending operations at Russian manufacturing facilities and donating $1 million to Ukraine through its Caterpillar Foundation.

Deere & Co. said it has suspended shipments of its farm and construction equipment to both Russia and Belarus, the Wall Street Journal reported.

On Thursday, German fashion brand Hugo Boss (ETR:XE:BOSS) said it has temporarily closed its stores and suspended its own retail and e-commerce business activities in Russia. The company said it will give all affected employees “financial and operational support.”

Russia, along with Ukraine, accounted for about 3% of Hugo Boss’s total sales last year.

The Hilton hotel chain (NYS:HLT) said it’s closing its corporate office in Moscow and suspending new hotel development in Russia. Russian workers will continue to be paid, the company said.

Hilton’s 26 hotels in Russia remain open. They are owned and operated by franchisees, but Hilton said it is donating any profits from those hotels to relief efforts in Ukraine. Hilton said it has also donated up to 1 million room nights to support Ukrainian refugees.

Wall Street titan Citigroup Inc. (NYS:C) also said it would wind down its Russian banking business and will be “operating the business on a more limited basis” until a sale happens.

And Arconic Corp. (NYS:ARNC) said it would pause new contracts in Russia. The company has a facility in Samara, Russia that produces sheets, plates, extrusions and forgings.

On Friday, spice maker McCormick & Co. (NYS:MKC) said it would suspend its Russia operations.

And Mars, the privately held confectionery company, s aid i t will scale back its business and “refocus our efforts in Russia on our essential role in feeding the Russian people and pets. Any profits from our Russian business will be used for humanitarian causes. We have suspended new investments in Russia and will not import or export our products in or out of Russia. Our social media and advertising activity in Russia and Belarus will remain suspended.”

For the full list of companies: Visit the Yale School of Management website

Sonnenfeld acknowledged Thursday that his effort has met with some success.

When the list was first published on Wednesday, March 2, only several dozen companies had announced their departure, he said.

“Hundreds of companies have withdrawn in a mass corporate exodus from Russia in the eight days since, and we are humbled that our list helped catalyze millions around the world to raise awareness and take action,” he said.

Companies have a reputational incentive to withdraw, despite any loss of investment or business, Sonnenfeld wrote in Fortune on Monday.

“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,” he wrote.

He cited a Morning Consult survey that found more than 75% of Americans want companies to cut their business ties with Russia and are united on the subject across political lines in a way that has become quite rare.

See also: Facebook, Google, Amazon and more marked Black History Month with fanfare — after donating to lawmakers who blocked voting-rights bills

Sonnenfeld also argued that those who fear that such corporate moves and government-imposed sanctions will punish ordinary Russians are missing the point that they would impose pain, but not the violence of war, which would be far more painful.

“Vladimir Putin, the most vicious autocrat of this century, rules through tyranny and fear. As he continues to fail, people will lose their fear and he will lose his power,” Sonnenfeld wrote.

He said in an MSNBC interview early Wednesday that the goal is “to create some hardship on the Russian economy” and to shatter Putin’s self-image as “in control of all sectors.”

Sonnenfeld said that one might normally expect that consumer-facing companies would be the first to express distaste for Putin’s actions — those sorts of companies have been most active in speaking out against U.S. states’ new limitations on voting rights and in favor of gun-safety legislation, the Yale professor observed — but heavier-industry companies have of late been on the front foot.

Ask the Dow (April 2021): Here’s what the 30 Dow industrials companies are saying about new voting restrictions

One factor for consumer-oriented brands is gauging how they’ll successfully re-enter the Russian market when the time comes, Sonnenfeld told MSNBC’s “Morning Joe” program, assuming the Russian consumer base continues to have “its news filtered by Pravda, you know, and TASS.”

See: Russia intensifies crackdown on independent media

Also: After years of living in Moscow, I have bad news: No one should expect the Russian people to suddenly rise up against Putin now

The list of companies that have withdrawn from Russia or curtailed their business there is longer, at more than 200, and includes big hitters Alphabet Inc. (NAS:GOOGL) (NAS:GOOG) , American Express Co. (NYS:AXP) , Apple Inc. (NAS:AAPL) , Cisco Systems Inc. (NAS:CSCO) , Walt Disney Co. (NYS:DIS) , IBM Corp. (NYS:IBM) and Netflix Inc. (NAS:NFLX) .

MarketWatch has contacted all companies named in this story for comment.

The Yale list is being updated daily.

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