How does a professor become an enemy of the Russian state? How does a team of Yale students become a premier economic intelligence research engine? How does that professor and his small but mighty team galvanize a corporate exodus, lacerate Putin’s purse, and shatter the Kremlin’s veneer of strength?
The answer unfolds in the corner of the Yale School of Management (SOM), where sunlight beams through the glass walls into the office of Professor Jeffrey A. Sonnenfeld. His office is 4,800 miles away from the battlefield in Ukraine, but Sonnenfeld is at the front line of the war. Sonnenfeld, who is the SOM’s Senior Associate Dean for Leadership Studies, Lester Crown Professor in the Practice of Management, and founder and president of the Chief Executive Leadership Institute, wields a portfolio of strategic weapons of his own creation.
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Sonnenfeld’s first strategic weapon is the “Russia list”: a public record of companies’ engagement with Russia that sparked a mass corporate exodus. The Russia list leveraged Sonnenfeld’s background and expertise. In 1981, Sonnenfeld advocated for corporate social responsiveness and impact with his book Corporate Views of the Public Interest. Then he began encouraging corporations to put into practice the idea that “doing good isn’t antithetical to doing well.” On issues ranging from voting rights to cancer control and eradication, Sonnenfeld has pushed companies to realize that society is a significant stakeholder in their businesses and they should take actions that align with their values.
In the wake of Russia’s invasion, Sonnenfeld observed that twelve companies — including several companies whose CEOs Sonnenfeld knows well — had taken rapid and unprecedented action to withdraw from Russia. Meanwhile, other companies made empty announcements about their support for Ukraine and were celebrated to the same degree as those who had made material sacrifices and permanently closed stores and factories in Russia. “Many causes [begin with] a core of really noble players working hard, assiduously, with no self-interest,” Sonnenfeld explained. “But it often gets flooded by people who hijack a good cause and start to use it for their own fundraising, careerist ambitions, and wind up ruining — or certainly diluting — the power of the movement.” Sonnenfeld wanted to separate the heroes from the imposters, applaud the first movers, and encourage other companies to act.
In late February 2022, Steven Tian — Sonnenfeld’s right-hand man, Research Director at the Chief Executive Leadership Institute, Yale alum, and former Wall Street analyst — began tracking companies’ withdrawal announcements and compiling a public record of companies’ engagement with Russia. Day by day, more companies made the decision to withdraw. In order to track the barrage of announcements, Sonnenfeld and Tian needed to expand their team. The pair initially recruited Sonnenfeld’s teaching assistants from his class at the SOM, then recruited business school students and volunteers from Yale’s Executive MBA program. The team of volunteers researched companies that made withdrawal announcements and confirmed that they were actively ending their operations in Russia. With an expanded team, the list grew rapidly from a few dozen companies to over 100 within a month.
Then, the list went viral: the website received upwards of 60 million hits. “We started to see a stampede of companies exiting Russia,” Sonnenfeld said. Consumers, employees, and shareholders cared about companies’ moral stances and paid attention to their level of engagement with Russia. “As the number of people and policymakers across the world following [the list] grew, companies realized that this would have an impact on their reputational capital,” said Yash Bhansali ’23, who has contributed to Sonnenfeld’s research.
After reading about the list, many Yale students — both those with a strong connection to the conflict and region and those who were deeply moved by the humanitarian crisis — approached Sonnenfeld to get involved. Existing team members recruited friends with regional expertise and language skills. Members of the research team spoke Russian, Polish, German, Uzbek, French, Spanish, Italian, Mandarin, Japanese, Urdu, and Sanskrit. “We had a team of 40 researchers reading newspapers in 20 languages to see which companies were withdrawing versus still operating [in Russia],” said Georgia Hirsty MBA ’22.
Hirsty is the CEO of a boutique consulting firm by day and a “defender” of the Russia list by night. When companies claim that their classification on the Russia list is inaccurate and subsequently threaten to sue for defamation, Hirsty responds with evidence and forces them to back down. Other members of Sonnenfeld’s research team have similarly varied backgrounds. Michal Wyrebkowski, a sophomore at the University of Pennsylvania, is a quadrilingual energy scholar whose data collection methods were “inspired by Alexei Navalny and Bellingcat.” Franek Sokolowski ’25 is a Yale student from Warsaw fluent in the Russian, Polish, and Baltic languages. Along with Yale doctoral student Wiktor Babinski, Sokolowski led teams reading local Russian publications and helped direct operatives on the ground in Russia to photograph and video company operations and transactions.
Sonnenfeld encouraged students to take ownership of the project. “Because the situation was unraveling as we were working, anyone who had a new idea would go work on that immediately,” Bhansali explained. Under the guidance of Sonnenfeld and Tian, Steven Zaslavsky MBA ’22, Ryan Vakil ’25, and Bhansali co-authored a paper on the financial incentives for companies to withdraw from Russia. They demonstrated that investors feared the financial, operational, and reputational risks of operating in Russia. As a result, companies that withdrew had higher stock returns than those that did not.
The list expanded to nearly 300 companies. As a result of the list’s publicity, Sonnenfeld received 200 anonymous tips about companies secretly continuing their operations in Russia. Wary that the whistleblowers may have been disgruntled employees, competitors, or self-promoters, research volunteers divided into groups to track down leads and confirm the status of companies’ operations in Russia. Additionally, companies began announcing that they would “curtail future investments” in Russia, so that they could improve their image without taking financial risks. “[These] future investments had never been specified before: we never knew how much, what product lines, what parts of the country. What are you not going to do that you were not going to do before?” Sonnenfeld challenged. Legally obligated to recognize “curtailed future investments” as a form of “disengagement” from Russia, Sonnenfeld expanded the Russia list’s classification scheme. Sonnenfeld’s new five-part “A-F” letter grade scale rewarded companies who withdrew completely with A’s, criticized companies who merely “curtailed future investments” with D’s, and exposed companies who failed to act with F’s.
Corporate exodus also sends a unique signal of condemnation that has the potential to change Russia’s behavior. “I had spent some time with [renowned South African anti-apartheid activist] Bishop Desmond Tutu,” Sonnenfeld explained. “[He] told me that corporate pullouts were [just as critical as] the economic blockade through government sanctions. In fact, just over the weekend, a biographer of President Nelson Mandela told me that the corporate pullout — Mandela thought — was more important than the government sanctions. The idea of individual private sector decisions couldn’t be read as geopolitical spite. In the case of South Africa, the Afrikaaners were feeling that they were just being vilified and somehow victimized by the West, which was envious of their resources. When these individual companies were pulling out of this rich market, they saw this was serious and they in fact were being seen as a rogue nation and pariahs in the global community.”
“[South Africa] was the high-water mark — that was the historic stampede of exits — where there were 200 companies,” Sonnenfeld said. Defying even Sonnenfeld’s expectations, the Russia list grew to over 1,300 companies and catalyzed a monumental corporate exodus. Within months, Russia lost a multitude of companies comprising 40% of its GDP.
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In April 2022, facing escalating economic pressure, Putin believed that he could fracture Western resolve by convincing governments and businesses that their sacrifices were futile. Putin fabricated a narrative — that Russia’s economy was resilient to all forms of external economic pressure — and put the propaganda machine to work. “Journalists were being actively fed and starting to fall victim to Putin’s spin that this had no consequence on his economy, because he was manufacturing false information,” Sonnenfeld said.
There was reason for journalists to have faith in the Russian Federal State Statistics Service (Rosstat), as it had traditionally been a reliable and trustworthy source. However, in the wake of the Russia invasion, Putin’s flock of new political appointees changed Rosstat’s accounting methodologies in a disingenuous way, reduced the frequency of their reporting, and selectively published favorable statistics while concealing unfavorable numbers. Yet, the International Monetary Fund (IMF) used Rosstat’s manufactured data to forecast that the Russian economy would contract by a mere 3.4% in 2022 and rebound in the following year. In both public and academic circles, Putin’s resiliency narrative was gaining false legitimacy.
Sonnenfeld’s gut instinct told him that these statistics and projections were wildly off the mark. More importantly, he understood that companies would restart their operations in Russia if they learned that the Russian economy was resilient to their withdrawals. To respond to Putin’s disinformation campaign, Sonnenfeld realized he needed to develop a second strategic weapon: data and a research paper revealing the true state of the Russian economy.
“We were finding early data to support that, in the first quarter, [Russia’s] industries were slowing up 60-90%, but then that information disappeared. The spigot was turned off from the Rosstat,” Sonnenfeld said. From the Russia list, Sonnenfeld and his team knew that hundreds of companies had withdrawn from Russia, making them skeptical of the IMF’s projections. “To have such a large number of companies leave would be a major impact for any country. And to have a country that is so dependent on Western expertise and investment, that just flies in the face of any rosy economic projection,” explained Andrew Kaiser, a member of Sonnenfeld’s research team and a leading expert on corporate engagement in Russia. While blatantly false, these projections began cracking at the foundation of the corporate exodus Sonnenfeld had galvanized through the Russia list.
Since the official Russian statistics were unreliable, Sonnenfeld challenged the team to piece together data from non-governmental data sources and analyze the Russian economy at a granular level. Kaiser recalled how Sonnenfeld began asking questions to investigate each component of the Russian economy: “Could you look at automotive sales? Could you look at how many countries are still producing and currently running plants in Russia? Could you look at where they could possibly be selling their oil? What is the existing energy capacity if they’re slowing down gas through the European pipelines?”
The research team focused on investigating six topics that together would depict the true state of Russia’s economy: natural gas and oil exports, trade relationships, consumption and production data, business withdrawals and the talent flight, fiscal and monetary policy, and financial markets. “It was like managing an orchestra because there were so many moving parts,” Tian said. Given the high stakes of the research, the team needed to have a high level of certainty in their findings — even when working on a tight timeline. “[The research] impacts the course of the conflict in Ukraine, how the conflict is perceived by the American people, and the data that policymakers have to work with when they are making decisions that have massive impact,” Tian said. “Whenever you are going up against conventional wisdom, you have to make sure your case is ten-times stronger than anyone else’s.”
The team knew that energy would be the centerpiece of their research since oil and gas constitute 45% of Russia’s government budget revenue and thereby help to finance the war in Ukraine. Despite punitive sanctions on Russia’s oil and gas exports to Europe, Putin claimed that he was able to sustain pre-invasion levels of oil and gas revenue by “pivoting to the East” and exporting oil and gas to India and China.
But, in contrast to the United States’ liquified natural gas (LNG) exports, which can be shipped via tankers, Russia’s natural gas typically travels through pipelines. Russia could only “pivot” its gas exports if its pipeline network connected to China and India. From a University of Pennsylvania class on the geopolitics of Russian energy, research team member Michal Wyrebkowski was well-versed in Russia’s natural gas industry. Wyrebkowski translated articles from Russian energy journals to collect data on the routes and capacity of operating pipelines, pipelines under construction, and proposed pipelines. By plotting the pipeline routes on a map, Wyrebkowski realized that the Eastern pipeline network had no connections to the Western grid. “As we connected the dots, we clearly saw the pieces fall in place,” he said. “Russia’s position as an energy exporter was falling apart.”
Short of building expensive and extensive pipeline networks, Russia’s only option to export its gas outside of Europe was to produce LNG. However, LNG currently comprises only 10% of Russian gas exports. Wyrebkowski explained that expanding LNG exports would require expertise and technology from the West, expertise that Russia could no longer access because almost all of Russia’s former Western business partners have withdrawn from the country. Furthermore, Russia would have a difficult time financing any capital expenditures. “Russia was blocked out of many liquid credit markets and investors [did] not want to touch Russian markets,” Bhansali said. The evidence was abundantly clear: Russia could not “pivot” its steel pipelines, nor build expensive and advanced infrastructure overnight, without a magic wand.
Russia also faced obstacles pivoting on oil sales. Robert Hormats, who served as Under Secretary of State for Economic Growth, Energy, and the Environment from 2009-2013, explained that Western sanctions put pressure on the profit margins for Russian oil. While India and China were buying additional Russian oil, Hormats explained that “those countries are smart enough to recognize that there is a buyer’s market and they are getting, for the most part, very substantial discounts for the oil they buy from the Russians.” Compared to Saudi Arabia, Russian oil companies have a high extraction cost, due to their old and inefficient equipment, as well as the geographic constraints to extracting oil in the permafrost-laden Arctic Tundra. The hefty cost of Russian oil production and the reduced market rate further strained an already narrow profit margin. Though Putin’s pivot enabled Russia to generate a similar volume of oil sales, Russian profits dropped substantially.
While one group of researchers was focused on Russia’s unraveling position as an energy exporter, another group was concurrently focused on another key component of Russia’s economy: trade. Stephen Roach, the former chief economist at Morgan Stanley and chair of Morgan Stanley Asia, guided the research team. “What I advised them to do, given their instinct that the Russian statistics may not accurately reflect the true state of the Russian economy, is to triangulate on the Russian economy by using other official data from countries engaged through trade and other kinds of technical assistance to Russia, so that their data can tell the story that Russian statistics may not accurately reflect,” Roach said.
The research team adopted Roach’s triangulation method and extrapolated Russia’s import and export statistics using data from Russia’s trade partners, whose by-country import and export statistics were publicly available. The team found data on the Chinese government website that revealed that Russian exports to China were falling, outside of the energy sector. “If Russia is saying, ‘We are exporting more to China,’ but China’s data isn’t showing that, something has got to give,” Tian said. Although Europe has significantly reduced trade with Russia, China has not filled in the gap. The world has abandoned Russia economically.
Sanctions and corporate withdrawals especially impacted Russia’s domestic production and consumption. The research team brainstormed alternate measures for quantifying this economic impact. They began searching the internet and found high-frequency data from e-commerce stores, revealing a 20% drop in online purchases. Sonnenfeld’s team also aggregated international automobile data from industry and trade group databases. Not only had sales of Russian cars (such as LADA and Skoda) dropped, but production had also decreased by a whopping 80%. According to Sokolowski, this drop in production was a direct consequence of the US embargo on computer chips, which control the dashboard, air conditioning, entertainment system, and vehicle safety features in cars. “Not all sanctions work immediately,” Sokolowski said. “But in key areas — like imports of key technologies like chips — Russia is really battered.”
The invasion of Ukraine has also taken a toll on Russia’s human capital. Russian men with sufficient resources crowded into airports and border crossings to escape Russia and the draft, signifying a potential — but difficult to quantify — talent flight. Wary of the migration data released by Russian news agency RIA Novosti, the research team sought to collect their own data to assess the magnitude of the talent flight and destinations of fleeing Russians. Cellphone tracking data purchased and published by the University of Net Technology and Communications revealed that a mass of cell phones had left Russia and not returned. At least 500,000 Russians had fled to surrounding countries such as Armenia, Georgia, Kazakhstan, and Turkey, gutting the Russian economy of 20% of its ultra-high-net-worth individuals (with net worths of over $30 million) and hundreds of thousands of high-skilled workers.
The research team also used on-the-ground contacts in Central Asia to assess the talent flight. For example, Sonnenfeld spoke with the Uzbek Ambassador, who told him that business at the Tashkent IT Park in Uzbekistan grew by 400% since the invasion of Ukraine. “It’s not due to some Central Asian economic miracle. It’s all Russian talent flight. And we know that because of Professor Sonnenfeld and his network of insiders,” Wyrebkowski said. On top of sanctions and Western business withdrawals, the talent flight has deepened Russia’s economic devastation.
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In less than four months, Sonnenfeld, Tian, and the research team produced a 118-page paper titled “Business Retreats and Sanctions are Crippling the Russian Economy.” Sonnenfeld’s second strategic weapon and a lasso of truth, the paper would dispel Putin’s falsehoods, reveal Russia’s economic weakness, and reinvigorate global support for the sanctions regime and corporate exodus.
The paper’s release made a splash. Sonnenfeld, Tian, and the other co-authors had a call with the IMF, whose optimistic forecast of the Russian economy had been heavily influenced by Rosstat and gave false legitimacy to Putin’s economic resiliency narrative. Following the call, the IMF acknowledged the weakness of their original forecast and the flaws in the Rosstat data they had been citing.
Soon after, Secretary of State Blinken shared their research in a press release. “It generated a tremendous amount of attention. Thousands of people were tweeting it out, including prime ministers, heads of state, CEOs,” Tian explained. Sonnenfeld’s thesis quickly became the dominant view among journalists and the academic community.
Sonnenfeld and his research team have since advised policymakers at the State Department, the Treasury Department, and the White House’s Council of Economic Advisors, as well as the UK Parliament. Ben Harris, Assistant Secretary for Economic Policy at the Treasury Department, explained that Sonnenfeld’s paper helped “crystallize” his view of the Russian economy. Significantly, he added that the published paper was something that Treasury Department officials could “talk about publicly” and “point to as a reliable source.” Subsequently, Bloomberg gained access to internal Kremlin documents, confirming the dire economic situation in Russia.
Within eight months, Sonnenfeld and his team’s paper became the seventh most-cited on SSRN — the Social Science Research Network — out of over 1.2 million research papers, displacing the work of a Nobel Prize-winning economist. Following the paper’s widespread impact, Putin ranked Sonnenfeld #6 on his “enemy” list, higher than Mitch McConnell. Sonnenfeld is proud of this dubious distinction.
Thousands of miles from the frontline, Sonnenfeld and his team’s efforts have helped to erode Russia’s economic strength. As Sonnenfeld had originally hoped, their blows to Putin’s economy are ultimately helping the people of Ukraine and global democracy. “It is this young Yale team that said, ‘No, you are all wrong, the emperor is naked,’” Sonnenfeld said.
Sonnenfeld and his team are far from finished. Still, the war continues to rage on with devastating effects. “We are trying to constantly stay ahead of Putin’s effort to divide and conquer,” Sonnenfeld said. “Putin has had a waiting game where he thought that there wouldn’t be unified support around the world for Ukraine economically and diplomatically. And there has been. That has been one of his biggest miscalculations, other than his miscalculation about his own military might.” Since publishing the paper on the true state of the Russian economy, Sonnenfeld has continued expanding his portfolio of strategic weaponry. This fall, he worked with the Treasury Department to design an oil price cap that balanced their competing objectives to reduce Putin’s profits from oil sales without creating supply shocks from lost production.
Sonnenfeld, Tian, and the research team — which now totals fifty-five people — are working on a “version two” of the paper to incorporate events from the past six months. The update will provide a comprehensive analysis of Russian supply chains, identify gaps in sanctions, and expand on the notion of Russia’s asymmetric interdependence on the West. “We are not only continuing, we are doubling down,” Tian said. “We are in one of the early innings and have many ideas.”