BP, Unilever, and HSBC have failed to properly exit Russia, new report warns

Three FTSE 100 companies – HSBC Holdings, Unilever, and BP – have been named as members of a “dirty dozen” of high-profile multinationals still heavily involved in Russia.

The three UK headquartered companies have failed to properly exit Russia in the wake of Putin’s invasion, according to a new report by the Moral Rating Agency (MRA).

Instead, the British firms have used “loopholes” in the international sanctions regime to continue operating inside the Russian Federation, the MRA report says.

In its report, the MRA rated companies on their withdrawals from Russia, based on the range of activities they have pulled away from and the completeness of those withdrawals.  

The MRA report warns that just 17 of the world’s 122 largest companies have fully exited Russia, as it claims 59 remain “stuck in the middle” while a further 46 are still entirely in.

The report named BP, Unilever, and HSBC Holdings as three of the most egregious offenders, in claiming they have failed to exit Russia, despite condemning its invasion of Ukraine.

City businessman Mark Dixon, who founded the MRA in February, accused an array of multinational firms of failing to properly exit Russia as he claimed top companies “often get credit before they have left.”

Dixon claimed companies that pledged to pull out of Russia in the wake of the invasion have instead continued to work in the country by various means.

He explained that “companies are hiding in shades of grey – doing little but looking like they are doing a lot.”

“Some company announcements are not worth the paper they are written on,” Dixon said. “You read the statement and it sounds like the company is doing something real – but often it is just a promise that the company will be able to tear up.”

The report warns that a plethora of the world’s largest companies, including BP, have pledged to sell their Russian assets but have failed to actually offload them yet.

“If it manages to delay a sale until it is less embarrassing to work with Russia, it can avoid doing anything at all,” Dixon said.

The City of London thinktank’s ‘dirty dozen’ list saw it compile an index of the most-well known companies that have failed to completely pull out.

In explaining its list, the think tank pointed to BP’s continued failure to offload its 19.75 per cent stake in Russia’s state-owned oil company Rosneft.

It also pointed to Unilever’s decision to continue selling products such as ice cream, and HSBC Holdings’ decision to continue serving Russian customers.

The report notes some companies have relied on “carve out” clauses to continue operating in Russia and continue selling essential goods.

The three British companies sit alongside US giants PepsiCo, Goldman Sachs, Johnson & Johnson, Chevron, Procter & Gamble, and General Electric, as members of the MRA’s ‘dirty dozen’.

Chinese e-commerce giant Alibaba, Saudi Arabia’s state-owned oil company Saudi Aramco, and Swiss food and drink company Nestle, make up the remaining members.

An HSBC spokesperson said the bank has “signed an agreement” to sell its Russian business to Expobank JSC.

“We are continuing to work on completion of this transaction which is subject to various regulatory approvals within Russia and once concluded, the HSBC Group will exit its operations in Russia,” the HSBC spokesperson said.

A spokesperson for BP pointed City A.M. to a statement on the company’s website which claims the firm is continuing to “actively pursue the disposal of its shareholding in Rosneft.

Unilver was approached by City A.M. for comment.