Here’s what to know about the wider impacts of Russia’s latest actions in eastern Ukraine:

• Companies should be prepared. Russia’s actions and President Putin’s speech Monday suggest its military advances will not stop in Donetsk and Luhansk. Companies should plan for Russian military action elsewhere in Ukraine and most urgently, inventory their presence there, taking measures to protect their employees and their physical assets. They should also:
  • Review their supply chains in Ukraine and identify short- and medium-term vulnerabilities;
  • Identify what, if any, ties they have to companies and actors in the breakaway areas of Eastern Ukraine to ensure they do not run afoul of U.S. and possible European sanctions; and 
  • Identify their business ties with Russian banks and other financial intermediaries as well as companies and individuals linked to President Putin, as these are likely targets for further U.S. and European sanctions. 

• More uncertainty for the energy sector and beyond. With the remaining steps to complete Nordstream 2 now frozen, its ultimate fate will depend on Putin’s next moves. Given the great importance of Russian gas supplies to Europe, the energy sector will be significantly affected by developments in Ukraine. Europe is already struggling with hikes in energy prices, which will now undoubtedly continue. Russia and Ukraine also supply metals key to some of Europe’s most strategic industries such as aerospace. An increase in prices would hamper Europe’s competitiveness in these sectors. 

• Global food security could suffer immensely. Ukraine is the world’s fifth largest wheat exporter, with many of its most fertile regions in the east. Further military escalation by Russia could disrupt Ukraine’s wheat exports with potentially devastating effects on global food security. Countries like Yemen, Lebanon and Egypt rely heavily on exports from Ukraine. Rising food prices could further exacerbate existing food supply chain crises and political instabilities, especially in the Middle East.
   
• EU-U.S.-China relations could further deteriorate if China supports Putin. Although China has publicly joined Russia in opposing further NATO expansion, it has taken a more measured approach in recent days. China fears damage to its commercial interests in Ukraine, as well as its relations with both EU and NATO countries and Russia. China will likely help Russia manage the impact of any sanctions as long as the cost to China is minimal, and as long as such support does not further damage its relations with Europe and the United States.