As the crisis in Ukraine escalates, boardrooms and senior management teams worldwide are now likely talking about the problems of doing business in conflict zones. These regions test the boundaries of risk tolerance.
Any multinational corporation involved in and around Ukraine and Russia must be feeling the impact. Companies such as Italian group Eni and France’s EDF, which signed an offshore oil and gas production-sharing agreement with Ukraine in November, are likely to be monitoring developments. So, too, are Chevron and Royal Dutch Shell, which signed shale gas deals with Ukraine.
Many financial institutions also have exposure. Consider UniCredit, one of Ukraine’s top 10 lenders. International companies involved with Russian finances include Austria’s Raiffeisen, France’s Société Générale, and Citigroup, Morgan Stanley, and Goldman Sachs.
The ripples extend from companies invested in companies in the region to those that do business with them. Ukraine is a key transit route for energy supplies from Russia to Western Europe, so this instability could domino into Europe.
What are these companies thinking about when doing a risk assessment? They analyze the security of their staff on the ground and of their corporate assets. They consider consumer behavior, both in the embattled region and in response to the actions they take there, as well as the behavior of other businesses.