IKEA has updated its corporate sustainability strategy, now planning to be energy and resource independent by 2020.
Under its "People & Planet Positive" plan, the company has three priorities:
1. Become energy and resource independent - producing as much renewable energy as is consumed and increasing energy efficiency in operations by at least 20%, while encouraging suppliers to do the same.
Source a minimum of 70% of energy from solar and wind by 2015, and 100% by 2020, at a cost of $2.4 billion for development of these projects.
IKEA already generates 27% of its electricity from renewable energy. It owns six wind farms in Europe and solar powers 90% of its stores and distribution centers in the US, many of which are the largest commercial solar installations in those states. There are also 33 electric vehicle charging stations at 9 stores in western US.
Becoming resource independent means further greening product lines, ensuring all main home furnishing materials, including packaging, are renewable, recyclable or recycled.
"Only renewable energy will be used in IKEA Group operations, while safe chemicals, responsible stewardship of forests, water and farmlands will be the base of its supply chain," the company says.
Although IKEA has long had a sustainable sourcing policy for wood - avoiding endangered forests - it's been criticized recently for not adhering to those standards for all products. The new policy calls for the company to be "forest-positive," committing to replace all the wood it consumes for products through reforestation. Another target is for 30% of wood used to be recycled by 2020.
By 2017, buyers will be required to quadruple the wood sourced from certified forests, bringing those purchases to 50% of all wood IKEA uses in its products.
These efforts "puts IKEA at the forefront of leading companies," says John Sauven, head of Greenpeace UK.
2. Inspire people to live a more sustainable life at home, offering products and solutions that help customers save money by using less energy and water and reducing waste.
They plan to offer the most energy efficient home appliances on the market at the lowest price, and to sell only LED lights by 2016.
"We believe that sustainability should not be a luxury good - it should be affordable for everyone. With over 770 million visitors to our stores, we are excited by the opportunity to help our customers fulfill their dreams at home with beautiful products that help them save money on their household bills by reducing energy and water use, as well as reducing waste.," says Steve Howard, Chief Sustainability Officer.
Shifting to more efficient appliances, such as fridges, cookers or lightbulbs, would reduce energy used by the average household 30 percent. "That's like getting a 10% pay raise for most people," he adds.
3. Create better lives for people and better communities, which includes supporting the development of good places to work throughout the supply chain - encouraging suppliers to not only focus on compliance but also shared values. The company was recently the focus of criticism regarding low wages at some US stores.
Other goals on IKEA's sustainability agenda:
- Prevent and minimize food waste, including leftover customer food, so that none is sent to landfills
- All cotton will be produced in line with "Better Cotton Initiative" practices
- Identify hazardous chemicals and substitute with safe alternatives (this has been ongoing)
- All home furnishings, including packaging, will be made from renewable, recyclable or recycled materials
- 90% of home furnishing products will be more "sustainable" with documented environmental improvements demonstrated by the retailer's sustainability product scorecard
- All IKEA suppliers will comply with the company's code of conduct covering environmental, social and working conditions
- Strive for zero waste to landfill, with a minimum of 90% of the waste from stores and other IKEA operations sorted for recycling
- Become 20% more energy-efficient, while reducing carbon emissions 50%; suppliers will be encouraged to cut emissions 20%
- Reduce transport-related carbon emissions 20% through improved fill rates and using more electric vehicles (among other measures)
- All leather will be produced according to standards that protect forests and respect animal welfare
- 50% of non-renewable materials used in IKEA home furnishing products will be recycled
- IKEA suppliers will be encouraged to become 20% more energy efficient
- All palm oil used for items such as candles or food ingredients will come from verified, sustainable sources
- Become water positive, by contributing to the availability of clean water in communities where the company operates
- Take the lead in selling food that is either low-carbon and/or organic
Here's IKEA's new strategy: