The climate footprint across the IKEA value chain

By 2030, we are committed to becoming climate positive by reducing more greenhouse gas emissions than the IKEA value chain emits, while growing the IKEA business. This is how we contribute to limiting the global temperature increase to 1.5°C by the end of the century.

To become climate positive, we need to reduce the climate footprint of the total IKEA value chain in line with the 1.5°C target – including halving emissions by 2030 and reaching net-zero at the latest by 2050. To reduce more than we emit, we will go beyond the IKEA business and contribute to additional reductions in society by taking an extended responsibility for emissions generated by our customers and suppliers, and in our sourcing areas – not just the part for IKEA.

The impact of COVID-19 on our footprint

In FY21, the total IKEA climate footprint decreased by almost 1.6 million tonnes of CO₂ eq in absolute terms compared to baseline FY16, a reduction of 5.8%, while IKEA sales surpassed previous highs. This means that we are on track towards our 2030 goal. We have reached one-third of the goal with two-thirds of the time remaining. The effects of the pandemic during FY20, make the footprint in relation to last year difficult to compare and as expected our footprint has increased in FY21 compared to FY20 since the sales have picked up.

The climate footprint from materials

(52.2% of the total IKEA value chain footprint in FY21)

A light grey HÅLLBAR waste sorting solution with three open bins filled with plastic bottles, food scraps, and newspapers.
HÅLLBAR waste bins are made from post-consumer recycled material collected from household packaging waste on a commercial scale – 40% is from post-consumer waste and 40% from pre-consumer waste.

The materials with the largest climate footprint

The biggest portion of the IKEA climate footprint comes from raw material extraction and processing materials used in the IKEA range. To reduce our climate footprint, we focus on the materials we use the most and those that have the largest climate footprint: wood, metals, paper, textile furnishings and plastics, representing 90% of our material needs and climate footprint.

Although wood represents the largest material share, metals have a higher climate footprint since they are more energy-intensive to produce. As a result, we aim to significantly increase recycled metal content while securing that for all materials, we have a complete portfolio of actions to reach the required reductions by 2030. To reduce the pressure on the world’s forests, we have set a new goal to use one third recycled wood in IKEA products by 2030.

  • 12.1
    FY16 (Baseline)
  • 11.8
    FY20
  • 13.6
    FY21

Climate footprint (Million tonnes CO₂ equivalent). All climate footprints are not yet heading in the right direction. Since FY20, the climate footprint of materials has increased by 15%. The main reason is that sales recovered as the IKEA business recovers from the COVID-19 pandemic – increasing the amounts of products sold and the materials used. Compared to the baseline FY16 the footprint is now 13% higher.

The climate footprint from food ingredients

(2.7% of the total IKEA value chain footprint in FY21)

A kitchen top with a package of VÄRLDSKLOK plant-based mince, a bowl with mince and herbs and a tray with six mince patties.
In FY21, VÄRLDSKLOK, a plant-based mince, was launched. As with HUVUDROLL, our plant-based meatball alternative, VÄRLDSKLOK is based on pea-protein and will provide a similarly small climate footprint.

In FY21, IKEA restaurants and other foodservice touchpoints continued to operate at a reduced capacity, while the Swedish Food Markets remained open. This impacted the overall sales of food, which in turn reduced the absolute climate footprint. A better indicator for FY21 is tracking the development of the relative climate footprint per kg food ingredient (excl. sold drinking water), which has decreased by 13.4% since the baseline FY16.

The positive development in relative measures is supported by trends in the share between plant-based and meat-based food options.

  • The volume of beef and pork sold in relation to other food decreased from 15% in FY20 to 14.3% in FY21.
  • Compared to our meat-based balls, the sales of plant balls and veggie balls in our restaurants increased from 11% to 14% in sales quantity and from 13% to 24% in the Swedish Food Market, mainly due to the launch of the plant ball.
  • Compared to the meat-based hotdogs, the number of veggie hotdogs sold in the bistro increased from 10% to 13%.

Goal for 2030: To reduce the food-related greenhouse gas emissions in absolute terms by 25%, or a 38% relative reduction in food-related greenhouse gas emissions per calorie, compared to FY16.

  • 0.96
    FY16 (Baseline)
  • 0.76
    FY20
  • 0.70
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from production

(7.9% of the total IKEA value chain climate footprint in FY21)

A young factory worker handling large plywood sheets in a spacious, modern and well-lit factory environment.
Despite the continuing challenges of COVID-19 during the year and stops in production, significant progress was made regarding greenhouse gas emissions reductions at suppliers. Large movements in securing 100% renewable energy for purchased electricity took place. By securing renewable electricity in Russia and China, all IKEA owned factories as of 1st January 2021 only consume renewable electricity – globally.

Goal for 2030: To reduce the absolute greenhouse gas emissions by 80% compared to FY16.

  • 2.9
    FY16 (Baseline)
  • 2.5
    FY20
  • 2.1
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from product transport

(4.3% of the total IKEA value chain footprint)

A three-lane motorway with cars and trucks under a blue sky with dramatic clouds and afternoon sunlight.

In FY21, the climate footprint for product transport decreased in absolute terms by 2.8% compared to the baseline year FY17. However, compared to the previous FY20, the absolute climate footprint increased by 12.9% due to more transports as the world started to recover from the COVID-19 pandemic.

The relative emissions per shipment stayed at more or less the same level compared to last year. On a positive note, our land transport relative emissions decreased by 2.2% compared to FY20 due to an increase in intermodal solutions from 41% to 45%. We also managed to maintain the filling rates of our containers.

However, during FY21, the progress in using biofuels in ocean shipping did not meet our expectations. This was mainly due to the turbulence in the transportation industry and constant network adjustments, followed by high cost pressures from the supply chain challenges. Consequently, the overall share of alternative fuels decreased from 3.3% to 0.8%.

Goal for 2030: To reduce the absolute greenhouse gas emissions from product transport by 15% compared to FY17.

  • 1.14
    FY17 (Baseline)
  • 0.98
    FY20
  • 1.11
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from IKEA retail and other operations

(2.3% of the total IKEA value chain footprint)

A worker in a safety vest and a helmet is walking on a roof lined with solar panels.

While the climate footprint from IKEA retail and other operations is still larger than baseline FY16, it decreased compared to the previous year. This is mainly due to an increase in the share of renewable electricity from 64% to 73% between FY20-21. This is especially true in retail markets where we achieved 100% renewable electricity in FY21 (Canada, Denmark, Estonia, France, Russia, Slovenia, Spain: the Canary and Balearic Islands), and markets where we made significant progress, such as the United Arab Emirates (+24.3% percentage points).

However, the share of renewable energy for the non-electric energy consumption – heating, cooling and fuels – decreased from a 17% renewable energy share in FY20 to 15% in FY21, compared to 17% in the baseline FY16. This decrease is mainly driven by retail expansion, where new stores don’t have 100% renewable heating and cooling solutions in place.

We are working to secure that we only consume renewable electricity by 2025. We are also addressing energy used for heating and cooling that requires large investments in technologies such as ground and air source heat pumps and biogas or biomass boilers.

Goal for 2030: To reduce the absolute greenhouse gas emissions from retail and other owned operations by 80% compared to FY16.
  • 0.53
    FY16 (Baseline)
  • 0.60
    FY20
  • 0.59
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from customer travel and home deliveries

(5.7% of the total IKEA value chain footprint FY21)

A smiling woman getting into a white truck with a heart illustration and IKEA Electric home delivery written on the side.

The climate footprint from customer travel and home deliveries decreased by 0.9% in FY21 compared to FY16. During FY21, the goal to install charging stations at all stores in 32 markets was reached.

Although the share of deliveries made via electric trucks increased from 9.6% to 11%, the climate footprint from home delivery increased by 46% in absolute terms between FY20 and FY21. This is mainly due to the COVID-19 pandemic, online shopping and customer demand for delivery.

Goal for 2030: To reduce the greenhouse gas emissions from customer travel and home deliveries by 50% in relative terms (per store customer) compared to FY16.
  • 1.50
    FY16 (Baseline)
  • 1.51
    FY20
  • 1.49
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from product use at home

(17.1% of the total IKEA value chain footprint in FY21)

Lit LED light bulbs in different shapes and sizes hanging from the ceiling at different heights in front of a green curtain.

The second-largest part of the IKEA climate footprint after materials comes from the electricity needed for lighting and home appliances in our customers’ homes. A small part of the climate footprint comes from gas-driven hobs, refrigerants used for refrigerators and freezers, and the burning of candles.

Since FY20, the climate footprint from product use at home has decreased by 3%, mainly due to improved energy efficiency of our LED bulbs and despite an increase in sales as the IKEA business started to recover from the impact of the COVID-19 pandemic.

The share of renewable electricity that our customers are using has increased by 5% percentage points since the baseline FY16. This highlights the importance of advocating for policies and regulations that enable our customers to consume renewable electricity at home.

Goal: under development

Learn more about the SOLHETTA LED bulbs

 
  • 6.4
    FY16 (Baseline)
  • 4.6
    FY20
  • 4.5
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

The climate footprint from product end-of-life

(6.7% of the IKEA value chain footprint in FY21)

A young man dressed in work clothes is removing the fabric from a yellow armchair inside a modern workshop.

Despite using significantly larger material volumes today, our climate footprint from product-end-of-life has increased by only 1.0% compared to FY16. But our ambitions are much bigger. By transforming into a circular business, we are securing the use of renewable or recycled materials while prolonging the life of our products through reuse, repair and recycling. Becoming a circular business also means designing our products to be recycled, generating secondary raw materials for ourselves and others. As a result, our products are less likely to end up in landfills or be incinerated – reducing our climate footprint from product end-of-life.

In addition, products can’t be recycled if no infrastructure exists. We are working together with communities and societies to increase the possibilities to prolong the life of our products and enable recycling. This is done by supporting the development of responsible waste management set-ups, circular product loops and creating work opportunities in neighbourhoods in connection to product care and recycling. Ultimately, we want to source at least as much recycled materials as the IKEA products generate at end-of-life.

Progress FY21: The climate footprint from product-end-of-life has increased by 1.0% compared to FY16.
  • 1.73
    FY16 (Baseline)
  • 1.60
    FY20
  • 1.75
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

Co-worker commuting and business travel

(0.6% of the total IKEA value chain footprint in FY21)

A young man in summery clothes and sunglasses riding a yellow bike. A canal and a glass facade building in the background.
Co-worker commuting and business travel have been heavily affected during the COVID-19 pandemic. Many of us have been working from home, and business travel has been restricted to business-critical travel. This has caused the climate footprint from business travel to decrease by 92.3%. The co-worker commuting has been less affected since most co-workers work in the IKEA stores and has increased by 2.6% in FY21 compared to FY16, after decreasing by 18.6% in FY20. In this ‘new normal’, it’s difficult to draw conclusions regarding progress versus the set goal. Instead, we have new guidelines for business travel as we return to our offices.
Goal for 2030: To reduce the greenhouse gas emissions from co-worker travel by 50% in relative terms per co-worker compared to FY16.
  • 0.21
    FY16 (Baseline)
  • 0.15
    FY20
  • 0.15
    FY21

Climate footprint (Million tonnes CO₂ equivalent).

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