Pulling out of Russia is not only morally right, but also profitable for business.

Yale School of Management research proves that companies leaving Russia are generously rewarded by markets while those remaining suffer financial and reputation risks.

According to researchers from the Yale School of Management (USA), public companies that left Russia after its invasion of Ukraine are rewarded with huge profits from the stock market. And those who remain, on the contrary, have both financial and reputation risks. It holds true across regions, sectors, and company sizes.

The shareholder wealth created through equity gains has already far surpassed the cost of one-time impairments for companies that have written down the value of their Russian assets and gave up revenue from the Russian market. This is stated in a report1 by Yale University professor Jeffrey Sonnenfeld and his research team. The team monitored more than 1,200 companies doing business in Russia.

For example, 6 large companies (Heineken, Shell, Exxon, Carlsberg, AB InBev, and Societe Generale) that incurred asset write-downs of over $14 billion in Russia but have generated nearly $39 billion in subsequent equity gains. Each of these companies had positive stock performance after the announcements of their exits from Russia and the values of their asset write-downs.

The analysis of global capital flows demonstrates the importance investors attribute to the decision to withdraw from Russia. And that investors believe the global reputational risk incurred by remaining in Russia at a time when nearly 1,000 major global corporations have exited far outweigh the costs of leaving.

Equity markets are not the only asset class where financial markets have clearly been 

rewarding companies for leaving Russia while punishing those that remain. The same 

trend is evident across credit markets – specifically the pricing of corporate debt – 

and related derivative products.

There’s also the risk to companies that have not exited Russia operations of being 

boycotted by younger people, who as both prospective customers and employees are 

carefully attuned to corporate values and are quick to take action when they are 

disappointed

Pull out of Russia, feel good, make profits!