Unilever has been added to Ukraine’s National Agency for the Prevention of Corruption (NACP) list of “international sponsors of war” due to its continued presence in Russia.
The NACP alleges that Unilever’s ongoing operations in Russia support the aggressor’s economy and contribute to the continuation of Russia’s war against Ukraine. The agency claims that Unilever’s profits in Russia have doubled since the invasion of Ukraine and that the company paid around $50m in taxes to the Russian Federation last year.
Unilever’s 2022 annual report shows that its Russian business accounted for 1.4% of turnover and 2% of net profit. The company has stated that it has taken actions to reduce its business in Russia, resulting in a decline in volume. However, it acknowledges that turnover has been higher due to inflation and the strength of the Russian currency.
Head of the NACP, Oleksandr Novikov, criticizes Unilever for not living up to its values of human rights and accuses the company of indirectly funding a mercenary criminal group. Novikov calls on Unilever to leave Russia and warns of the historical record of its complicity if it fails to do so.
In response, Unilever refers to its previous statement in which it claims to have ceased all imports, exports, media, advertising spend, and capital flows in and out of Russia since March 2022. The company states that exiting Russia is not straightforward due to its significant physical presence and the potential appropriation of its business and brands by the Russian state.
Unilever argues that the best option at present is to allow the business to continue operating under strict constraints. However, it acknowledges that the situation is being kept under close review and warns of the possibility of discontinuing operations in Russia.
This development follows similar criticism faced by US confectionery giant Mondelez International, which was also added to the NACP’s list of international sponsors of war. Mondelez, the owner of Cadbury and Oreo, announced plans to scale back non-essential activities in Russia and suspend advertising spending after Russia’s invasion of Ukraine.
Unilever and Mondelez’s decisions raise challenging questions about the role of multinational corporations in conflict zones and the ethical trade-offs they must navigate.