054 Companies + Geopolitics
I struggled to write something appropriate for this week. As with many people, my newsfeed has been flooded with attacks in Ukraine and images of mothers and children fleeing their homes. Ukrainian civilians, men, and women have taken up arms and volunteered to defend their cities.
Governments have responded swiftly in imposing trade sanctions against Russia. They have frozen financial assets, restricted trade on goods and commodities, and removed Russian banks from the SWIFT messaging system to isolate the country and hopefully deter the Russian President from further escalation.
Global economies and financial markets have barely had time to recover from the COVID-19 pandemic. Oil futures surged to above $110, the highest since 2014, and wholesale natural gas price in Europe spiked to $215 per megawatt-hour, more than doubled what it was a week ago.
Mutual shutting of airspace between nations and Russia means that alternative shipping routes need to be drawn up, increasing costs and delaying deliveries. Industries such as manufacturing face production disruptions because supply chains are broken, and factories can't get the necessary raw materials and parts.
I am not an expert on war or politics and will leave others to draw up scenarios of how this conflict could end. But we could come to a solution quicker and alleviate suffering by coming together. It is not the responsibility of governments alone nor non-profit organizations to support those who have lost their homes and need medical supplies.
Businesses should and have started to take a stand on the conflict. Oil and gas players, BP and Shell, announced that they will cut ties with Russia, selling their stakes in the country. Apple suspended product sales in Russia, Netflix and Disney paused releases, and Mastercard and Visa blocked Russian banks from their networks.
Companies and investment funds are divesting from Russia which proves more complicated and may result in asset write-offs and loss in investment value. Who will buy these assets? How might businesses balance their social responsibility with their responsibility to shareholders and investors? Implementing the divestiture may take longer than making the announcements.
Big tech has also stepped up. Meta, formerly known as Facebook, barred Russian state media ads, and Google disabled live traffic data in Ukraine for the safety of local communities on the ground. Microsoft is protecting Ukraine from cyberattacks and state-sponsored disinformation campaigns.
Given how vocal investors, customers, employees, and communities have been recently about the need for companies to take a stand, it is almost impossible for any business to stand apart from geopolitics at the moment and not be judged by that decision. There are decisions to be made based on legal and ethical risks, and responsibilities to employees and customers in both Ukraine and Russia. Operating in an interconnected world has implications for multiple stakeholders in both the short term and long term.
What are the implications and consequences of decisions made today?
Tech has brought help to Ukraine in different ways. Mykhailo Fedorov, Ukraine's Minister of Digital Transformation, has been using Twitter to enlist support for his country. As the nation's youngest minister at thirty-one years old, he tweeted Elon Musk, the SpaceX billionaire, to help Ukrainians stay online. Musk promptly sent Starlink terminals in response. The Ukrainian government has raised more than $50 million in crypto donations, more than ten times that of traditional funds so far.
More than a million Ukrainians have fled their homes. Companies have come forward to help. Wix, an Israeli software company for web development services, paid to transfer their Ukrainian employees to safety. FlixBus, a German intercity bus service, is offering free tickets to refugees to neighboring countries. Airbnb, the American online lodging marketplace, is offering free housing for refugees. Lyft and Uber, transportation companies, operating globally, paid salaries in advance to employees in Ukraine and are offering free rides between the borders of Ukraine and Poland.
How Communities are Built
Individuals are opening their homes and hearts to those in need, from providing shelter and food to helping to transport people. While we may not be positioned to support the same way, there are other ways to contribute.
The International Rescue Committee (IRC), a global humanitarian organization supporting refugees, has set up a donation page on their website to bring supplies and help settle those affected by this crisis.
Project HOPE, an international organization that brings supplies to on-the-ground medical workers in countries in crisis, has set up a donations page on its website where funds will go towards medical supplies and health services to refugees.
Amid news on the crisis, the United Nations' Intergovernmental Panel on Climate Change (IPCC), in its sixth assessment, reported on February 28 the widespread disruption in nature and to people globally as global emissions are expected to increase by 14 percent in the current decade. We already see the effects through stronger and more intense extreme weather events. Experts warned that failure to take action would outpace humanity's ability to adapt.
Russia supplies close to 40 percent of gas to Europe for heat and electricity, and the US purchases more than 200,000 barrels of oil daily from Russia. This crisis could accelerate efforts to reach renewable energy goals sooner rather than later. As individuals, we should be more conscious of our energy consumption to minimize further strain on the energy supply chain.
Finally, all of us must stay informed. Before forwarding or sharing any information, check for the source and ask if the story can be verified. A post that has been shared multiple times does not mean that it has been confirmed.
In a crisis like this one, we can see that it takes the concerted effort of everyone, from governments, businesses, non-profit organizations, and individual citizens, to help those in need. In the words of Rosa Parks, American civil rights activist, "It takes more than one person to bring about peace—it takes all of us."