The financial year 2019 marks an important break in the trend as the climate footprint of the IKEA value chain decreased while maintaining business growth, decreasing to meet the baseline level of FY16. The IKEA Sustainability Report FY19 which was released today outlines progress from across the IKEA value chain and franchise system against the People & Planet Positive strategy.

The sustainability report describes how the IKEA business tackles global challenges such as climate change, unsustainable consumption and inequalities.

Lena Pripp Kovac

“We are on an exciting journey to inspire and enable more people to live healthier and more sustainable lives, while at the same time, create a positive impact for people, society and the planet. FY19 marks an important milestone as this is the first year where we continued to grow – but our climate footprint decreased. With 6.5 percent growth in sales, we managed to decrease our climate footprint by 4.3 percent in absolute terms. This is good news, especially since we know that we need to do so much more to reach our commitments for 2030”, says Lena Pripp-Kovac, Chief Sustainability Officer, Inter IKEA Group.

Highlights from the financial year 2019 include:

Break in the trend – the first year in which the climate footprint has decreased, while maintaining business growth. Retail sales grew by 6.5 % compared to FY18 and at the same time the climate footprint of the value chain decreased by 4.3% in absolute terms, down to the FY16 baseline level. This was driven by a large increase of renewable energy in the production of IKEA private brand products plus significant increases in energy efficiency of the lighting and appliances range.

  • 91% (84% FY18) of the wood used for IKEA private brand products is now from more sustainable sources – defined as FSC (Forest Stewardship Council) or recycled wood
  • 80% of the IKEA home furnishing range assessed against the IKEA circular design principles
  • Testing new ways of product ownership and refurbishing in four countries
  • Using more recycled materials – 59% of polyester used in textile products is recycled, on the way to goal 100% by end of 2020
  • Collections where materials have been sourced to clean plastic waste from oceans (MUSSELBLOMMA) and contributing to reduce air pollution (FÖRÄNDRING)
  • Making renewable energy affordable for more people through IKEA Home Solar in seven retail markets¹
  • Testing sustainable biofuel for container vessels transporting IKEA products – a collaboration with many partners
  • More plant-based food –  a version of the iconic private brand IKEA meatball, made from plant based alternative protein, to be launched in August 2020
  • Updated supplier code of conduct IWAY, making sure suppliers meet or even go beyond IKEA requirements
  • Launch of first programs for social entrepreneurs not directly linked to the IKEA business for example accelerator program together with Ashoka
  • As from January 2020, all single-use plastic home furnishing products taken out of range

After the end of FY19, the decision was made to invest 200 million euros to further speed up the transformation to become climate positive.

“IKEA is committed to making a positive difference. To further speed up action we have decided to make a 100M EUR investment in renewable energy at our direct suppliers plus another 100M EUR for actions to remove CO2 from the atmosphere through better forest management. Most important of all is to take action together. This is the only way forward to achieve the big changes we want to see and that need to happen”, says Torbjörn Lööf, CEO, Inter IKEA Group.

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.