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We have a unique opportunity to make healthy and sustainable living affordable
“FY20 was a very challenging year in many ways, especially with the COVID-19 pandemic disrupting everyday lives around the world. That’s why we would like to start by thanking everyone - our colleagues, customers, suppliers, retailers and many other partners – all our contributors to the franchise system and the extended value chain.”
Read the entire letter from Jon and Lena in the full report.
Our insights confirm the importance of making more sustainable products and services affordable and desirable. They shouldn’t be a luxury for the few. We will use our scale to inspire and enable the many people to live a better everyday life within the boundaries of the planet by 2030.
Healthy and sustainable living
As a global business with the capacity to make a large impact, we know that we have a responsibility to make that impact a positive one. Our ambition is to inspire and enable a better everyday life within the boundaries of our planet, through more sustainable solutions that improve people’s health and wellbeing, and by inspiring and enabling a circular and more sustainable mind-set in society at large.
We’re committed to:
- Inspiring and enabling people to live healthier, more sustainable lives
- Promoting circular and sustainable consumption
- Creating a movement in society around better everyday living
Serving up more plant-based foods
Our plant-based ball, HUVUDROLL, launched in August 2020, is a meat-free alternative to the iconic IKEA meatball. It has only 4% of the climate footprint compared to the ingredients of the traditional meatball, with the same taste, texture and price.
Cleaner indoor air
We think everyone deserves better indoor air quality. FÖRNUFTIG air purifier is optimised for about 10 square metres, making it an affordable option for people living in small spaces. It was launched in mainland China in December 2020 and will be rolled-out in other IKEA markets from 2021.
Prolonging the life of IKEA furniture
In FY20, we made spare parts more accessible. They save the trouble of replacing an entire piece of furniture and reduce waste. Products last longer and have less impact on our environment. During FY20, customers ordered more than 14 million spare parts, with our easy-to-use online ordering system.
- We tested buy-back programmes and new models of ownership, which offer furniture as a service.
- The IKEA home furnishing range is now assessed according to the IKEA circular product design principles.*
- We used more recycled materials.
*With the exception of the Home Smart, Lighting, and Appliance ranges
Circular and climate positive
For example, IVAR and BROR storage systems are made of wood and can be easily treated or repaired, and extra pieces can be added as needed. People can enjoy products like these as their lives and tastes change.
We’re committed to:
- Transforming into a circular business
- Becoming climate positive
- Regenerating resources, protecting ecosystems and improving biodiversity
Our climate footprintDuring FY20 the IKEA climate footprint continued to decrease (even when taking the loss in sales as a result of closed stores into account). We saw a 7% reduction per EUR of retail sales FY19-FY20 due to several improvements. For example, using more renewable energy in production and transport, increasing the energy efficiency in the lighting and appliances ranges, as well as introducing more plant-based food. The loss of sales during FY20 makes the comparison regarding the large absolute reduction of our footprint in relation to last year, somewhat non-representative.
Investing in change
In FY20, Inter IKEA Group announced a EUR 200 million investment to speed up renewable energy investments in production, and to remove CO2 from the atmosphere through forestry and other land-use projects.
Responsibly managed forests play a vital role in climate change mitigation. By enforcing strict requirements, and partnering with different organisations across the world, we have contributed to moving the forestry sector forward.
Other achievements we’re proud of:
- For transport, the share of alternative fuels has taken a significant positive step. Italy and France are now using liquefied or compressed biogas for heavy duty transportation of IKEA products. This results in a reduction of -80% CO₂ eq compared to normal diesel trucks.
- By the end of FY20, IKEA product production achieved a 15.5% reduction in climate footprint in absolute terms compared to baseline FY16, due to the increase in renewable energy and phase-out of coal.
- Increasing the share of recycled polyester: The share of recycled polyester in textile products reached 83% (up 59% in FY19).
Fair and equal
We’re committed to:
- Providing and supporting decent and meaningful work across our value chain
- Being an inclusive business
- Promoting equality
Mitigating the effects of the COVID-19 pandemicThe COVID-19 pandemic has had devastating impacts on people’s health and wellbeing. And with the loss of income and livelihoods, the crisis hit those most vulnerable in society the hardest, increasing inequality and insecurity. Our first priority has been to protect and support the health and livelihoods of our co-workers, customers, business partners and the communities where we operate.
As the COVID-19 crisis hit, IKEA Social Entrepreneurship B.V. joined an unprecedented collaboration between over 50 global organisations to support more than 15,000 social entrepreneurs - helping 1.5 billion people cumulatively in over 190 countries - working to serve the needs of vulnerable groups, many of whom have been disproportionately impacted by the pandemic.
More than 1.7 million products, such as face masks, gloves, beds, bedding, food and toys, have been donated to medical centres and shelters. IKEA has also provided financial support to a number of external IKEA suppliers to help ensure their financial stability during the pandemic. In addition, the IKEA franchisee, Ingka Group, announced an emergency relief fund of EUR 26 million, enabling action in local communities. At IKEA stores, 3D printers have been used to create medical equipment for health workers in need. Additionally, test centres have been set up, and bed linen and mirrors were donated to hospitals. Many markets have taken immediate action to donate IKEA products, produce materials for healthcare workers or make their spaces available for relief and health efforts, in coordination with local authorities and stakeholders.
Putting children first
During FY20 we’ve continued our efforts to implement our IKEA roadmap for children’s rights, which we established in FY19. Our approach is based on the Children’s Rights and Business Principles and the UN Guiding Principles on Business and Human Rights.
Children and young people interact with the IKEA business in various ways – as community members in societies where we operate, as members of families where we do home visits, as visitors to our stores, offices and sites, as participants in product development panels and labs, and in marketing. We are committed to ensuring that children who come in contact with the IKEA business, directly or indirectly, are safe and protected. Our aim is to strengthen child safeguarding across the total IKEA business. During FY20, we continued our efforts to raise awareness and knowledge on child safeguarding with key business functions. We also developed a new child safeguarding policy for Inter IKEA Group. The policy is an essential step forward in our continuous efforts to strengthen child safeguarding measures across the IKEA system and provides requirements for Inter IKEA Group co-workers.
Strengthening our supplier code of conduct
In FY20, the updated IWAY 6 (our code of conduct) was introduced to our suppliers. It includes new topics, such as biodiversity and conservation, animal welfare and an increased focus on the competence development of workers.
Supporting decent work for people from vulnerable areas and marginalised groups
Social entrepreneurs develop business ideas based on making societies and people thrive. IKEA backs and works with social entrepreneurs, which contributes to creating jobs and better everyday lives for people from vulnerable areas around the world.
We currently work with social entrepreneurs in several ways: by partnering with social businesses producing products sold at IKEA stores and online, through financial and non-financial support programmes for social entrepreneurs around the world, and by partnering with local social businesses providing services and upcycled products for the local markets.
During FY20, we have scaled up and stabilised our work with social entrepreneurs. For example, we are focusing on creating a stable demand for the products and most of our existing partners are now producing ‘running’ global social-impact products (as opposed to limited collections), for several IKEA home furnishing business areas. This leads to higher volumes, business continuity and more cost-efficient production throughout the year, resulting in more sustainable jobs.
Our aim is for 95,000 people to work within social business partnerships by 2025. In order to achieve this, we will include more products in the range created in collaboration with existing and new social business partners. During FY20 the following social impact collections and products were launched: HANTVERK, BOTANISK, TILLVERKA, MOAKAJSA and KLARAFINA.