Regarding Russia, UK companies are going to need thought-out positions
Russia is “uninvestable for the foreseeable future”, said Stephen Bird, chief executive of Abrdn, a statement of the obvious for a fund management group. If BP and Shell can ditch long-held investments and partnerships, Abrdn can certainly wave goodbye to the 0.5% of its assets that it currently holds in Russia. The money is the customers’ anyway.
The moral clarity around the moves by BP and Shell owed much, of course, to the fact that the duo were in bed in state-backed energy companies that are arms of the Kremlin – Rosneft and Gazprom respectively.
The position of Centrica, owner of British Gas, now commendably trying to extricate itself “as a matter of urgency” from gas supply agreements with Gazprom, is different. The company wasn’t compelled to do anything, but is choosing to do so.
An open question, then, is how far the disinvestment principle should be pushed.
Note that Kwasi Kwarteng, the business secretary, did not distinguish between trade with Russian state-backed firms and general trade in Russia when he said on Twitter that “there is now a strong moral imperative on British companies to isolate Russia”. On that basis, he applauded Jaguar Land Rover as it followed Swedish group Volvo in halting vehicle deliveries to Russia.
To pick on spirits group Diageo, its last annual report trumpeted a sales increase in eastern Europe “mainly driven by strong growth in Russia”.
Should Diageo be in the business today of selling premium bottles of Johnnie Walker whisky to wealthy Russian consumers, and paying local duties to the Russian government in the process? Well, like JLR, it has paused exports, but the approach does not yet sound like a fixed policy.
To be clear, non-supply of consumer inessentials is a long way down the
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