McDonald's has joined a growing list of multinational companies cutting ties with Russia as financial and reputational risks rise in the wake of the invasion of Ukraine.
More than 250 companies across all major sectors of the economy, including the big four accounting firms, big tech, financial operators, automakers, media, consumer goods, sports federations and more, have announced either partial suspension or complete withdrawal from Russia since Vladimir Putin's invasion of Ukraine began on 24 February, according to a report by the Yale School of Management.
McDonald's said it was temporarily closing all of its 850 restaurants in Russia but would continue paying its 62,000 employees there. A spokesperson for the burger giant said: “Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
Global giants including Apple, Samsung, Mercedes Benz, Rolls Royce, American Express, Mastercard, Alphabet, Meta, Twitter, Netflix, Goldman Sachs and others expressed deep concern over Russia's invasion of Ukraine and showed their support to the Ukrainian people by either restricting business and access to products and services or entirely closing operations in Russia.
Australian companies sever Russia ties
Australian fashion retailer Zimmermann, classic boots brands Blundstone and RM Williams are also among the companies that have decided to halt operations in Russia.
While Russia accounts for a small portion of Australia’s fashion sales exports, this move by Aussie fashion brands comes in the wake of the world’s biggest fashion companies exiting Russia amid the escalating situation in Ukraine.
Why global giants are exiting?
Financial penalties against Russia have dealt a huge blow to the country’s economy and it is now witnessing a mass exodus of big global brands.
The war has led to the closure of Russian airspace and transport links, international sanctions, financial restrictions on SWIFT (The Society for Worldwide Interbank Financial Telecommunication) and sanctions on the Central Bank of Russia.
It has become increasingly harder for many companies to supply parts, make payments and deliver goods to and from Russia.
Consumer sentiment and the potential retaliation against any company thought to be supporting Vladimir Putin's government has also fuelled this mass exodus.
What this means for global economy
Three decades of investment by foreign businesses in Russia after the Soviet Union broke apart in 1991 is being reversed with this retreat of companies from the country.
Oil and Gas companies with multi-billion-dollar projects underway will be the hardest hit, while payment companies, retailers and entertainment brands might be less impacted in the short-term due to limited revenue exposure and could bounce back more easily.
Greater concerns of environmental, social and corporate governance are set to rise, however, experts in international business and management are speculating that the most critical impact of this forced rejig could be the wider period of de-globalisation in business relationships and economies, according to CNBC.
While the list of companies opting to sever ties with Russia might grow exponentially in the near future, here's a list of more than 250 companies that have already closed operations or placed curbs on business dealings in the country.
(This list is continually being refreshed by Yale in the current volatile environment. The Australian companies mentioned in this article have not yet been updated.)