According to the ‘Annual Summary and Sustainability Report FY23’ published by Ingka Group, IKEA’s largest retailer, IKEA has successfully decoupled carbon emissions from its financial growth.
In the 2023 financial year, the leader in affordable furniture attained a 24.3 percent reduction in its climate footprint compared to its 2016 baseline. It witnessed a 30.9 percent increase in revenue and set a new standard in the corporate world for Scope 3 emissions.
Learning from IKEA’s success
IKEA’s achievements are a testament to the brand’s unwavering commitment to its ambitious 2030 climate-positive objective. The company aims to achieve 100 percent renewable energy for all IKEA operations by 2030. Additionally, they are pushing for their supply partners to achieve this goal.
Their success in managing to reduce emissions efficiently lies in many innovative initiatives. Not only that, but the brand has focused on a wide range of different sustainability areas to have a positive impact. They have aggressively adopted electric vehicles, increased their investments in renewable energy to 3.8 billion since 2009, and improved energy efficiency measures.
Last year, a whopping 79.2 percent of electricity utilised for IKEA operations came from renewable sources. This marked a significant milestone in the brand’s sustainability journey. A crucial aspect of their strategy is to focus on Scope 3 emissions, which brands notoriously have challenges with. Last year, they recorded a 23.6 percent drop in these emissions since 2016.
The brand is also aligned with the Science Based Targets initiative (SBTi)’s Corporate Net-Zero Standard, setting a visionary goal to achieve net zero emissions by 2050. Achieving this target will involve a minimum 90 percent reduction in absolute emissions, and they plan to do this without relying on carbon offsets.
IKEA is also committed to driving a circular economy and has witnessed significant growth in its product repair and reuse offerings. For example, its buyback and resell service doubled its customer base in 2023. This highlights the shift in consumer behaviour towards more environmentally friendly practices. The brand has partnered with the Ellen MacArthur Foundation to assist with the delivery of its circular vision.
Looking ahead
It’s inspiring to see a large corporation like IKEA not only set ambitious climate goals but implement innovative measures to achieve them. The company is on a journey to reduce more greenhouse gas emissions than the full IKEA value chain emits whilst still growing the IKEA business. They not only recognise the urgency to take climate action but have identified its potential to positively transform the IKEA business across its value chain.
