Product, Service & Design Innovation
IKEA to Invest Over €3B to Ensure Stable Supply of Sustainable Materials

As companies and governments around the world are working to meet climate goals set out by the Paris Agreement, the IKEA Group’s 2016 Sustainability Report shows considerable progress towards its People & Planet Positive strategy and continued long-term investments in sustainability.

According to the report, IKEA has allocated over €3 billion for sustainability investments. This includes a new financial frame of €1 billion, to secure a long-term supply of sustainable materials by investing in forestry, as well as in companies active in recycling, renewable energy and biomaterial developments.

Additionally, the investment includes €1.5 billion put toward wind and solar energy projects since 2009 and €600 million allocated for further investments in renewable energy. Ultimately, IKEA aims to produce as much renewable energy as it consumes in its operations by 2020; it has already reached 71 percent as of FY16.

The report also describes projects such as IKEA’s More Sustainable Store in Kaarst, Germany, currently under construction and due to open in summer 2017. Making use of abundant natural light and environmentally friendly technologies, it will also feature green areas for play and a dedicated transportation concept.

The path toward Science-Based Targets on Forests

Join Sophie Beckham — Senior Manager of Natural Capital Stewardship at International Paper — along with CDP, FSC and more, to learn more about the Accountability Framework initiative (AFi) clarifying best practices in agriculture and forestry supply chains — at New Metrics '19.

“There are many opportunities ahead from forward-thinking businesses to contribute to, and benefit from, the development of the low-carbon economy,” said Peter Agnefjäll, president and CEO of IKEA Group. “Guided by the IKEA vision, to create a better everyday life for the many people, we are determined to have a positive impact on people and the planet.”

IKEA also wants to inspire and enable its many customers to live a more sustainable life at home. The company has shifted its entire lighting range to LED, selling almost 80 million LED bulbs in FY16. If those LED customers all replaced incandescent bulbs, they would save enough energy annually to power almost 650,000 households for a year. The company also launched a new home solar offer in three markets, making renewable energy available and affordable to customers.

Other sustainability initiatives in FY16 include:

  • Sustainable sourcing for all cotton and 61 percent of wood used for IKEA products.
  • Replacing oil-based expanded polystyrene (EPS) in IKEA flat packs with fibre-based, fully recyclable materials.
  • Continuing efforts to create a fully inclusive work environment where all employees, including LGBT+ co-workers, are able to be themselves.
  • Setting aside €443 million per year for the co-worker loyalty bonus program, Tack!
  • 48 percent of managers are now women.

“We have made significant progress toward our People & Planet targets, but there is still more to do,” said Steve Howard, Chief Sustainability officer of IKEA Group. “We want to lead with passion and purpose towards a more sustainable and equal world.”

IKEA is also working to shift to a circular business model, having already instituted furniture take-back schemes and released a line of products made from its own packaging and manufacturing waste.

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