IKEA is a Swedish-founded furniture company that now resides in Amsterdam. It produces ready-to-assemble furniture and home accessories. The company stresses its focus on climate change mitigation and sustainability and has set aggressive goals for itself during the last decade. Now it is zeroing in on 2030 and ensuring its supply chain is aligned with its mission.
The IKEA People & Planet Positive strategy describes the sustainability plan for the total IKEA value chain. Doing its part to limit CO2 emissions is vital to the company, which says that the years between 2014 and 2019 were the hottest on record. “The urgency to act now is clear,” and its goals align with the Paris climate agreement to keep temperature increases from rising more than 1.5 degrees Celsius from pre-industrial levels.
“To do this, global greenhouse gas emissions must be cut in half by 2030 compared to 2010 — achieved mainly through drastic reductions in GHG emissions and by removing CO2 from the atmosphere through better forest and agriculture management. By 2050, at the latest, this combined effect must reach net-zero emissions,” the company says in its sustainability report.
What are your focus areas?
IKEA makes furniture from wood that is harvested from rainforest nations. With that, it says that sustainability begins at home — and IKEA’s brand and mission are aligned with that thinking. Its furniture is thus lighter and smaller, and it is designed to fit in smaller homes. That corresponds to more sustainable living.
IKEA is also phasing out the use of potentially harmful chemicals when it comes to making that furniture. It says that its products and solutions are both sustainable and safe.
“IKEA already enables people to actively live a healthier and more sustainable life at home with a focus on the efficiency and functions of the home, offering affordable products and solutions for water efficiency, energy efficiency, renewable energy, and waste sorting solutions,” the report says. By that, the company is developing products to promote the circular economy.
Moreover, IKEA will enable people to generate renewable energy and become more energy efficient in their homes. Its goal is also to be water efficient and minimize waste — things that align with sustainability principles and climate change mitigation.
“We took a 9 million dollar hit to our business after Hurricane Sandy. Climate change is a real business risk. That, fundamentally, is why we decided to go for a full 100% cover of our energy production from renewables,” Steve Howard, Chief Sustainability Officer, IKEA Group, said. “We are eliminating uncertainty over carbon pricing and our energy exposure.”
What have you done so far?
Its 2020 goal has been to source all of its wood and paper from more sustainable sources. And it has also been to continue phasing out its use of virgin plastics — something that is now critical to its current 2030 mission statement.
It is furthermore investing heavily in renewable energy and energy efficiency. “The aim is to end our dependency on virgin fossil materials and fuels. We will reduce greenhouse gases and contribute to limiting the global temperature increase to 1.5°C by the end of the century.”
“Their 21-million-euro investment of LED lighting products … yielded a cost savings of around 40 million euros, enabling the company to move aggressively to meet the 2020 sustainability goals that were set in 2012, says the Harvard Business School Case 9-515-033 via UKessays.
Specifically, it says it will rely on recycled wood — to turn waste into usable materials. Indeed, sourcing and producing renewable energy and recycled materials will have a positive environmental impact. The latter enables the circular economy. Its ultimate plan is to run its sites totally on renewable energy.
“IKEA had committed to “reach 50% of wood from more sustainable sources by 2017 and 100% by 2020” and reached “32.4%” in 2013,” says the Harvard Business School Case 9-515-033, via UKessays.
The essay says that it can own the forest from which it harvests the wood, giving it complete control over the practices, or it could source more recycled lumber. Such processes improve production efficiency.
A third option is to use more particle board that is lighter to transport, limiting the amount of wood it uses.
The organization hit its goal of procuring a third of its wood from sustainable sources in 2013. And it sourced half of its half in 2017 from sustainable places. The ultimate aim is to use 100%.
But it wants to go further by halving the greenhouse gas emissions by 2030, which includes getting its supply chain to cut its heat-trapping emissions by 15%. Much of that strategy involves forest management that it is doing right now. To that end, it has been promoting sustainable forest management to eliminate deforestation. How? By using protecting certain areas and replanting others. “This leads to “regenerative projects on degraded land, deforested areas, and agriculturally cultivated areas.”
Additionally, it is becoming water positive. It has led to regenerative projects to clean polluted waters and protect biodiversity. Specifically, it is helping to clean plastic pollution from oceans. And it sources wood, cotton, food, and other raw materials from sustainable sources while focusing on leading projects to clean plastic pollutants from oceans.
“The IKEA supplier code of conduct, IWAY, has been the base for much of our sustainability work since 2000,” it says. “We will continue to develop IWAY standards and expand its implementation further in the IKEA value chain to meet new challenges and to secure good working conditions at IKEA suppliers,” the report adds.” We will continue setting clear standards and expectations for the IKEA business relationships and ourselves.”