Responsible companies are currently concerned with increasing, preserving and protecting resources in line with their acquisition. They manage to carry out their work without environment pollution and even plan various activities for the benefit of the environment.
One of these companies is IKEA, which produces furniture and other household accessories. IKEA has completely transformed its business operations over the years to make them more sustainable. An eco-friendly business mode and recycling waste are key components of IKEA’s sense of corporate responsibility.
100% of the cotton used by the company is produced at farms consuming less water, energy and chemical pesticides. Ingka Group, the largest IKEA retailer has 935,000 solar panels on the roofs of its IKEA stores and warehouses providing energy to the stores.
The history of Swedish company IKEA goes back to 1943. Its founder Ingvar Kamprad started the company by selling pens and switching to furniture five years later.
At the end of the 1940s, the owner of the company paid attention to one fact: furniture was so expensive in Sweden during the period that it was in fact considered to be luxury. The young businessman brought the cheapest furniture for sale to his shop.
Together with low prices, the main difference was the fact that IKEA’s furniture was extendable and comfortable for transportation. The furniture was accompanied with instructions for assembly, making it easier to assemble them at home. Economic, diverse design, easy-to-assemble and cheap furniture – even today these are the characteristics of IKEA’s products, which have made the life better for low and medium-income families.
In 1963, IKEA began entering the markets of other countries, opening a store in Norway, then Denmark and later in Switzerland. The first country outside Europe where IKEA appeared was Japan. In the 1990s the company entered the US. Since the 1980s, IKEA started production of household items too, like mirrors, storage spaces, dishes, various kitchen accessories and so on.
Currently, IKEA is one of the largest companies in the world with clear sustainable development standards.
The key component of IKEA’s vision is to create a better daily life for people. This implies studying the impact of its business activities on customers as well as people employed by IKEA. The company aims to promote equal, diverse and inclusive society, taking care of children and vulnerable persons.
Circular economy and taking care of the climate
IKEA says that COVID-19 showed the company the long-term effect of the pandemic as well as threats related to climate change and biodiversity loss.
The company aims to reach the maximum indicator for climate care by 2030. To this end, IKEA is changing towards a circular business model. This means using renewable and recycled materials, introducing measures directed at eliminating waste. The company is ready for regeneration of resources, protection of ecosystems and improvement of biodiversity.
IKEA’s corporate responsibility involves taking care of forests to strengthen biodiversity, in order to support the livelihoods of people who are dependent on forests and to reduce climate change. To that end IKEA uses wood materials from more sustainable sources: More than 98% of the wood used for IKEA products is either FSC-certified or recycled.
Taking care of the climate is a key part of IKEA’s corporate responsibility. This means the reduction of greenhouse gas emissions and helping to keep global warming below 1.5°C. In cooperation with its environmental partners, IKEA aims to contribute to efforts to ensure access to clean air, clean water, improved health, resilient ecosystems, adoption of justice and equality principles.
As of September 2022, IKEA unites:
- 250,000 employees of the company and their families
- Over 1 billion customers and their families in 63 markets (almost 775 million visits to 468 IKEA stores and 5 billion visits to IKEA websites last year)
- Thousands of suppliers and service providers and their families worldwide. Millions of people who work for IKEA’s global network to produce and transport the company products
- The public where IKEA operates
IKEA’s sustainability strategy for 2030 look like that:
- Inspire and enable more than 1 billion people to live a better everyday life within the boundaries of the planet
- Promote becoming circular and climate positive, and regenerating resources
- Contribute to a fair and equal society
Many types of materials are used to create IKEA’s products. When looking at the climate footprint of the value chain, materials contribute 52.2%. That is why at company they consider it important to focus on elements significantly affecting climate change, including: wood, metals, paper, textiles, plastics. Their combination is approximately 90% of IKEA’s demand for materials, with wood-based materials accounting for the largest part, 60%.
Laminated veneer lumber (LVL) is a material reducing natural wood use by up to 40%. This is a modern material which is strong enough and can even replace metal in some combinations, significantly reducing adverse environmental impact. IKEA uses this technology to create sustainable products as possible at a minimum cost. In 2019, IKEA announced its goal of recycling 100% of polyester by the end of 2020. By 2020, the company used recycled polyester in 90% of the textile produced. IKEA aims at making this indicator 100%.
The Swedish retailer has pledged to eliminate all plastic packaging for its products by 2028, phasing out the remaining 10% of its packaging that still uses plastic and replacing it with more sustainable materials such as paper and cardboard
To make sure that it is possible to repair, remanufacture, reuse and, eventually, to recycle all kinds of products, IKEA has developed its circular product design principles, used for managing the process. The company evaluated over 9 500 products to determine how well those products complied with the circular design principles. This allowed IKEA to define an effective action plan based on which the company will be fully circular by 2030.
Circular design implies that the products manufactured by IKEA are designed for lengthy and practical use. One of the examples of that is beds with a possibility of size regulation – in fact they “grow” with the child and provide an opportunity to be functional and comfortable for many years with no extra costs.
IKEA believes that the success of the company mainly depends on its customers, on creating long-term relations with them – because this creates the future. For this purpose, the company is continuously thinking about new business models and concepts. It is the wish of the company to inspire its customers so that they increase the lifespan of IKEA’s products – to purchase, take care of and distribute these items in a circular manner.
An increasing number of IKEA branches repurchase IKEA furniture from customers who no longer need them and sell the high-quality second-hand products again. For example, in Sweden, one of IKEA’s stores is entirely based on second-hand products, which is a spectacular example of the company’s circular vision. With the second-hand use of the resources, IKEA attempts to tackle climate change and rising inequality challenges. IKEA is striving towards a more sustainable future, and believes that its partners, employees and customers play the most important part in this process.