The war in Ukraine sparked a mass exodus of businesses from Russia. Corporations that spent years gaining a foothold in the growing consumer market pulled out nearly overnight, their lucrative operations suddenly looking like liabilities.
But that exodus is also shining a spotlight on what some of those companies were doing in Russia in the first place, and why it took an act of war to make them change their tune.
Here's the deal: On Monday, the New York Times revealed how Nokia has for years provided equipment and services that propped up Russia's vast surveillance system that has been used to spy on dissidents.
- TL;DR: Although Nokia denounced the invasion of Ukraine and said it would halt sales in the country, the company told the Times that it was required to make products that comply with the surveillance system. In other words, this was simply the cost of doing business in Russia. (Nokia didn't immediately respond to CNN Business' request to comment.)
BUSINESS ETHICS 101
No business (or consumer, for that matter) can keep its hands perfectly clean. Vast, interconnected supply chains make it all but impossible to avoid some interaction, directly or indirectly, with corruption, labor exploitation or other unsavory elements of global commerce.
The question, then, is how close you are to the bad behavior, says Jason Brennan, a professor of business ethics at Georgetown University.
"No, one's willing to swim in a pool when there's a dead body in the pool, but you're willing to swim in the ocean...It's sort of about the concentration of death around you," he told me. "Markets are a little bit like that too."
In other words: Nokia might not have made the tech that spied on Russians, but it showed Russian authorities how to plug it in, and that should have been a big red flag for the company's top brass.
Nokia called on governments to set clearer rules about where technology can and can't be sold. This is a common refrain from large companies that struggle to police themselves: They ask governments to step in to protect them from our basest impulses. (See: Zuckerberg, Mark).
BIG PICTURE
This is hardly a new dilemma for multinational corporations. Big Tech, in particular, has struggled to strike a balance between democratic ideals of free speech and privacy and the realities of doing business in authoritarian markets where those rights are absent.
But there's good news for companies like Nokia looking for help reining themselves in: Doing the right thing is good business. It isn't just good for PR — it's good for the bottom line.
Consumers and investors are increasingly aware of their companies' behavior, and corporations have taken note. Look how quickly Disney turned around its response and actions after at first refusing to oppose Florida's so-called Don't Say Gay bill. And the speed of the Russia exodus among Western brands underscores a relatively new era in which investors and customers are demanding brands do more than maximize profits at all costs.
