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Company Profile: IKEA

Ingka Group (Ingka Holding B.V. and its controlled entities) is one of 11 different groups of companies that own and operate IKEA retail under franchise agreements with Inter IKEA Systems B.V. Ingka Group has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. Ingka Group is a strategic partner in the IKEA franchise system, operating 367 IKEA stores in 30 countries. These IKEA stores had 838 million visits during financial year 2018 and 2.35 billion visits to www.IKEA.com. Ingka Group operates business under the IKEA vision – to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible can afford it.​

 Commitments

• IKEA has ambition to become climate positive across value chain by 2030 – by reducing more greenhouse gas (GHG) emissions than IKEA value chain emits, net-negative by working with partners, suppliers and customers around the world. 
• Ingka Group has an approved science-based target to:
  – Reduce absolute direct and indirect (scope 1 and 2) GHG emissions from retail and other operations 80% by financial year 2030, from a 2016 base year.
  – For value chain emissions (scope 3), Ingka Group is committed to reducing GHG emissions from customer and co-worker travel and customer deliveries by 50% in relative terms.
  – Inter IKEA Group, which is responsible for developing the IKEA range and supply chain, is committed to reducing emissions relating to home furnishing products and food by at least 15% in absolute terms for the same period. This translates to a 70% reduced climate footprint on average per IKEA product, accounting for estimated growth over the same period.
• Ingka Group committed to and will achieve its target to generate more renewable energy than the total energy it consumes in its buildings by 2020, as part of RE100. 
• Ingka Group is committed to transitioning all last mile home deliveries to electric vehicles (EVs) or other zero-emission transport by 2025 as part of EV100, with the aim of reaching 25% by 2020. 
• Ingka Group is committed to providing access to charging stations at IKEA stores, offices and distribution centers in 30 markets by 2020.
• IKEA strives to use 100% renewable energy throughout the entire IKEA value chain by 2030.
• IKEA is committed to phasing out all coal and oil-based fuels used on-site in production, by 2025.
• IKEA is committed to phasing out single-use plastic from its entire range by 2020.

Emissions reductions

• Inkga Group reduced the GHG emissions from Scope 2 by 43.4% by consuming renewable electricity, reduction by 347,351 tonnes CO2e in financial year 2018. 
• Developments in energy efficiency has seen LEDs improve by 19% in lumens per watt since 2016. Since 2015, IKEA only sells LED light bulbs, which use up to 85% less energy than incandescent bulbs. 

Renewable electricity

• In financial year 2018, Ingka Group generated renewable energy equivalent to 81% of the energy used across its operations, with the aim to reach 100% by 2020.
• In financial year 2018, Ingka Group generated 2,714 GWh of renewable electricity from wind and solar PV (photovoltaic), enough to meet the annual needs of around 529 IKEA stores.
• Ingka Group now has 920,000 solar modules on its sites and owns and operates 534 wind turbines in 14 countries, in addition to over 700,000 solar panels currently under construction in the US. 
• Ingka Group retrofitted a ground source heat pump that will heat and cool the IKEA Helsinki store using 100% renewable energy. It’s projected to save €95,000 each year on energy bills. These same solutions are already being used in some of the IKEA buildings across northern and central Europe, Canada and China. 
• In 2015 the company launched IKEA Home Solar with the aim of making it easy for people to turn their rooftops into micro power stations. Today, they offer Home Solar to customers in six markets, and by 2025, the company aims to make it available across all 30 Ingka Group markets. 
• The average IKEA Home Solar customer saves around €400 a year by consuming their own electricity generated by their solar panels instead of buying it, selling their excess electricity back to the grid, and through other incentives.

Electric vehicles 

• Ingka Group has set a target to secure 100% zero-emission home deliveries by 2025, starting with major cities like Amsterdam, Los Angeles, New York, Paris and Shanghai by 2020. Shanghai’s goal was reached already a year early during 2019. It has already deployed electric vehicles in Australia, China, France and India.
• In 2018, 65% of IKEA stores had electric vehicle charging points (and 75% of the stores operated by Ingka Group).
• IKEA Retail Germany trialled new trailers that customers can pull by bike or by hand to take products home from 12 stores – 93% of customers that used it were happy.

Impact areas

• IKEA is responsible for approximately 1% of world commercial-product wood consumption, making it one of the largest users of wood in the retail sector.
• In 2018, IKEA sourced 85% of its wood from sustainable sources, up from 77% in 2017. The target for 2020 is that all wood used in IKEA products will come from more sustainable sources, defined as Forest Stewardship Council (FSC®) certified or recycled wood.
• By 2030, IKEA promises that every product sold will be designed from the very beginning to be reused, refurbished, remanufactured and recycled.
• By 2030, IKEA will use only renewable or recycled materials to make products – and send nothing to landfill.
• The IKEA Way on Purchasing Products, Materials and Services (IWAY) is the IKEA Group Supplier Code of Conduct. It comprises the IKEA minimum requirements relating to the Environment and Social & Working Conditions (including Child Labour) setting out the minimum environmental and social standards expected from suppliers, including compliance with local laws.
• In 2018, 24% of the polyester it used came from recycled PET (rPET), compared with 10% in 2017.
• Since 2016, all the cotton used to make IKEA products has come from more sustainable sources, contributing to improving farmers’ livelihoods, yields and incomes, and reducing negative environmental impacts.
• IKEA is committed to exploring and improving ways to store carbon through forest and agricultural practices. The company will ensure that carbon remains stored in its products longer through the circular economy.

Unique innovations

• Flatplack sofas – a new sofa frame, SMÅTORP, launched in China in 2018 has just 13 parts – a tenth of what goes into IKEA’s regular sofas. This means simpler, more efficient production, using less water and energy.
• Renewable heating – in 2018, an IKEA site in Novgorod, Russia opened an energy plant with a capacity of 87.5MW, supplying all of the plant’s heat needs. The wood-drying process is particularly heat-intensive. The dryer dries up to 60 tonnes of wood per hour, using energy generated from biomass instead of natural gas. Now, 85% of the energy used at the site is from renewable sources – up from 35% – which is estimated to cut GHG emissions by around 45,000 tonnes a year.
• From air pollution to new materials – their Better Air Now initiative, looks at ways to turn rice straw into new materials that could be used to make IKEA products, thus reducing the pollution associated with the burning of straw.
• Solar panels and batteries sold in store, in partnership with Solarcentury – a new range of batteries that work with existing solar panel systems.
• Democratic Design Days – the business announced several initiatives towards becoming people and planet positive, including a prototype plant-based alternative to the meatball and an urban plant-growing collaboration with designer Tom Dixon.
• IKEA Bootcamp – a startup programme encouraging entrepreneurs to focus on “creating a better everyday life for the many people” and consider the limits of the planet.
• The MISTELN mist nozzle – launching in financial year 2020, and developed together with start-up Altered, this new product fits onto existing taps to cut water use by more than 90%.
• Plant-based Bistro range – In financial year 2018, IKEA launched the veggie hot dog at IKEA Bistros. It is made from plant-based ingredients including carrots, ginger, kale and red lentils, with a climate footprint around seven times less than that of the classic meat hot dog. Within two months of the launch, IKEA stores in Europe had already sold one million veggie hot dogs. 
• TOFTLUND rugs – new product made from recycled PET bottles that look and feel like sheepskin. 
• JOFRID curtains – throws and cushion covers made from a mixture of sustainably sourced cotton and linen made from flax (a much less resource-intensive material than cotton), and coloured with dyes made from agricultural waste, such as nut shells and orange peel.

Policy advocacy

• Communicating the impact of FSC – In 2018, IKEA completed the Value and Impacts Analysis (VIA) project, in partnership with ISEAL, Tetra Pak and Kingfisher, to establish a model to better evaluate and communicate the impact of the Forest Stewardship Council (FSC) accreditation and other certification standards.
• In 2018, IKEA joined the European Furniture Industries Confederation, a body that represents more than 70% of the European furniture industry. IKEA is an active participant in the EFIC workgroup that aims to promote the vision of a circular economy in the furniture sector.
• IKEA Foundation made €700 million of funding commitments between 2015 and 2023 on climate-related programmes.
• IKEA is a member of the Climate and Clean Air Coalition.
• In December 2018, IKEA brought carbon-cutting pledges and actions to COP24 climate talks in Katowice, Poland.

Leadership

• In recognition of the company’s progress in transforming into a circular business, IKEA received the World Economic Forum’s Circular Economy Award in the multinational category, in 2018. 
• IKEA set up the IKEA Climate Action Research report to understand how to inspire and enable IKEA customers to take action on climate change. 
• The IKEA Foundation announced plans in 2018 to spend another €300 million on climate-related programmes between 2020 and 2023 and called on others to follow its lead. 
• IKEA is to build up to 162 new affordable homes in Worthing, in partnership with Worthing Council. Through its development company, BoKlok, which is a joint venture with the construction firm Skanska. 

Source:
IKEA Sustainability Report FY18
Ingka Annual Sustainability Report | FY18 

IKEA offers well-designed, functional and affordable, high-quality home furnishing, produced with care for people and the environment. There are several companies with different owners, working under the IKEA Brand, all sharing the same vision: to create a better everyday life for the many people. IKEA was founded in Sweden in 1943.

About Ingka Group: Ingka Holding B.V. and its controlled entities is one of 11 different groups of companies that own and operate IKEA retail under franchise agreements with Inter IKEA Systems B.V. Ingka Group has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. Ingka Group is a strategic partner in the IKEA franchise system, operating 367 IKEA stores in 30 countries. These IKEA stores had 838 million visits during financial year 2018 and 2.35 billion visits to www.IKEA.com. Ingka Group operates business under the IKEA vision – to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible can afford it.​

About Inter IKEA Group: Inter IKEA Group includes Inter IKEA Systems B.V., IKEA of Sweden AB, IKEA Supply AG, IKEA Industry AB related businesses. Inter IKEA Holding B.V. is the holding company for the Inter IKEA Group.

About the IKEA franchise system: The IKEA retail business is operated through a franchise system with franchisees that are authorised to market and sell the IKEA product range within specified geographical territories. Inter IKEA Systems B.V. is the owner of the IKEA Concept and worldwide IKEA franchisor, who also assigns different IKEA companies to develop the range, supply products and deliver communication solutions. Today, 12 different groups of companies own and operate IKEA sales channels under franchise agreements with Inter IKEA Systems B.V.