IKEA: Leading Sustainably

IKEA: Leading Sustainably

The idea of companies setting climate goals and strategies to reduce their carbon footprint is now entering the mainstream. Companies such as Microsoft and Apple are already huge purchasers of renewable energy. IKEA is one of the companies leading the charge, aiming to reduce its carbon footprint by 15% by 2030, and earmarking nearly SEK 10 billion for the next decade to achieve its goals.

IKEAs ambitions go beyond Power Purchase agreements, and the company is now investing into ideas that have been promoted by academics, greens and governments for a number of years. One such concept is the circular economy. IKEA recently revealed that it was going to trial the leasing of furniture in Switzerland, with the aim of the project being to prolong the life of IKEA’s furniture. After the leased furniture has been returned, IKEA will repair or sell it, or lease it again to another customer. If successful, the initiative could invoke a large change in the furniture giant’s operations.

Leasing is not the only example of IKEA embracing the model of the circular economy. According to the Financial Times, IKEA is also planning on launching a spare parts operation where customers can access replacement components of furniture and interior decorations which are no longer in stock.

IKEA believes that consumers are becoming aware of the climate crisis we face and consumer behaviour now reflects this change, although much of the behaviour is also the result of government incentives such as lowering taxes on eco-friendly cars, energy taxes and labelling of produce. Companies are realising that incentives might be stretched, turning into penalties against carbon polluters and are preparing for this through carbon-dioxide reducing measures. According to Torbjörn Lööf, IKEA’s CEO, the company’s willingness to change is encapsulated in the words of founder Ingvar Kamprad during one of his last meetings with company executives before he passed away, when he said it was important for IKEA to think in the long term; “where should the company be in 200 years?” This mindset may have to be embodied by consumers and companies alike. When challenged by his managers, surprised by the exaggeration, Kamprad was asked if this wasn’t a bit too much. “Yes, of course”, he said, “but then you make the short-term plan: that means the next 100 years”.