In brief

In brief

  • The war in Ukraine has unearthed new level of economic uncertainty, as both Russia and Ukraine are important global suppliers.
  • Finance and risk leaders are uniquely suited to bring vital insights and analysis to the table in times like these.
  • Their new priorities are: strengthening scenario planning, investigating new and expected risks, cutting costs and planning for divestment if need be.
  • With renewed focus in these areas, it’s still possible to stay on track for growth in the midst of uncertainty.

Russia’s invasion of Ukraine has had dire impacts, sparking a humanitarian crisis and the drastic upheaval of day-to-day life.

The economic impact is rippling across the globe, including from sanctions and disrupted physical supply chains. As a finance and risk leader, you play a critical role in helping your business navigate the fray.

You know better than most how macroeconomic trends impact business. You also have a line of sight into data and reporting across the enterprise. These insights can help your leadership team devise a data-driven, strategic response to crises.

Russia and Ukraine are vital world suppliers

Both Russia and Ukraine are important suppliers of commodities and raw materials, many of which have seen sharp price increases since the war began.1 They’re both significant exporters of agricultural products that are critical for food and beverage companies.2


of wheat


of barley


of sunflower seed oil


of corn

Ukraine is a key source of raw materials for the semiconductor industry, with about half of the world’s neon gas supply and 40% of its krypton gas supply.3 Semiconductor chips are critical inputs into numerous products and services, including household appliances, smartphones, laptops, printers, gaming consoles, PCs, automobiles, airplanes, and medical devices, among others.4

Russia is an energy powerhouse that ranks as the world’s third largest oil producer and top gas exporter.5 Oil and gas prices have skyrocketed due to concerns about Russian supply. While they’ve dipped since their peak in March 2022, they’re still high compared to historical levels.6

What this means for profitability

The impact on profitability will vary across industries and markets. Naturally, it depends on the importance of energy, raw materials and agricultural commodities to cost structure.

Sectors like automotive, industrials and food could take a significant hit, particularly in Europe, where reliance on Russian oil and gas is highest. The pressure on prices and wages from these supply shocks will have ripple effects across other industries globally.7


The current shock has drawn comparisons with the stagflationary shocks of the 1970s.8 However, the impact of oil price surges has become less severe over time and consensus estimates don’t see inflation reaching double-digit levels in the next year in the United Kingdom, France and Germany (Figure 1).

Figure 1: Energy price shocks and inflation in Europe

Energy price and Inflation in Europe

Note: Stagflation refers to the combination of sluggish growth twinned with high inflation. We consider the average of the UK, Germany and France. E = expected. PP = percentage point
Source: Accenture Research analysis of OECD statistics

Consumer confidence in Europe has dropped, reaching its lowest level since April 2020 in April.9 In the United States, consumer sentiment was already on a downward path and hit its lowest level since August 2011 in early May.10 The erosion of consumer confidence is of particular concern for consumer goods and retail, as it may decrease spending.


The conflict in Ukraine is also likely to drag global gross domestic product (GDP) growth:

  • The Organisation for Economic Co-operation and Development (OECD) estimates global economic growth to be more than one percentage point lower this year than projected before the conflict.11
  • The United Nations Conference on Trade and Development (UNCTAD) has downgraded its global economic growth projection for 2022 by one percentage point.12

The question of recession

The consensus among international institutions and investment banks is that we’ll avoid a recession in 2022.13 However, long-term headwinds are mounting. Monetary policy is expected to tighten aggressively in the US. This has some analysts pointing to the risk of a recession next year.14

Against this backdrop of uncertainty, chief financial officers (CFOs) and chief risk officers (CROs) should assess vulnerabilities and cost reduction while pivoting to new sources of growth.

Four areas of focus

In unpredictable situations, focus is essential. While each organization has its own priorities, we recommend paying attention to these areas in the short term:

  1. Expand and accelerate scenario planning.
  2. Evaluate and mitigate operational risks.
  3. Put effective cost-control measures in place.
  4. Assess and implement divestment decisions.

1. Scenario planning

Navigating uncertainty without data is like navigating a storm without radar. Insights help you to act with speed and agility.

Work with stakeholders to build a rapid scenario modelling capability. The shorthand:

  1. Create a cross-functional team to help ensure your models include relevant internal and external factors.
  2. Use intelligent automation and machine learning to speed up the planning and decision cycle.
  3. Make sure your scenarios span the entire enterprise, bringing customer demand, financials, workforce planning and supply planning into a single model.

Areas to model will vary by industry and market but may include:

  • Operational impacts, such as closing operations in affected areas
  • Changes in customer demand due to higher prices or lower consumer confidence
  • Evolution of energy, raw materials and other input prices
  • Supply chain implications
  • Workforce planning, including talent shortages and decisions to work remotely or in-person
Remember: Good scenario planning isn’t a one-and-done exercise. It’s ongoing and iterative.

Your goal is to run a series of scenarios that continually reflect changing circumstances and assumptions.

  • What are the biggest areas of uncertainty? Potential threats and opportunities?
  • Are your leaders aligned on scenarios and parameters to model?
  • How quickly can you deploy a multidisciplinary team with the skills and experience to do this? Will the team be able to address enterprise-wide modeling needs at pace with changing business variables?
  • Are your disparate planning systems—supply chain, sales, finance, workforce, etc.—able to “talk to each other” and share data uniformly and consistently?
  • Are you modelling scenarios that touch your tier-two and tier-three suppliers in addition to tier one?

2. Operational risk

The crisis in Ukraine affects a company’s risk profile along five major dimensions. As an integral part of decision-making, screening and strategy planning, the CRO and their team should work with finance to review exposure across all of them.

Business continuity risk

Companies with operations or IT in Russia or Ukraine are exposed to possible direct or indirect financial losses due to physical damage, logistics challenges, expropriation or an assets freeze.15

Even if you don’t have direct operations in those areas, you may have portfolio-level business interests with exposure to the conflict. If so, review and update your business continuity plans with scenarios that account for a range of potential circumstances across your value chain.

Cyber risk

Instability is a convenient cover for both traditional and novel attacks. Emerging threats could affect companies directly or indirectly, such as in the case of an attack on critical national infrastructure.

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Hackers are increasingly fueled by ideology, rather than traditional financial motives, which makes it that much harder to predict targets.16

Consider setting up controls for new threats based on analysis of cyber intelligence.

Third-party risk

Suppliers based in conflict territory, or those that have business interests there, pose a risk to things like:

  • contracts
  • delivery timeframes
  • loss of services
  • default
  • cybersecurity and more

Think about how you can adapt to partner disruption. Have a list of alternative suppliers at the ready. Remember: Third-party cybersecurity gaps may increase your exposure. Assess the risk they represent and prepare a response plan to third-party incidents.

Financial crime risk

Sanctions and trade restrictions expose companies to compliance risks. New circumvention attempts and behaviors might emerge, posing additional threats. While this type of risk is particularly relevant to financial institutions, other industries should take heed. Review and strengthen your screening rules to make sure they’re compliant.

Environmental, social and governance (ESG) risk

In some industries, high energy prices and security concerns could lead to a short-term slowdown in decarbonization, including in fossil fuels phase-out. On the other hand, they could encourage policy makers to hasten the transition to cleaner energy sources like renewables.17

These dynamics may affect your short-term response, as well as your long-term sustainability agenda. Create a communications plan to keep investors and stakeholders up to date, should your organization’s ESG commitments change as the situation evolves.

View All
  • Have you reviewed your stress-testing approach and adapted it to the evolving overall risk profile?
  • Have you updated your business continuity plans? This includes designing ad hoc scenarios, defining trigger events and detailing what steps to take when.
  • Have you built controls for new cyber threats based on analysis of cyber intelligence?
  • Have you strategized around the loss of suppliers? Including those within, downstream of or otherwise related to conflict areas? Have you identified alternative suppliers outside the affected regions?
  • Have you set up a team to ensure compliance with new sanctions and plan for additional restrictions?
  • If you’re revising sustainability targets, have you created a communication plan to share with the market?

3. Cost reduction

If you have major operations in Russia and Ukraine, cutting costs could be a matter of survival.

Scan your value chain

The crisis primarily affects business outlook through inflationary pressures. As such, keep a close eye on cost structure. Consider both direct exposure to higher energy and raw materials costs as well as their indirect exposure to inflation along the value chain.

Take inventory of general costs

Quickly cutting general costs is a playbook move in a crisis, and this situation is no exception.

Items for discussion:

  • reducing capacity
  • reducing, deferring or spreading discretionary expenditure over a longer period
  • smarter procurement
  • renting rather than owning assets
  • looking for outsourcing opportunities

Keep in mind, the broader goal is to reset your cost baseline for the emerging new reality.

Usually, sanctions are imposed faster than they’re removed. As a result, cross-border trade may continue to be costly. The crisis has also recentered focus around fossil fuels, accelerating the trend toward renewable energy. Talent was scarce before the crisis and it is likely to remain so after. For this reason, it’s important for cost-cutting programs to allow for the support of strategic assets.

  • How do you plan to deal with unforeseen cost spikes? For example, are costs for direct materials locked into an index to limit increases as inflation rises?
  • Do you have forensic visibility into all costs?
  • Have you built controls for new cyber threats based on analysis of cyber intelligence?
  • How can you make your cost base more flexible to increase variable costs and minimize fixed costs? Can you stop, defer or spread expenditure without impacting operations?
  • Are you using all opportunities for tax exemptions and government subsidies?
  • Which projects will need replanning or unwinding? What are the financial, legal and reporting effects of doing so?
  • Can you split or pivot any shared service centers in the region? Can you expand how you use your outsourcing partners?

4. Divestment decisions

Many businesses have already made the decision regarding whether to suspend or discontinue operations in Russia. Recently, some companies that initially suspended operations have decided to permanently leave the country.18


The approximate number of global companies that have announced full or partial withdrawal from Russia.18

To stay or go?

How you make and carry out these decisions may vary from business to business. The complexity, size and nature of your financial commitment in the market are all important factors. Companies in asset-light sectors may find it easier than those with challenges such as:

  • Running large inventories
  • Having a physical presence with stores and plants
  • Operating in franchises or in partnership with local state-owned enterprises

For them, the path from decision to exit is long and includes the risk of asset appropriation, among others. Given geopolitical uncertainty, CFOs of asset-intensive companies might consider discontinuing operations while trying to hold onto their assets, waiting for better times ahead.

Common issues to consider

  1. People: Figuring out how to support your people in Russia in the case of divestment is crucial. Pay special attention to their safety, well-being and employment needs.
  2. Legal: Work with your counsel to evaluate proposed transactions against the sanctions and counter-sanctions in place. In light of how quickly things are evolving, consider refreshing these assessments regularly.
  3. Capabilities: Will your withdrawal leave any gaps in your capabilities? If so, consider the adjustments and acquisitions you’ll have to make to fill them.
  • What is your planned timeline for divestment? Should you plan for a comeback if the geopolitical landscape changes?
  • What if you simply can’t divest your brand from Russia?
  • What’s the plan for your people in Russia? Think relocation, separation, severance payment, etc.
  • How will payment work once you identify an asset buyer?
  • How can you fill the gaps left by divestment?

Eye on growth

For now, change may be the only constant. But finance and risk leaders have the ability to bring things into focus for their companies.

Centering the discussion around these four areas—planning, risk, costs and divestment—will help you ground your CEOs and leadership teams with the critical analysis and insights they need right now. In doing so, you’ll all be better positioned to assess vulnerabilities, take action to contain costs and stay on track for growth.


Copyright © 2022 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture. The material in this document reflects information available at the point in time at which this document was prepared as indicated by the date provided on the front page, however the global situation is rapidly evolving and the position may change. This content is provided for general information purposes only, does not take into account the reader’s specific circumstances, and is not intended to be used in place of consultation with our professional advisors. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this document and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. Accenture and its logo are registered trademarks of Accenture.

1 OECD Economic Outlook, Interim Report March 2022: Economic and Social Impacts and Policy Implications of the War in Ukraine, accessed March 31.

2Ukraine War Threatens to Cause a Global Food Crisis”, The New York Times, March 20, 2022, accessed on May 19, 2022

3Low on gas: Ukraine invasion chokes supply of neon needed for chipmaking”,, March 4, 2022, accessed on May 12, 2022

4These 169 industries are being hit by the global chip shortage”, Yahoo Finance, April 25, 2021, accessed on May 16, 2021

5 Energy Fact Sheet: Why does Russian oil and gas matter? IEA, March 21, 2022, accessed on May 1, 2022

6Worried About Oil Prices? These Charts Show What Could Come Next.”, Barron’s, March 21, 2022 accessed April 1

7 Accenture Strategy, “How businesses can survive & thrive through high inflation”, May 11, 2022, accessed on May 12, 2022

8 J. Ha, M. A. Kose, F. Ohnsorge, “Today’s inflation and the Great Inflation of the 1970s: Similarities and Differences", Vox EU, March 30, 2022, accessed April 13.

9 European Commission Business and consumer survey results for April 2022, accessed May 19

10 Marketwatch, U.S. Consumer Sentiment Fell in Early May on Inflation Concerns -- University of Michigan, May 13, 2022, accessed May 19

11 OECD, Economic and Social Impacts and Policy Implications of the War in Ukraine, Accessed on April 8th

12 UNCTAD, Ukraine war cuts global growth prospects by 1%, accessed April 8th

13 Accenture Research analysis based on Morgan Stanley, Barclays, Goldman Sachs, BNP Paribas, Credit Suisse and J.P. Morgan 2022 GDP & Inflation Outlooks. Data as of 21st March 2022

14 “Deutsche Bank is the first big bank to forecast a US recession”, CNN Business, April 5, 2022, accessed on April 8, 2022

15Russia to seize IP and assets of companies leaving the country”, Managing IP, March 16, 2022, accessed on May 23, 2022

16 “Global Incident Report: Threat Actors Divide Along Ideological Lines over the Russia-Ukraine Conflict on Underground Forums”, Accenture, February 28, 2022, accessed on April 13.

17Ukraine war prompts European reappraisal of its energy supplies”, The Guardian, March 4, accessed on April 13

18McDonald’s are leaving Russia altogether”, CNN Business, May 17, 2022, accessed on May 18, 2022

18Almost 1,000 Companies Have Curtailed Operations in Russia—But Some Remain,” Yale School of Management, accessed May 23, 2022

Jason Dess

Senior Managing Director – Strategy & Consulting, CFO & Enterprise Value Global Lead

Bertrand Eding

Managing Director – CFO & Enterprise Value

Aneel Delawalla

Managing Director – Accenture Strategy, CFO & Enterprise Value

Michela Coppola

Senior Manager – Accenture Research, CFO & Enterprise Value Research Lead


The war in Ukraine
How businesses can survive & thrive through high inflation
In a world of risk, pace comes from preparation

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