The Russian invasion of Ukraine has dominated the news and business agenda, with companies and boardrooms having to pivot at pace to discuss the direct and indirect impact on employees, trading, supply chains and reputations. We’ve reflected on some of the themes we’ve seen over the last few weeks to help inform thinking around the challenges that the conflict has posed for companies, including:
Since the beginning of Russia’s invasion of Ukraine, over half of the stories in the business pages have been about the impact on companies, international trade and the global economy.
Similar to what we saw two years ago when the COVID-19 pandemic first hit in March 2020, this is the biggest refocusing of resources on the news desks and reallocation of space in the papers since “lockdown” entered the lexicon. This, combined with the focus from the media on the cost of living crisis, has squeezed the coverage of corporate reporting during results season to a minimum. Last Monday, every single story in the Daily Mail City & Finance section was linked to Russia and Ukraine.
Pauline Guenot, Harry Clarke and Pete Lambie
Russia’s invasion of Ukraine began towards the end of February, when most companies were preparing to announce results. This meant that the conflict coincided with a point in time at which the majority of PLCs are obliged to be making announcements, posing both a reputational challenge and a significant post balance sheet event for companies with December year ends.
Companies want to know, “Do we need to mention Ukraine within our results statement?” and if so, “How do we do it?”.
To inform these decisions, we sampled 107 results statements that have been issued since the invasion began, finding a clear split in approaches – 55 (51% of announcements) referenced the conflict. Of these, only 20 companies had direct exposure to the region.
Where companies chose to refer to Russia/Ukraine in results statements:
RNS’ clarifying exposure
Several companies have issued standalone announcements to the LSE to clarify their position and/or exposure to the conflict.
The majority of these announcements have used notably emotive language to condemn the invasion:
For those continuing to operate in Russia and Ukraine, the level of condemnation of the Russian invasion varies. Petropavlovsk and Anglo Asian Mining only focus on identifying the risks and financial impacts, with Petropavlovsk referring to the conflict with neutral terms such as ‘events in Ukraine’ and investment trusts holding securities in Russian companies shared their thoughts with the ‘victims of the humanitarian crisis’.
For those making standalone announcements about operations in Russia and Ukraine, we identified four of their priorities:
Antonia Green, Crisis and Risk Specialist
As with any conflict, some are choosing to pause their communications activity while others are pivoting to talk about how they are responding to the situation. Communications strategies will entirely depend on the nature of your business, but there are some key questions we urge clients to consider before taking a stance on an issue (or deciding not to):
Two weeks into the crisis, companies can still expect to be questioned by the media about their dealings with Russia and how the Ukraine conflict is impacting them. If I were a reporter put in front of a company and given free rein to ask questions, here are the major themes I would look to cover. As for media calls after results and trading updates, expect the normal “how is business/ sales/ profits” questions to go out of the window rapidly as Ukraine remains the top story and journalists have been tasked by news desks to find business angles on it.
1. What is your exposure to the conflict in Ukraine? How is it impacting your business?
2. What operations do you have in Russia/Ukraine?
3. What are you doing to protect or safeguard staff in the region?
4. How much/what percentage of your revenues are to Russia/Ukraine?
5. Are you dependent on Russia for supplies/ components or business critical operations? Will you be making long-term changes to your supply chains as a consequence?
6. Are you pulling out of Russia, or closing/ pausing operations there?
7. Will you continue to do business with Russia or Russian companies?
8. Do you have any dealings with those subject to individual sanctions? How will this affect your company?
9. How are sanctions affecting your business operations? Are there any knock-on impacts from direct sanctions on Russia?
10. What pressures have you come under from UK/ Western governments/ investors/ customers/ the public/ media to halt dealings with Russia? What form did this take?
We have already gone through several phases of the news cycle, which began with companies’ exposure to and operations in the region, and moved on through the impact of sanctions and the role of advisers and Board members to UK listed Russian corporates.
What we’re beginning to see now is a rollout of the business desk’s pandemic playbook – with the story moving on to “which companies are going to benefit?” (the new breed of “Covid winners” stories), with a focus on defence companies, and “what are companies doing to help?” (as we saw with support for key workers and schools during the pandemic) – this was last weekend’s Sunday Times splash, with a consortium of UK companies lobbying to fast-track employment for Ukrainian refugees.
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