The Russian attack on Ukraine has far-reaching implications for trade and business. Johan Sjöberg, defence and security policy expert, advises companies to get a good overall picture of their own vulnerabilities.
Russia’s invasion of Ukraine has plunged Europe and Sweden into a new security situation, one that is more serious than we have seen in decades. The sharp deterioration in the external situation could also have long-term consequences for trade and industry.
Johan Sjöberg, defence and security policy advisor at the Confederation of Swedish Enterprise, believes that it is of considerable importance for companies with operations in Russia, Belarus and Ukraine – and also for the business community in general - to have a good picture of their risks and vulnerabilities.
“The single most important immediate action for now is to save lives and to keep employees safe,” he says.
The 400 Swedish companies operating in Russia are being directly affected in a number of ways, but Sweden has only limited trade with Russia, and as a result, direct import dependence is also limited, according to Sjöberg.
“However, some sectors may be affected by the sanctions as well as Russian countermeasures. There are Swedish companies in the areas of agriculture and industry that are dependent on metals, minerals and chemicals. Agricultural feed is one example of where Sweden imports from Ukraine and Belarus.
“However, the biggest impact will be indirect, as a consequence of the ban on oil and gas imports to the rest of Europe, particularly Germany. The electricity market, which is already facing severe pressure, will be even more exposed, resulting in even higher electricity prices, especially for southern Sweden,” says Sjöberg.
What can Swedish companies do to protect themselves in these circumstances?
“They can look at their supply chains - not just the closest suppliers - but rather examine the situation at all levels. Companies may need to ask themselves: where do the components we use in our production originate?
Sjöberg says it’s important to get an overall picture of your own vulnerabilities, as this is not only about Russia, Ukraine or Belarus. If you are dependent on goods and services from other European countries that are at risk of countermeasures, you need to look at your own situation.
“As a business, you should review those contracts with a direct or indirect link to Russia and ensure that robust clauses are included in any new contracts. You should also ensure that you have alternative suppliers to turn to in the future.”
For those companies that are able to do so, establishing a stock buffer may be a solution to dealing with disruptions in supply chains.
Sjöberg also points out that companies involved in strategic sectors in Russia and Belarus, such as energy, banking, mining and transport, should put in place contingency plans if they have not already done so.
“This involves screening product portfolios for US or European components that could be subject to sanctions and/or Russian countermeasures.”
“Finally, if this has not already happened, it is high time to review and strengthen cybersecurity and security protection.”
Finally, if this has not already happened, it is high time to review and strengthen cybersecurity and security protection, says Sjöberg, who believes it cannot be ruled out that the trend towards more cyberattacks will continue.
“We are in the midst of the most serious crisis in Europe for decades, and we have to be prepared for the fact that it could affect us in different ways.”
Even when it comes to misinformation, Sweden needs to be prepared for the fact that this may increase.
“Unfortunately, not everyone is properly prepared. But it is not just businesses that need to be prepared, it is society as a whole. It is important for all of us to be discerning of our sources, and to question and review information and to use secure sources,” says Sjöberg.