These companies have not left Russia. Behind their decisions to stay.

Since Moscow’s invasion of Ukraine on February 24, American companies have been expected to leave Russia in a hurry. Those who remained were denounced as unpatriotic. But interviews with many companies reveal that the decision to stay or leave can be more complicated than it seems.

A flashpoint in this discussion was a decision by the Chief Executive Leadership Institute at the Yale School of Management to publicly rank companies based on their progress in severing ties with Russia. At the top of the list, which was produced by Yale professor Jeffrey Sonnenfeld, are companies that have made a “clean break”, while at the bottom of the list are those that are “digging in”. The list has been taken at face value and used by journalists and columnists to condemn the companies that are left behind. A Washington Post columnist went so far as to say that the products or services of companies staying in Russia should be boycotted.

According to the Yale Institute, a company must meet certain criteria to be placed in category 5, or on the “dig” list. They must have significant operations in Russia, have taken no steps to leave Russia beyond what government sanctions need, have not indicated that they will stop investing in Russia and have not issued a press release or publicly disclosed the steps they have taken to leave the country. These companies are therefore supposed to try to maintain their operations in Russia.

Steven Tian, ​​director of research for the Chief Executive Leadership Institute at the Yale School of Management and co-author of the candidate list with Sonnenfeld, decides which company deserves an upgrade and when. “We update constantly but never instantly based on self-reports,” Sonnenfeld said, noting that the list isn’t exhaustive.

Of the necessary steps, public disclosure is particularly important. Based in Pittsburgh


(symbol: PPG), a supplier of paints, coatings and specialty materials, is an example of a company that has reduced its activities in Russia since the start of the war, while continuing to sell a minimum quantity of essential products. It was only removed from the “dig into” category. after issuing a statement on Wednesday.

Without public disclosure, a company will remain in category 5. This is the case with

IPG Photonics

(IPGP), a manufacturer of fiber lasers. The company continues to operate in Russia, but said Barrons Wednesday that it had closed some existing projects. While IPG has shared the update with Yale, Sonnenfeld is hoping for an official public statement from the company. Earlier this month, the company announced that it has suspended new capital investments in Russia. IPG has nearly 2,000 employees located in Russia.

Industrial technology conglomerate


(FTV) said its operations in Russia were an “intangible” part of its business, with sales accounting for less than 1% of total revenue. A company spokesperson said Fortive also suspended all business operations in Russia starting Tuesday. The exception is a small part of its medical activity which responds to humanitarian needs in the region. Fortive has also made no public disclosures about its operations in Russia and remains in Category 5.

Other companies, like web security provider


(NET), remain in Category 5 on Sonnenfeld’s list, but the company’s reasons for being in Russia are nuanced. Cloudflare provides network security and zero-trust services, which help bring content closer to internet users, defend against cyberattacks, and provide individual users with secure and private access to the internet.

Asked about its specific operations, the company mentioned Barrons for a blog posted earlier this month, who said he was staying to help protect Ukraine and its customers from cyberattacks and that cutting services in Russia would reduce access to information.

Cloudflare clarified this week that it has never had offices or employees in Russia and has taken steps to prevent the company from making payments for things like taxes or fees to the government. Russian. He stated in the blog post that he had terminated services to Russian government-affiliated organizations and terminated all clients related to Russian financial institutions, Russian influence campaigns and Russia-affiliated governments from Donetsk and Luhansk.

“Cloudflare is different,” said Wells Fargo’s Andrew Nowinski. “It’s very intentional, and the reason they’re still operating in Russia is because they provide open internet access.”

international pope

r (IP), a US pulp and paper company, is on the list of companies to tap because of its 50% stake in Ilim Group, Russia’s largest forest products company. The Memphis-based company said it does not operate Ilim or have any Russian-based employees, but the investment was large enough to be immediately disposed of, according to Tian.

International Paper also recently announcement its intention to explore a possible sale of Ilim, but the company will not “request suspension of operations or initiate liquidation or bankruptcy proceedings regarding its investment”. BMO analyst Mark Wilde sees the possible sale as an effort to prevent the nationalization of Ilim by the Russian government.


(GEF), a paper and packaging company that earned 3% of its 2021 operating profit from the nine factories it operates in Russia, said it continues to assess the situation but is operating currently in the region as a way to safeguard the well-being of his “540 Russian colleagues, many of whom are long-serving”. The company said Barrons it froze all new investment in Russia.

That said, Sonnenfeld doesn’t buy Greif’s reasoning. “Employees [in one company] are no more in danger than other employees,” he said, pointing to companies that left Russia and their employees.

Greif, in its latest earnings call, said its Russia business primarily sources raw materials locally and serves local customers.

Ball Corp.

(BLL), a supplier of metal packaging, is included in the “dig” section of the list. Chief Financial Officer Scott Charles Morrison explained in an analyst call with BofA in early March that he continued to operate in Russia because “we have 1,000 employees there and we want to make sure they are safe and taken care of. in charge”. Three of Ball’s 22 factories in Europe are in Russia and it serves large global customers in the country.

The company, which has been in Russia for nearly 30 years, said its Russian operations are fairly self-sustaining and everything is manageable in the short term. Although not exactly as acute as the current war between Russia and Ukraine, “there have been other cases in the past and we have managed to get away with it,” Morrison said.

The company did not respond to multiple requests for comment from Barrons nor the investors page on Ball’s website provide an update on its operations in Russia.


(MTW), a maker of crawler cranes, also falls into Category 5. Manitowoc’s latest earnings report does not break down revenue by region, but at a Credit Suisse conference in December, CEO Aaron Ravenscroft said the company “set record sales for internal records.” in Russia for the past two years. Just days before Russia invaded Ukraine, Ravenscroft said on the company’s fourth-quarter earnings call that business continued to remain robust in Russia, even with all the uncertainty. His investors and news page does not provide updates. Manitowoc also did not respond to questions from Barrons.

Write to Karishma Vanjani at [email protected] and Logan Moore at [email protected]

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