Unilever Defends Decision to Continue Operating in Russia

Unilever Defends Decision to Continue Operating in Russia

Unilever, the maker of popular brands such as Dove soap and Cornetto ice cream, has faced backlash for its choice to continue operating in Russia more than a year after the country’s invasion of Ukraine. The company argues that exiting Russia is not a straightforward decision due to the potential takeover of its operations by the Russian state if it were to abandon them. The controversy arose after the Moral Rating Agency accused Unilever of facilitating Russia’s invasion and urged the company to take ethical responsibility.

Western Companies Divided on Russia Operations

Since Russia’s illegal invasion of Ukraine, many Western companies, including Apple and Levi’s, have chosen to quit the Russian market for both ethical reasons and due to the difficulties posed by sanctions. However, some firms, like US consumer goods giant Procter & Gamble, have opted to limit their activities in the country. Unilever falls into the latter category, citing the challenges of completely exiting a market in which it has a significant physical presence.

Unilever’s Measures and Moral Rating Agency’s Accusations

Unilever has implemented certain measures in response to the situation. It has ceased exports, imports, and advertising in Russia, and claims to only sell essential products such as everyday food and hygiene items. However, the Moral Rating Agency alleges that Unilever’s production facilities in Russia continue to manufacture and sell most of its original goods in the country. The agency calculates that Unilever contributes approximately £579 million annually to the Russian economy, taking into account various financial factors.

Unilever’s Dilemma and the Russian State’s Potential Takeover

Unilever’s dilemma lies in the fact that if it were to abandon its brands in Russia, they would be appropriated and operated by the Russian state. With around 3,000 employees in Russia, the company has been unable to find a solution that avoids further benefit for the Russian state while safeguarding its people. Unilever emphasizes that it is not attempting to protect or manage its business in Russia but states that exiting is a complex process given the circumstances.

Shell Faces Criticism for Continued Trade in Russian Gas

In a similar vein, Shell has faced criticism for continuing to trade in Russian gas more than a year after pledging to withdraw from the Russian energy market. The company justifies its trades by citing long-term contractual commitments and asserts that they do not violate laws or sanctions.

As Unilever defends its decision to maintain operations in Russia despite the invasion of Ukraine, the company finds itself embroiled in controversy and accusations of facilitating Russia’s actions.