Supply Chain Circular Economy

IKEA and Kingfisher Pledge Ambitious 'Net Positive' Agendas, But Can They Work?

By Leon Kaye | Published 11 years ago | About a 6 minute read

Today an ever-increasing number of companies and brands are likely to have a corporate social responsibility agenda because customers and other stakeholders demand they hold themselves accountable for their environmental and social performance. Now more companies are pushing the boundaries, or in reality, talking about going further than merely just becoming more “sustainable” or “responsible.” Zero-waste has become a mantra at some of the world’s most iconiccompanies, including Procter & Gamble and Unilever. Now two large Europe-based firms, IKEA and Kingfisher, both of which contribute to the building of homes and the furnishings that go in them, are pledging to become “net positive.” But in a world in which natural resources have become scarcer, can these companies truly contribute to the planet more than what they can, and will, take from it?

Let’s start with IKEA, the company famous for making stylish furniture more affordable across the globe. At the end of last year the company announced its “People & Planet Positive” sustainability strategic plan for 2020. Once mocked and criticized for poor quality and its questionable sourcing of raw goods, IKEA has indeed improved on its overall environmental and social performance. The company sells energy-efficient bulbs at low prices and by 2016 will sell only LED bulbs; more toxic chemicals have been eliminated from the glues and finishes of its furniture; investment in renewable energy has increased rapidly; and more responsibly grown cotton has been sourced. But do the deeds in the CSR report match the reality in the stores — or even more importantly to many of the firm’s stakeholders, in the forests?

Despite all this talk about sustainability, however, the company still opens stores in suburban neighborhoods only accessible by automobile. True, schlepping a king-sized mattress and bedframe on a bus or subway is a feat few customers would attempt, but as more cities seek to revitalize their downtowns, IKEA only wants to be a community citizen in an area with convenient freeway access. The company also claims it will instill sustainability thinking throughout its workforce (“co-workers” is the term IKEA uses, avoiding, to its credit, potentially condescending terms such as “associates” and “partners”). The prospect of hourly retail employees, who are often harried while on the job and struggle to make ends meet when off the clock, taking sustainability messaging to heart is at best wishful thinking.

Reading IKEA’s 2020 roadmap is like reviewing a politician’s speech. Lofty as well as laudable, the company promises to be more resource- and energy-independent, push for a better life for people and communities (especially those affected by IKEA’s supply chain) and contribute more clean water to communities than what the company uses — hold tight on that last point as the company will not have a plan out until the end of this fiscal year. Finally, IKEA certainly plans on engaging a bevy of PR professionals: One of the company’s goals, and a garish one at that, is by the end of fiscal year 2015 to have 95% of its employees, 95% of its suppliers and 70% of customers view IKEA “as a company that takes social and environmental responsibility (sic).” That is a lot of talk about polar bears.

Some of the math IKEA uses is puzzling. By 2020, the company aims for a fourfold increase in sales “from products and solutions, inspiring and enabling customers to live a sustainable life inside the home.” Yet at the same time, IKEA has a goal to quadruple the amount of wood coming from “preferred sources” in four years — though that surging amount would still only cover half of the projected total wood consumed by the company. True, IKEA is not only selling products made from wood, but this idea that the firm can follow a Unilever-like plan to sell more “sustainable” products indicates the company is on course for more of a net-negative, not net-positive, agenda.

A company focused more on home building, and remodeling, meanwhile, is on a more realistic path that is more realistic and less rhetorical. Kingfisher, Europe’s largest home improvement retail company that houses several brands, also released a “Net Positive” agenda earlier this year. The ambitious plan rests on four pillars: timber, energy, innovation and communities. Cognizant that the combination of a tangled supply chain and the challenge of changing consumers’ hearts and minds will take at least seven years to change course — which is not enough time — Kingfisher is taking an incremental approach. Some net-positive goals are set for 2015, more for 2020 and others even for 2050 — the year the world’s population is set to reach 9 billion.

Considering forests are a foundation for many of the products we enjoy and places in which we live and work, and the fact that they serve as a carbon sequester in a world emitting more of it, much of Kingfisher’s work is focused on timber. The company aims to be a “net reforestation” leader, creating more forests than what its stores will use. To that end, Kingfisher has a goal to source 100% of its timber and paper from responsible sources. The company's UK home improvement retail chain, B&Q, is well on its way to hitting this mark; 86% of its timber products by volume come from certified sources such as the Forest Stewardship Council and Rainforest Alliance. With talk of collaboration and traceability, it will be interesting to see how the company will measure its progress in 2020 and whether Kingfisher indeed will actually leave more forest than what it takes to create its products. So far the only example offered is the replanting of a cork forest in Spain. Nevertheless, the company seems to be on target.

A bigger challenge is Kingfisher’s quest to be a net-positive energy company. The company boldly proclaims all homes using its products will be zero carbon or net generators of energy. Here is an example of a long-term plan: By 2020, Kingfisher pledges it will help its customers save 38 terawatt hours of energy while reducing its energy intensity per property 45% that year. Eventually (by 2050), Kingfisher wants its customers to live in net-positive homes. Much has to happen beyond Kingfisher’s control in order for that massive change to occur: Regulations across cities and countries must allow homeowners to install technologies such as solar seamlessly; the prices of these systems have to fall in price so more people can afford them; and of course, many homeowners are not going to solely patronize Kingfisher-owned stores for home-improvement purchases. Again, the company will have to launch an effective communications and branding plan to engage employees and customers alike, which is a tall order. So if these goals fall short, will Kingfisher just point to factors that were out of its hands?

Regardless, Kingfisher's plan is more solid than IKEA's as it focuses more on results and less on rhetoric. To proclaim a company is “net positive” is a risky venture that can damage its reputation if it falls far short of its goals. But if such a company can inspire its competitors — or even companies in other sectors — to embark on a similar path, the benefits overall can only add up to a net positive in a hotter and more crowded world.