IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports

 
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
IKEA GROUP
FY15   SUSTA INABILIT Y
       R EP ORT
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
CONTENTS
03 | INTRODUC TION
       04 | ABOU T T HE IKE A GROUP
       05 | A MESSAGE FROM PE T ER
       06 | A MESSAGE FROM S T E VE
       07 | T HE Y E A R IN B R IE F
       0 8 | T H E I K E A G R O U P P E O P L E & P L A N E T P O S I T I V E S T R AT E G Y
       0 9 | G O I N G A L L-I N T O TA C K L E C L I M AT E C H A N G E

11 | A M O R E S U S TA I N A B L E L I F E AT H O M E
       12 | PRODUC T S A ND SOLU T IONS
       2 0 | I N S P I R I N G M O R E S U S TA I N A B L E L I V I N G

22 | RESOURCE AND ENERGY INDEPENDENCE
       23 | R ESP ONSIBL E SOURCING
       3 2 | M O R E S U S TA I N A B L E P R O D U C T S
       3 6 | M O R E S U S TA I N A B L E O P E R AT I O N S
       4 8 | E N E R G Y A N D WAT E R I N O U R S U P P LY C H A I N

52 | BE T TE R L IFE F O R PEO PLE & C O MMU NI T IE S
       53 | B E T T E R L I V E S F O R O U R C O -WO R K E R S
       6 0 | B E T T E R L I V E S F O R W O R K E R S I N O U R S U P P LY C H A I N
       70 | SUPP ORT ING HUM A N R IG H T S
       77 | L AST ING CHANGES FOR COMMUNI T IES

82 | GOVERNANC E AND ETHIC S
       83 | HOW WE WOR K
       8 4 | S U S TA I N A B I L I T Y G O V E R N A N C E A N D M A N A G E M E N T
       85 | BUSINESS E T HICS
       86 | PUBL IC P OL IC Y
       87 | ABOU T OUR R EPORT ING

9 2 | P E R F O R M A N C E A G A I N S T TA R G E T S

                                                                          CONTENTS        |     02
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
INTRODUCTION
IKEA was founded seven decades ago
in the farmlands of Småland, where
people had to be thrifty and innova-
tive to make a living. We have come
a long way since then, but even as a
major global retailer, these values still
guide us today. And just as the people
of Småland would always find ways to
turn challenges into possibilities, so
do we. The world is now facing some
of the greatest social and environmen-
tal challenges of our time, and in this
report you will read about how we are
working across every part of our busi-
ness to create a positive impact on
people and the planet.

                                            INTRODUCTION   |   03
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
IKEA GROUP                                                                                        54 million                                          48 %                                                                              EUR 3.5 billion
AT A GLANCE
                                                                                                                                                                                                                                                 Net profit
                                                                                          Visits to the catalogue app                            Female managers
                                                                                                                                                                                                                                             An increase of 5.5 %

FY15                                                                                              An increase of 17 %              We want a workplace where 50 % of                                                                          compared to FY14.
                                                                                                  compared to FY14.                leadership positions are held by women                         Operations in 43 countries
                                                                                                                                   and 50 % by men.
                                                                                                                                                                                                  In addition to our 328 stores in
                                                                                                                                     Today, more than half of our co-workers
                                                                                                                                                                                                  28 countries, at the end of FY15
                                                                                                                                   are women, as are 48 % of our managers
                                                                                                                                                                                                  we had 27 Trading Service Offices
                                                                                                                                   and 33 % of Group Management.
                                                                                                                                                                                                  in 23 countries, 33 Distribution
                                                                                                                                                                                                  Centres and 15 Customer Distribu-
                                                                                                                                                                                                  tion Centres in 17 countries, and
                                                                                                                                                                                                  43 IKEA Industry production units
                                                                                                                                                                                                  in 11 countries.

       Bed &                                 1.9 billion                                                                                                                                              771 million
       Bath                                 Visits to IKEA.com
                                                                                        EUR 31.9 billion                                                                                                    Store visits

With our focus on "Bed & Bath"                 An increase of 21 %                                                                                                                                       An increase of 7.7 %
we provided the many people                    compared to FY14.                                  Total sales FY15                                                                                       compared to FY14.

                                                                                                                                                     9,500
with solutions for a better start,
                                                                                             Total sales translated into Euro
and end, to their day.
                                                                                        increased by 11.2 % to EUR 31.9 billion.
                                              EUR 1 billion
                                                    Online sales                                  FY05   FY14 FY15
                                                                                                                                                   Products across
                                                                                                                                                   the IKEA range
                                                                                                                                                                                                      450 million                       EUR1.6               billion
                                                  across 13 countries
                                                                                                  14.9   28.7 31.9                                                                                   Shopping centre visits                IKEA Food turnover
                                                                                                                                   Every year we renew our range, launching
                                                                                                    Billions of Euros              approximately 2,500 new products,                              to our 65 retail destinations.       Sales at our restaurants,
                                                                                                                                   designed by our in-house and contracted                                                             bistros, Swedish Food Markets,
                                                                                                                                   designers.                                                                                          and co-worker restaurants.

                                                   328                                       155,000                                              All-in for more
                                                                                                                                                sustainable sources
                                                                                                                                                                                                             978
                                            IKEA Group stores                                       Co-workers                                                                                               Suppliers
 EUR 1 billion                             We opened 13 new stores
                                                in 9 countries.                        RETAIL
                                                                                                                                   Now all of the cotton we use for our
                                                                                                                                   products comes from more sustainable                           By the end of FY15 we had 978
                                                                                                                                                                                                  home furnishing suppliers in 50
                                                                                                                                   sources.1
     For climate action                                                                116,500                                                                                                    countries. We form long-term
                                             FY05       FY14 FY15
                                                                                       INDUSTRY                                    In FY15, 50 % of our wood came from                            partnerships with suppliers:
Made up of an IKEA Group                     196        315  328
                                                                                       20,500                                      more sustainable sources,2 and we are                          on average 11 years.
commitment of EUR 600 million
for investment in renewable            Number of IKEA Group stores1                    RANGE &                                     aiming for 100  % by 2020.
                                                                                       SUPPLY
energy, building on the EUR 1.5      We opened three new pick-up and                   18,000
billion invested since 2009, and     order points – in Spain, Norway
a EUR 400 million commitment         and Finland – and entered a new
                                                                                                                                   1
                                                                                                                                     Cotton from more sustainable sources includes cotton
                                                                                                                                   grown to the Better Cotton Standard; by farmers working
from the IKEA Foundation, to         market: South Korea.                                                                          towards Better Cotton; and more sustainable cotton from
support communities most                                                                                                           the USA (such as the ‘e3 Cotton Program’).
                                                                                                                                   2
                                                                                                                                     More sustainable sources for wood are currently defined as
impacted by climate change.
                                       1
                                        There are also more than 40 IKEA stores
                                                                                                                                   FSC™-certified or recycled wood.
                                     operated by franchisees outside the IKEA Group.

                                                                                                                                                                                                                                    ABOUT THE IKEA GROUP                |   04
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
PETER’S MESSAGE
IKEA is a company with a vision to       certainty for business to invest in
create a better everyday life for the    products and services needed for
many people. As we grow, even            a sustainable future. This in turn
more people can create a better life     will create more jobs and greater
at home. And we can continue to          prosperity.
invest in our commitment to making            Overall, we are making good
a positive difference to people and      progress at putting our sustainability
the planet.                              strategy People & Planet Positive to
     We know that improving people’s     work. In FY15 we achieved our target
lives goes beyond home furnishings.      to source all of our cotton from more
We have a great responsibility           sustainable sources. This means that
and opportunity to make a positive       the farmers supplying cotton use
difference and speak up for the          less water, chemical fertilisers and
many people on the topics that matter    pesticides, while increasing their
most. That’s why we want to become       profits. And we have converted our
completely sustainable by transform-     entire lighting range to energy saving
ing our business and why we’re raising   LED - a product that uses up to 85%
our voice on critical issues such as     less energy, offers better functionality,
climate change.                          and saves customers money.
     We are making long-term invest-          There are many challenges ahead
ments, like our new commitment           as we continue to go all-in across
this year to invest EUR 600 million      our business. We can’t do it alone.
in renewable energy, building on         In forestry we are working with the
the EUR 1.5 billion we’ve invested in    Forest Stewardship Council, WWF
wind and solar since 2009. Moving        and others to reach and exceed our
to a low-carbon economy is critical      own targets and help to transform
for the planet and communities, and      the industry. Partnerships like these,
it can bring exciting opportunities      across many areas of our business,
for innovation and growth for us and     will help us make an even bigger
our partners.                            impact.
     We have been speaking a lot about        Despite our achievements this
this, including at the COP21 climate     year, we know we can do better
summit in Paris in December 2015.        next year and the year after that.
It is essential that governments         It’s the spirit that drives IKEA: striving
demonstrate ambition too. Strong         to create a better everyday life for the
policies will provide the clarity and    many people.

                                                                                              PETER AGNEFJÄLL
                                                                                      President and CEO, IKEA Group
                                                                                                                      P E T E R´S M E S S A G E   |   05
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
STEVE’S MESSAGE
                                  This year we’re going all-in: all of the   perform, our customers want to buy
                                  cotton we use for our products now         from us with confidence that we have
                                  comes from more sustainable sources,       done the right thing on their behalf.
                                  our entire lighting range is now LED       We have to make sure that the many
                                  and we are on track to produce as          people behind our products are treated
                                  much energy from renewable sources         fairly and can enjoy a good life too. This
                                  as all of the energy we consume in our     applies to our co-workers, the people
                                  buildings, by 2020. All-in to transform    who work for our business partners in
                                  our business and have a positive impact    our supply chain, and the many people
                                  on people and the planet. All-in to        and communities we impact across our
                                  combat climate change, conserve            value chain.
                                  natural resources and tackle inequality.        One of the big issues we have
                                      You need support from everyone         faced is ensuring that the people at
                                  across the business to make and            our suppliers are not working too
                                  achieve these kinds of big, bold com-      many hours in the week. In China,
                                  mitments. And the results are exciting     where long hours are very common
                                  – we are making a positive difference      in some industries, we’ve required
                                  and sustainability is becoming a natural   a maximum 60 hour work week,
                                  part of our everyday work.                 including overtime, but this year we
                                      We have a huge opportunity to en-      have gone further. Together with our
                                  able people to live more sustainably at    suppliers, we reached working hour
                                  home – by offering affordable products     limits of 49 hours (including overtime),
                                  and solutions and by demonstrating         while maintaining wage levels. This is
                                  that they are good for people’s wallets    a major achievement, accomplished in
                                  and the environment.                       just a few years by working closely with
                                      People were used to spending           our suppliers. By building long-term
                                  good money on lightbulbs that did          partnerships we’ve taken this and
                                  not last very long and used a lot of       many other important steps towards
                                  electricity. We worked hard to improve     supporting decent jobs for people in
                                  our LED bulbs – which use up to 85%        our supply chain.
                                  less energy than traditional incandes-          We are determined to play our part
                                  cent bulbs – so they are affordable        in making a fairer world for the many
                                  and great quality. We want to make         people. And we still have much to do to
                                  choosing the sustainable option afford-    extend our impact throughout our value
                                  able, attractive and easy for people.      chain. That’s why we are determined to
                                      But no matter how well our products    keep going all-in.

STEVE HOWARD
Chief Sustainability Officer, IKEA Group
                                                                                         S T E V E´S M E S S A G E   |   06
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
THE YEAR IN BRIEF                                                                                                   ALL-IN FOR COTTON FROM
                                                                                                                    MORE SUSTAINABLE SOURCES
                                                                                                                    Now all of the cotton we use for our products comes from more
                                                                                                                    sustainable sources.1 This means that the farmers supplying
WE’RE GOING ALL-IN                                                                                                  cotton use less water, chemical fertilisers and pesticides, while
TO TACKLE CLIMATE CHANGE                                                                                            increasing their profits. Read more on page
                                                                                                                                                                  28
IKEA Group and the IKEA Foundation committed
a total of EUR 1 billion for climate action, made
up of a EUR 600 million commitment by IKEA
Group for investment in renewable energy
and a EUR 400 million commitment by the
IKEA Foundation to support communities
most impacted by climate change.
Read more on page
                    9
                                                                                                                                      VEGGIE-                  CERTIFIED SEAFOOD
                                                                                                                                      BALLS                    FOR 650 MILLION
                                                                                                                                 – A HEALTHY,                  CUSTOMERS
                                                                                                                                LOW-CARBON                     We achieved our goal for the fish and
                                                    EUR 20.9 MILLION RAISED                                                     ALTERNATIVE                    seafood3 for our restaurants, Bistros,
                                                    DURING THE BRIGHTER LIVES                                                                                  Swedish Food Markets and co-worker
                                                    FOR REFUGEES AND SOFT TOYS                                      We launched the veggieball, a              restaurants to be either Aquaculture
                                                                                                                                                               Stewardship Council (ASC) or Marine
                                                                                                                    healthy alternative to our famous
                                                    FOR EDUCATION CAMPAIGNS4                                        meatball, with 25% fewer calories          Stewardship Council (MSC) certified
                                                    Donated by the IKEA Foundation, these funds will                and the carbon footprint is 30             by FY15.
                                                    improve opportunities for children in some of the               times less.                                Read more on page
                                                                                                                                                                                           30
                                                    world’s poorest communities. Read more on page
                                                                                                        78          Read more on page
                                                                                                                                         14

                                                                          ENTIRE LIGHTING RANGE
                                                                          NOW LED OR COMPATIBLE
                                                                          WITH LED BULBS
50% OF WOOD FROM                                                          LED bulbs are better for our customers’ wallets and the en-
MORE SUSTAINABLE                                                          vironment. They use up to 85% less energy than traditional
                                                                          incandescent bulbs, and last up to 20 years.
SOURCES2
We reached our goal two years
                                                                          Read more on page
                                                                                              17                                                            1
                                                                                                                                                              Cotton from more sustainable sources includes cotton
ahead of schedule. By August                                                                                                                                grown to the Better Cotton Standard; by farmers work-
                                                                                                                                                            ing towards Better Cotton; and more sustainable cotton
2020, we aim to source 100% of                                                                                                                              from the USA (such as the ‘e3 Cotton Program’). 2 More
our wood, paper and cardboard                                                                                                                               sustainable sources for wood are currently defined as
from more sustainable sources.                                                                                                                              FSC™-certified or recycled wood. 3 Crayfish is an exception
                                                                                                                                                            as there are currently no certified fisheries. 4 Figures for
Read more on page
                    25                                                                                                                                      the Soft Toys for Education campaign are from November
                                                                                                                                                            and December 2014, figures for the Brighter lives for
                                                                                                                                                            refugees campaign are from February and March 2015.

                                                                                                                                                                               THE YEAR IN BRIEF                   |       07
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
PEOPLE & PLANET                                                                       2. Strive for resource and energy          GROWING IKEA TOGETHER
POSITIVE STRATEGY
                                                                                         independence. Securing long-
                                                                                         term access to sustainable raw ma-      Our long-term strategic direction,                     Our success depends on the people
                                                                                         terials, having a positive impact on    Growing IKEA Together, outlines our                    we work with both within our busi-
                                                                                         the communities where we source         aim to create a better IKEA, and to be                 ness – our co-workers – and beyond it
                                                                                         materials and using resources           the leader in life at home with long-                  – suppliers, customers, governments
                                                                                         within the limits of the planet. Pro-   term growth and profitability. Sustain-                and other organisations. Find out
                                                                                         duce as much renewable energy as        ability is one of the four cornerstones                more about our partnerships and how
                                                                                         the energy we consume and drive         of our Group strategy. But we cannot                   we work with others throughout this
                                                                                         energy efficiency throughout our        succeed alone.                                         report and on page 84 .
                                                                                         value chain.

                                                                                      3. Take a lead in creating a better
                                                                                         life for the people and commu-                           To be the leader in life at home

                                                                                                                                 OBJECTIVES
                                                                                         nities impacted by our busi-
                                                                                         ness. Extend our supplier Code                           Growth and long-term profitability
                                                                                         of Conduct throughout our value
                                                                                         chain; be a good neighbour, sup-                         A better IKEA
                                                                                         port human rights and act in the
                                                                                         best interest of children.
                                                                                                                                                  1                                      2 PEOPLE
                                                                                                                                                                                            ...through developing all co-workers,
                                                                                      The People & Planet Positive Strategy                                                                 strengthening our culture and making
                                                                                      defines the areas that are most impor-                     GROWING                                    IKEA a great place to work

                                                                                                                                 CORNERSTONES
                                                                                      tant to us and where we can have the
                                                                                      largest positive impact.
                                                                                                                                                 IKEA                                    3 SUSTAINABILITY
                                                                                          This report is an account of our                       ...through offering better products        ...through becoming “people and planet posi-
                                                                                                                                                                                            tive” and always acting in a responsible way
                                                                                                                                                 at lower prices, developing a more
                                                                                      progress against the targets of our
                                                                                                                                                 vital IKEA and becoming more
                                                                                      strategy. It is how we share our
                                                                                      achievements and challenges.
                                                                                                                                                 accesible to the many people            4 LOWER COSTS
                                                                                                                                                                                            ...through lowering our overall cost structure
                                                                                                                                                                                            and simplifying the way we work

                                                                                      For an overview of our progress
                                                                                      against our targets, see page 92   .
                                                                                                                                                                                 GOALS

Our vision is to create a better life for   Our strategy focuses on three areas:
the many people. Our People & Planet
Positive strategy is one of the ways        1. Inspire and enable millions of
we work towards this. It sets out how          customers to live a more sus-
we are going all-in on the things that         tainable life at home. Take the
really matter, from going 100% for             lead in developing and promoting         Read the full strategy:
renewable energy to sourcing all of            products and solutions that en-
our cotton and wood from sustainable           able customers to save or generate       People & Planet Positive
sources. We have made good pro-                energy, reduce or sort waste, use        IKEA Group Sustainability                               Read more about the scope of this report on page 87              .
gress, but we are determined to                less or recycle water: at the lowest
                                                                                        Strategy for 2020                                       Read more about the IKEA Group on page 83            .
do even more.                                  possible price.

                                                                                                                                                           T H E IK E A P E O P L E & P L A N E T P OSI T I VE S T R AT E GY                 |   08
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
GOING ALL-IN TO
  TACKLE CLIMATE CHANGE
Climate change is a big, global            a driver for innovation and renewal.    uses up to 85% less energy than           “We’re working toward a world        climate change, but policy leader-
challenge that needs a big, bold           It is an opportunity to make our        incandescent bulbs. And we have        where children living in poverty        ship is crucial to provide the stable,
response.                                  business better and meet the needs      set targets to source 100% of our      have more opportunities to create       long-term framework needed for
   In 2015, a critical year for tackling   and expectations of our customers.      cotton and wood from more sustain-     a better future for themselves and      business to transform their opera-
climate change, IKEA Group and             That is why we are going all-in to      able sources. We reached this target   their families,” says Per Heggenes,     tions and invest in the products and
the IKEA Foundation committed a            transform our business and ensure       for cotton in FY15 and we are on       CEO of the IKEA Foundation. “Tack-      services for the future. In December
total of EUR 1 billion for climate         that it is fit for the future.          track to achieve it for wood, paper    ling climate change is critical to      2015, Peter Agnefjäll, our President
action by 2020. This includes a               We are going for 100% renew-         and cardboard by 2020.                 achieving this goal and we aim to       and CEO, and Steve Howard, our
EUR 600 million commitment from            able energy – producing as much            Together with our suppliers, we     help poor communities build resil-      Chief Sustainability Officer, were at
IKEA Group to invest in renewable          as the total energy we consume in       have achieved an 18% improvement       ience and improve lives by adopting     the COP21 climate change summit
energy and a EUR 400 million               our operations by 2020. In FY15 we      in energy efficiency since FY121 and   renewable energy technologies in        to share the actions we are taking
commitment from the IKEA                   committed to own and operate wind       we are encouraging them to switch      homes, schools and businesses.”         and to emphasise the importance of
Foundation to support communities          farms that, together with our exist-    to renewable energy too.                  Going all-in means transforming      bold policy measures for IKEA and
most impacted by climate change.           ing wind farms, solar panels and           Going beyond our value chain, the   our business, joining with others       other businesses.
   As a global business, we have a         biomass generators, we expect to        IKEA Foundation’s EUR 400 million      to take a stand and call for positive
clear responsibility – and a great         produce the equivalent of over 70%      commitment will support commu-         change (see page 86 ), and inspir-
opportunity – to have a positive           of our consumption. We have gone        nities most impacted by climate        ing others, including our customers,
impact on people and the planet.           all-in with LED, switching our whole    change (read more about the IKEA       to take action. All parts of soci-
The need to tackle climate change is       lighting range to the technology that   Foundation on page 78 ).               ety have a role to play in tackling     1
                                                                                                                                                                      At tier 1 home furnishing suppliers.

                                                                                                                                                                                        C L IMAT E C HA N G E   |   09
IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
WE MEAN BUSINESS
                             In 2014, we helped to bring together seven key organisations
                             focused on business and climate change to create We Mean
                             Business, a coalition to push for action on climate change.
                                During Climate Week NYC in 2014, Tim Cook, CEO of Apple
                             Inc, joined our President and CEO, Peter Agnefjäll, in leading
                             the call for business action on climate change. Since then, the
                             coalition has become a powerful platform – now made up of
                             over 30 organisations – and helped to build momentum for the
                             Paris climate negotiations in December 2015. We Mean Business
                             has helped hundreds of leading companies and investors to
                             step up and make commitments to climate action. In September
                             2015, the coalition joined with the International Chamber
                             of Commerce and placed a full-page advert in the global edition
                             of the Financial Times, calling for a bold climate agreement
                             at COP21.

                             Find out more at
                             wemeanbusinesscoalition.org

 RE100
RE100 is a collaborative initiative of
leading influential businesses committed
to 100% renewable power, led by The
Climate Group in partnership with CDP,
and supported by We Mean Business.
Together with the reinsurance company,                                                          #GO100PERCENT CAMPAIGN
Swiss Re, we were one of the founding
partners. Since then, 48 other major
businesses from around the world have                                                          We are joining millions of people and a      social media by signing a petition at
joined the campaign, sending a strong                                                          diverse mix of companies and organisations   www.momentforaction.org to show
signal that leading businesses support                                                         to support a campaign to build a brighter    their support for action on climate change
renewables and are helping to drive the                                                        future through a transition to 100% clean    and a 100% clean energy future. The peti-
transition to a low-carbon future.                                                             energy. In the lead up to COP21, we en-      tion was delivered to world leaders during
                                                                                               couraged our co-workers and customers        the COP21 summit.
Find out more at there100.org                                                                  to get involved on IKEA.com and

                                                                                                                                                                C L IMAT E C HA N G E    |   10
A MORE
SUSTAINABLE
LIFE AT HOME
We have a great opportunity and a big
responsibility to inspire the 771 million
visitors to our stores and 1.9 billion visitors
to IKEA.com to live more sustainable lives.
Everyone should be able to do so without
spending more, radically changing the way
they live, or compromising on style or quality.
Many of our products enable customers to
use fewer resources, such as energy and
water, reduce waste and save money on
bills. By collaborating with our customers,
we are learning much more about how we
can enable more sustainable living. We
keep working to expand our range for a
more sustainable life at home, and aim to
achieve a fourfold increase in sales of these
products by August 2020.

                                                  A M O R E S U S TA IN A B L E L IF E AT H O M E   |   11
PRODUCTS AND SOLUTIONS                                                                           PEOPLE & PL ANET                                   S TAT U S   P E R F O R M A N C E I N F Y1 5
                                                                                                 P O S I T I V E TA R G E T S

                                                                                                 Take the lead in developing and                                Sales of products for a more sustainable life at home increased to
                                                                                                 promoting products and solutions                               EUR 1,311 million (EUR 641 million in FY13).
                                                                                                 that inspire and enable people
                                                                                                 to live a more sustainable life at
                                                                                                 home, and achieve more than a
                                                                                                 fourfold increase in sales by August
                                                                                                 2020, compared to FY13.1

                                                                                                 Our energy-consuming products                                  Achieved in FY14. Our measurements give an indication of the pro-
 » 75% of consumers                                                                              will be, on average, at least 50%                              gress we have made, but there are uncertainties in the methodology
                                                                                                 more efficient than our range was                              that mean our calculation is not as accurate as we would like. We are
  are interested in                                                                              in 2008 by August 2015.                                        now reassessing this target and will identify new goals for the future.
  saving energy
                                                                                                 By September 2017, offer the most                              We have made good progress in introducing new energy-efficient
  at home 1 «                                                                                    energy-efficient home appliances at                            appliances to our range, including cookers, dishwashers, fridges,
                                                                                                 the lowest price.                                              oven hoods and washing machines. However, these are not currently
                                                                                                                                                                available in all markets. Although we are working hard to extend the
                                                                                                                                                                availability of the range, it will be challenging to meet this target
                 1
                     IKEA Brand Capital, Spring wave 2014                                                                                                       globally in FY17.

                                                                                                 By September 2016, all our electric                            66% of our electric hobs were energy-efficient induction hobs, up
We are committed to enabling more                   EUR 1,311 million, bringing us half
                                                                                                 hobs will be energy-efficient                                  from 55% in FY14. Not all homes have the electricity infrastructure
customers to live more sustainably.                 way to achieving our target. This
                                                                                                 induction hobs.2                                               required for induction hobs, and we want to stay relevant in all our
Our Democratic Design approach                      is partly as a result of additional                                                                         markets. That is why we will re-assess this target and continue to
combines form, function, quality and                products being classified which has                                                                         offer a range of energy-efficient electric hobs, including both radiant
sustainability at an affordable price.              increased the number of products in                                                                         and induction, and look into other potential solutions.
Every product is developed following                scope. To learn more about how we
this principle. Many enable our cus-                classify our products and make them          By September 2015, our entire                                  All of our lighting range is now LED or compatible with LED bulbs.
tomers to save or generate energy,                  even more sustainable, see page 32 .         lighting range will switch to LED
conserve and re-use water, reduce                                                                offered at the lowest price.
waste and live healthier lives. Small
                                                                                                 Offer leading water and energy                                 Our range of dishwashers offers great water and energy savings and
changes, such as replacing a tradi-                    SALES VALUE OF PRODUCTS                   saving solutions in our range of                               value for money. And we are developing a new range of showers and
tional incandescent with an LED light                  CLASSIFIED AS “MORE
                                                                                                 taps, showers, sink accessories and                            taps with water and energy saving features, though these will be
bulb, can have big benefits – saving                   SUSTAINABLE LIFE AT HOME
                                                                                                 dishwashers by September 2016 –                                launched outside of the target date. We will therefore not achieve this
money and energy.                                      PRODUCTS” (MILLION EUR)
                                                                                                 all at the lowest possible price.                              target on schedule.
    One way we measure our impact
is by tracking the sales of products                                          2,564              Take action in more healthy and                                We have developed a tool called the Balanced Meal, which we have
that we categorise as enabling a more                                                            sustainable food by enabling and                               used to assess the nutritional value of our core food range (the
sustainable life at home. The range                                                              encouraging a more balanced diet.                              range available in our restaurants globally). We are now rolling it
continues to grow, keeping us on                                                                                                                                out to assess food offerings produced in our local markets. We
track to achieve our goal of a fourfold                               1,311           AUG 2020                                                                  launched our GRÖNSAKSBULLAR veggieballs as an alternative to
                                                                                      GOAL                                                                      our traditional meat balls.
increase in the sales of products for                         1,015
                                                        641                           FY15
a more sustainable life at home by                                                               1
                                                                                                   A fourfold increase corresponds to sales
the end of FY20, compared with                                                        FY14       of approximately EUR 2.6 billion per year, as of
                                                                                                 FY20 with baseline year FY13. 2 Where local
FY13. In FY15, these sales more                                                       FY13       conditions allow.                                        Achieved        Ongoing          Not achieved
than doubled compared to FY13, to

                                                                                                                                                                                    A M O R E S U S TA IN A B L E L IF E AT H O M E   |   12
SHARING OUR
 TOP TIPS FOR A MORE
 SUSTAINABLE LIFE AT HOME
                                     wanted to make it fun!
                                        “We rented a flat in central
                                     Prague, fitted it out with our latest
                                     products and gadgets, and invited
                                     44 journalists and bloggers round
                                     for lunch. As our guests toured the
                                     flat, they found tips on how to live
                                     more sustainably in every room.
                                     In the lounge they saw how much
                                     energy they could save by switch-
                                     ing to LED lighting. In the kitchen
VLADIMIR VISEK
                                     they learned how to keep food
Sustainability manager, IKEA Czech
                                     fresher for longer and how much
Republic, Hungary and Slovakia
                                     water they could save by using a
                                     dishwasher instead of washing up
We’re on a mission: to create a      by hand. Our professional chef
movement for sustainable living.     created a delicious meal out of
   As well as showing customers      food that would have gone to
how easy it can be to live a         waste, and we even ran a waste
more sustainable life at home,       sorting workshop.”
co-workers at IKEA Czech Republic
challenged themselves to share       And did it work?                                                                                           Previewed at the Democratic Design Day
this message to a much bigger        “Yes! Our guests enjoyed our event
audience.                            and have been sharing what they

“We surveyed 500 households to
                                     learned through articles, interviews     SNEAK PEEK: ANVÄNDBAR COLLECTION
                                     and stories in newspapers, radio,
find out how people live at home     TV and online. We want to keep the
and their attitudes to more sus-     momentum going and keep coming          ANVÄNDBAR means “useful” in           with built-in flower boxes that        journalists and bloggers sneak
tainable living. And we learned a    up with new ways to engage more         Swedish, and is the name of our       maximise space and encourage           previews of unreleased products
lot. Including that around a third   people in living more sustainably.”     upcoming sustainable life at home     micro-gardening, ANVÄNDBAR             that are designed to make every-
of households still have at least                                            collection featured at the May 2015   products celebrate everyday chores     day life better. Members of the
one incandescent bulb and another                                            Democratic Design Day.                and make it easy to do at least one    IKEA design teams were there to
third wash their dishes under                                                   ANVÄNDBAR products aim to          small thing every day that is good     talk about the thinking behind
running water.                                                               make everyday tasks beauti-           for the planet. The collection will    each collection, and IKEA product
   “The next priority was to share                                           fully simple, while contributing to   be available in stores globally from   designers joined up-and-coming
what we found out and to show                                                a more sustainable life at home.      April 2016.                            designers in a workshop to
that there are many simple ways to                                           From cookware that retains heat         IKEA of Sweden hosts Democratic      design new products to prevent
save resources and money. But we                                             and conserves energy to benches       Design Days every year to offer        food waste.

                                                                                                                                               A M O R E S U S TA IN A B L E L IF E AT H O M E   |   13
HEALTHY LIVING
We want our products to enable a              We are offering healthier and
healthier life for our customers. Since   more sustainable products that our
we added this to our strategy in FY14,    customers can take home from our
we have strengthened our efforts to       Swedish Food Markets or eat in our
create products that enable healthier     restaurants and bistros, and that our
living and are improving the food on      co-workers can eat at work. These will
offer in our restaurants.                 change throughout the year to reflect
     For example, our adjustable work     seasonal ingredients.
desks, such as BEKANT and SKARSTA,            Our new vegetarian, gluten free
support healthy lifestyles by getting     GRÖNSAKSBULLAR veggieballs are
people moving and providing the           based on a vegan recipe and contain
option to stand while working. And our    25% fewer calories than traditional
range of indoor gardening products        meatballs. They are low in fat and con-
like the FRÖER growing set and            tain vitamins, calcium, iron and 30%
SOCKER greenhouse make it easy            of the recommended daily fibre needs.
to grow your own fruits, herbs and        And the carbon footprint is 30 times
vegetables, even in small spaces. We      less than that of a traditional meatball.
are developing this range to include      We also introduced Nordic Fruit Water                                                                    SOCKER Greenhouse
exciting new solutions to inspire even    in FY15, which contains just half the
more people to grow their own at          sugar of the sodas they replaced in
home.                                     our range.                                                   FRÖER Growing set

                                                                                          To assess and improve the calories
                                                                                      and nutritional values of each meal or
                                                                                      product and guide the development of
                                                                                      our food range, we have introduced a
                                                                                      Balanced Meal standard. We started
                                                                                      by assessing our core restaurant
                                                                                      meal range in FY15, and will use the
                                                                                      findings to improve the range.
                                                                                          We want customers to be able
                                                                                      to make informed choices. We have
                                                                                      started to make calorie counts and
                                                                                      other nutritional information available
                                                                                      on menu boards and websites
                                                                                      in some of our markets and our goal
                                                                                      is to ensure we give our customers
                                                                                      in every country the information
                                                                                      they need.
                                                                                          To read more on how we aim
                                                                                      to source our food ingredients
                                                                                      responsibly and make a positive
 BEKANT Work desks                          SKARSTA Work desk
                                                                                      impact for people, animals and the           GRÖNSAKSBULLAR Veggieballs
                                                                                      planet – see page 30 .

                                                                                                                     A M O R E S U S TA IN A B L E L IF E AT H O M E   |   14
OUR IDEAS FOR THE KITCHEN OF TOMORROW
By 2025 our relationship with food         explore the answers. Together,
may be completely different. What          over 18 months, we identified the
will we eat? How will we grow, buy         key trends for how we will live with
and transport food? How will we            food in the future, and developed
prepare it? How and where will             the Concept Kitchen. We then built
we eat? And what does that mean            and displayed the prototypes at
for the design of kitchens in the          IKEA Temporary during the World
future?                                    EXPO Milan 2015. We will use these
    We partnered with students             insights to help understand our
from the School of Industrial              customers’ needs, and inspire and              Our vision for the fridge of the future
                                                                                          helps to avoid waste and save money.
Design at the Ingvar Kamprad               inform our product designs, though             Unlike traditional fridges, it uses
Design Centre, Lund University,            these prototypes may never make                induction cooling that is built into
and the Industrial Design depart-          it to our shelves.                             open shelves, so you can always see
ment at Eindhoven University of                                                           what food you have. And by reading
                                                                                          the RFID (radio-frequency identification)
Technology, along with IDEO – a
global design consultancy – to
                                           Here are some of the innovative
                                           ideas:
                                                                                          tags on the food packaging, it always
                                                                                          stores food at exactly the right
                                                                                                                                       PLANNING FOR
                                                                                          temperature, saving energy too.
                                                                                                                                       THE FUTURE, TODAY
                                                                                                                                      Our designers spend a lot of time      Technology (MIT) Media Lab to
                                                                                                                                      thinking about and planning for the    draw on cutting-edge technology
                                                                                                                                      future. How can we create prod-        and methodologies for running
                                                                                                                                      ucts and solutions that make urban     our Living Lab. This will help us to
                                                                                                                                      living better and more sustainable?    learn even more and use the data
                                                                                                                                      What will the average family look      and insights to develop products
                                                                                                                                      like, and need, in 2050?               and solutions that better meet
                                                                                                                                         To answer these questions, we       our customers’ needs.
                                                                                                                                      set up our Living Lab – a 78 m2           Developed after years of
                                                                                                                                      apartment in Malmö, Sweden             research, including at our Living
                                                                                                                                      that is the home of new ideas to       Lab in Malmö, the Flexible Wall
                                                                                                                                      improve urban living. We use the       – a movable partition with
                                                                                                                                      Living Lab to test our most innova-    integrated furniture – enables
                                                                                                                                      tive products by inviting real fami-   people to adjust the size of a room
This smart table is designed to inspire    This sink system collects used water, so that grey water can be recycled to water house    lies to live, work and play there      and create a new space instantly.
people to be more creative with food       plants and for washing up, and badly contaminated (black) water is sent to the sewerage
                                                                                                                                      for two-week periods, so we can        By making living spaces much
and waste less. Not only does it suggest   pipes for treatment.
recipes for the ingredients you have -                                                                                                assess how they respond to our         more adaptable, it reduces the
it also cooks the food using induction                                                                                                designs, especially their emotional    need for structural renovations,
heating, charges your phone through                                                                                                   reactions.                             which can be stressful, expensive
induction charging and can even be                                                                                                       We are partnering with the          and create a lot of waste.
used as an interactive toy! See the
film     to find out more.
                                               				                   Find out more about the concept kitchen here              .     Massachusetts Institute of

                                                                                                                                                                 A M O R E S U S TA IN A B L E L IF E AT H O M E   |   15
ENERGY
                                                                                                    the most value as we roll it out more
                                                                                                    widely. By FY17, we aim to have a solar
                                                                                                    offer in nine countries.
                                                                                                        While we have made progress with
                                                                                                    making our products more energy and
                                                                                                    water efficient, there are three targets
                                                                                                    in this area that we will not meet and
                                                                                                    have decided to reassess:

                                                                                                    • By September 2016 we aimed for
                                                                                                      all our electric hobs to be energy-
                                                                                                      efficient induction hobs. In FY15,
                                                                                                      66% of our electric hobs met these
                                                                                                      criteria. Not all houses in every
                                                                                                      market have the necessary electri-
We are making many of our electrical       generate their own power at home                           cal infrastructure to power induction      saving solutions in our range of          working on ensuring that we
products more efficient and provid-        from renewable sources. In 2015, an                        hobs, and we want to stay relevant         taps, showers, sink accessories           can make sustainable products
ing customers with options to better       average UK family could halve their                        in all our markets. We will therefore      and dishwashers – all at the lowest       available more consistently across
understand and manage their energy         electricity bills with a solar installation,               reassess this target and continue          possible price. We will not achieve       all our markets.
use. This contributes to reducing          which would pay for itself within seven                    to offer a range of energy-efficient       this by the target date. While our
carbon emissions and monthly bills –       years. In FY15, we expanded afforda-                       electric hobs to suit our customers’       dishwashers offer great efficiency
a win–win for our customers and the        ble home solar to the Netherlands and                      needs, including both radiant and          and value for money, and we offer a    Understanding energy usage
planet.                                    Switzerland, following the successful                      induction, and look into other             number of other smart solutions to
    These products include our ex-         roll out in the UK. We are using what                      potential solutions.                       encourage water and energy savings     We know through our own and oth-
panding range of electric induction        we have learnt from these markets                        • By September 2016 we aimed to              at home, we have much more to do.      ers’ research, that when people see
hobs, steam ovens that cook faster         to make sure we offer customers                            offer leading water and energy             We are now developing a new range      how much energy they are using,
with less energy, and ‘cold start’ mixer                                                                                                         of showers and taps with water and     they make steps to use less. Energy
taps that cut energy consumption by                                                                                                              energy saving features, and we         meters make this possible. But why
around 30% by eliminating uninten-                                                                                                               will keep working to develop more      should they be so hard to read?
tional use of hot water. They all com-      ENERGY-EFFICIENT PRODUCTS                                                                            solutions and products for a more      That is why we developed the
bine function and efficiency.                                                                                                                    sustainable life at home.              SPARSNÄS easy-to-understand
                                            % OF ALL LIGHTING PRODUCTS                                % OF ELECTRIC HOBS
    In FY15 we completed an impor-          WHICH WERE LED OR WERE                                    AVAILABLE IN RANGE THAT                  • By September 2017 we aimed to of-      energy display which receives
tant step in our energy efficiency          COMPATIBLE WITH LED BULBS1                                ARE INDUCTION HOBS                         fer the most energy-efficient home     real-time data through a wireless
journey by achieving our target to                                                                                                               appliances at the lowest price. We     transmitter. It can be installed
switch our entire lighting range to LED.                             90                                                                          have introduced a number of new        anywhere in the home, helping
We put a lot of effort into producing                       75                                                                                   energy-efficient appliances to our     make energy efficiency a part of
simple, informative and fun commu-                                                                                            66                 range, including A and A+ classified   everyday life. We are currently
nications to explain the benefits and             51                                                                 55                          ovens and hoods, A+++ fridges, A+      trialling this meter in Sweden.
                                                                                                           43
inspire customers to feel confident                                               FY15                                                           and A++ dishwashers, and A++ and
                                                                                                                                    FY15
about buying LED products. To find out                                                                                                           A+++ washing machines. However,
                                                                                  FY14
more about why we are excited about                                                                                                 FY14         these are not currently available in
                                                                                  FY13
LED, see page 17 .                                                                                                                  FY13         all markets, which means we will not
    We want to make it affordable                                                                                                                meet the target globally in FY17.
for as many people as possible to             1
                                                  By August 2015, our entire lighting range was LED or compatible with LED bulbs.                We have set up a taskforce that is

                                                                                                                                                                             A M O R E S U S TA IN A B L E L IF E AT H O M E   |   16
to create a no-compromise solu-          energy solutions – making them
                                                                                                                        tion. Now, our LED bulbs come in a       safer for families and better for
                                                                                                                        range of shapes, sizes, and tones        the environment.
                                                                                                                        – all at an affordable price. In fact,      Switching to more efficient
                                                                                                                        we aim to offer the lowest price LED     lighting is good for IKEA too. In
                                                                                                                        bulbs and built-in LED lamps on the      FY15, we converted the lights in
                                                                                                                        market.                                  over a third of our stores to LED
                                                                                                                           In FY15, 90% of all lighting prod-    or other more efficient lighting. We
                                                                                                                        ucts sold were LED or compatible         aim to invest EUR 100 million in
                                                                                                                        with LED bulbs (e.g. lamps which         LED and other efficient lighting
                                                                                                                        customers can use with an LED            systems by FY17, saving each
                                                                                                                        bulb). And we have now switched          store thousands of euros every
                                                                                                                        the entire range to LED so in FY16,      year. Read more on page 39 .
                                                                                                                        this will be all lighting products.         Watch our video to find out
                                                                                                                           The customers buying LED bulbs        more about the benefits of LED.
                                                                                                                        in our stores are also bringing light
                                                                                                                        to the lives of refugees in Asia,
                                                                                                                        Africa and the Middle East through
                                                                                                                        the Brighter Lives for Refugees
                                                                                                                        campaign . For every bulb sold
                                                                                                                        during February and March 2015,
                                                                                                                        the IKEA Foundation donated EUR 1
                                                                                                                        to the UN refugee agency (UNHCR).
                                                                                                                        This generated EUR 10.8 million
                                                                                                                        to light refugee camps with solar
                                                                                                                        lanterns and other renewable             HÅRTE LED work lamp    LEDARE LED bulb

  GOING ALL-IN WITH LED
We are at the beginning of a light-    to hit lighting since the electric light   home by using much less energy.
ing revolution! In September 2015,     was invented! The bulbs can last up          We know LED bulbs are better
we achieved our goal to convert our    to 20 years and use up to 85% less         for people and the planet. Early
entire lighting range to LED – it is   energy than incandescent lighting,         versions of the technology did not
one of the ways we are going all-in    saving customers money on their            provide the right quality, variety
to tackle climate change.              bills. And, of course, enabling them       and price for our customers. So we
  LED lights are the biggest thing     to live more sustainable lives at          have worked hard with our suppliers

                                                                                                                                                       A M O R E S U S TA IN A B L E L IF E AT H O M E   |   17
WATER                                                                           WASTE
                                                                                We aim to motivate customers to turn      like our FÖRTROLIG containers,
                                                                                waste into resources by offering low      and develop more products and
                                                                                price, functional and easy to use solu-   inspiring communications that will
                                                                                tions for sorting and minimising waste    enable customers to prevent food
                                                                                at home.                                  waste by keeping things fresher
                                                                                    A quarter of all food produced        for longer.
                                                                                in the world ends up as waste. In             When it comes to things our
                                                                                FY15 and FY16 we are focusing on          customers no longer need, we want
                                                                                tackling this problem. We undertook       to encourage them to see them as
                                                                                research in Munich, Germany, and          a resource for new materials and
                                                                                Shanghai, China, to understand how        products, not waste. But we know
                                                                                people store their food at home and       that sorting and storing them can
                                                                                their views on food waste. Although       be frustrating. Products like our
                                                                                the findings varied in the different      stackable and compact SORTERA                        FÖRTROLIG Containers
                                                                                locations, there were some things in      bins make it simple and convenient,
                                                                                common. For example:                      enabling customers to sort paper,
                                                                                                                          cans and plastic for recycling.
                                                                                • People do not know how or for how           Designing products that grow
                                                                                  long to store food, and there is no     with children is one of the ways we          Our LADDA rechargeable batter-
                                                                                  consistent advice.                      are enabling customers to enjoy and      ies provide a sustainable alternative
                                                                                • Modern homes do not always have         use their IKEA purchases for as long     to disposable batteries. However,
  BOHOLMEN Washing-up bowls                                                       space for storing food in the right     as possible. For example, our STUVA      rechargeable batteries are often less
                                                                                  way and people need better sys-         changing tables can be transformed       popular than conventional batteries
Water is a precious, and in many         baskets mean customers do not need       tems for identifying what needs to      into desks, and our BUSUNGE and          and are perceived as more expensive
parts of the world, scarce resource.     to keep the tap running – a simple       be eaten before it expires.             MINNEN beds are extendable.              and inconvenient to use. We asked
We want to find new, simple ways to      way to save water and energy. And                                                Learn more about how we design           our customers what they thought
enable our customers to conserve it.     our water-efficient dishwashers save   We are using our findings to build on     sustainable and durable products         about rechargeable batteries and are
    Many of our products are designed    even more water, and time.             our existing food storage solutions,      on page 32 .                             developing solutions to meet their
to save water. All of our kitchen taps                                                                                                                             needs and eliminate their frustrations.
feature a pressure compensating                                                                                                                                    Our new low-cost, easy-to-use charg-
aerator that restricts the flow of                                                                                                                                 ers are one way we are encouraging
water, to reduce water use by up to                                                                                                                                more customers to make the switch.
40%. Since September 2015, all of                                                                                                                                  We will introduce these along with our
our new bathroom taps are equipped                                                                                                                                 expanded range of LADDA batteries
with cold start functions that enable                                                                                                                              in April 2016.
customers to save energy. Many                                                                                                                                         In some markets, when a
of our products, including the                                                                                                                                     product is no longer wanted or
GRANSKÄR wash basin taps, combine                                                                                                                                  needed, we give it a second life
both pressure compensating aerators                                                                                                                                through our furniture take-back
and cold start functions, providing                                                                                                                                programme. To learn more about
both water and energy savings.                                                                                                                                     how we are putting circular thinking
    Washing dishes inefficiently can                                                                                                                               into practice, see page 47 .
waste a lot of water. Our BOHOLMEN
washing-up bowls and rinsing
                                                   GRANSKÄR Wash basin tap                            SORTERA Bins                             BUSUNGE Bed

                                                                                                                                                       A M O R E S U S TA IN A B L E L IF E AT H O M E   |   18
STAKEHOLDER CHALLENGE
  In a world of limited resources, how can IKEA create
  a positive impact on the planet while continuing to sell
  low-cost products that customers can easily discard
  and replace? Isn’t IKEA actually fuelling the problem?

                                           converted our whole range to LED         now in 20 countries and we’re work-                                                 sustainable living. These customers
                                           and we’re making sure our custom-        ing on some innovative projects to                                                  will value IKEA products highly –
                                           ers understand that this is a win–win    close the loop on certain materials.                                                where there is scarcity, there is
                                           for their wallets and the planet.        There is still a long way to go to be a                                             no waste.
                                              At design and development, every      fully circular business, but we are up                                                 In developed markets, IKEA
                                           product is scored on quality as part     for the challenge.                                                                  should change its furniture’s ‘tempo-
                                           of our Product Sustainability Score-                                                                                         rary’ image, whilst maintaining core
                                           card. Then we work closely with                                                                                              attributes of good quality, low-cost
                                           suppliers to secure consistent quality                                                                                       products, by:
                                           in bulk so that we can make great
                                           quality, durable products available                                                                                          • Making returns as easy and con-
                                           to the many people. Many of our                                                                                                venient as buying new products.
                                           products come with guarantees of                                                                                             • Applying its smart engineering and
                                           up to 25 years.                                                                                                                design skills to create solutions for
                                              At the same time, we aim to use                                                                                             reverse logistics and upcycling or
STEVE HOWARD                                                                                                                  PETER BAKKER
                                           fewer resources and ensure the                                                                                                 recycling used products.
Chief Sustainability Officer, IKEA Group                                                                                      President, World Business Council for
                                           materials we use are produced in a                                                                                           • Using its brand power to raise
                                                                                                                              Sustainable Development
                                           way that is good for people and the                                                                                            consumer awareness, changing
We want our customers everywhere           planet. We are transforming our                                                                                                attitudes to value and waste, and
to have access to beautiful, well-         supply chain to source all of our                                                  In the future, all companies will need      making sustainable lifestyles more
made and sustainable home furnish-         wood and cotton from more sustain-                                                 to work towards a more equita-              desirable.
ings. And we believe that you can          able sources, and we want to make                                                  ble world that is also increasingly
have all of that at a low price.           sustainable sources the norm across                                                carbon-, water-, and raw material-        Making sustainable living easy re-
   With billions of visitors to our        the industry.                                                                      constrained. Leading companies are        quires not just smarter furniture, but
stores and website every year,                Used products are a valuable                                                    integrating this into their business      also supporting water, energy and
we have a huge opportunity to              resource, not waste. We’re working                                                 models today: IKEA has already            waste infrastructure. IKEA should
encourage and inspire customers to         towards a circular IKEA, where our                                                 made bold steps in its supply chain       take a visible leadership position
live a more sustainable life at home.      products last as long as possible, are                                             and is working to become a global         beyond home furnishings, inspiring
   Take LED. We worked to make             designed for easy upcycling and re-                                                leader in taking climate action.          other companies to support its vision
these super energy saving, long-           cycling, and secondary materials are                                               IKEA’s expansion into emerging            of people and planet existing togeth-
lasting light bulbs more affordable        used instead of virgin raw materials.                                              markets means new customers can           er positively.
and higher quality. Now we’ve              Our mattress takeback scheme is                                                    access responsibly made, high qual-
                                                                                                                              ity products that encourage more

                                                                                                                                                              A M O R E S U S TA IN A B L E L IF E AT H O M E   |   19
INSPIRING MORE                                                                    PEOPLE & PL ANET                                S TAT U S   P E R F O R M A N C E I N F Y1 5

SUSTAINABLE LIVING                                                                P O S I T I V E TA R G E T S

                                                                                  Take a lead, together with our customers                    Continued to conduct research into the future home
                                                                                  and others in society, in re-thinking the                   and sustainable living, through our Living Lab and
                                                                                  nature of future homes and communities to                   other projects.
                                                                                  provide examples of attractive, affordable
                                                                                  and sustainable living.

                                                                                  Enable our co-workers to live a more sustain-               Number of co-workers participating more than doubled
                                                                                  able life at home by using our solutions or                 since FY14, to 4,033 across 24 countries (FY14: 1,773
                                                                                  knowledge for reducing energy, water and                    participants from 10 countries). Now extending the
                                                                                  waste at home, through a dedicated global                   project to customers, starting with selected families in
                                                                                  project beginning in 2014.                                  France and Switzerland.

                                                                                                                                        Achieved        Ongoing         Not achieved

                                                                                 ENGAGING OUR CUSTOMERS AND CO-WORKERS
                                                                                                                                                                    that enable them to save water and
                                                                                                                                                                    energy or reduce waste. They also
                                                                                                                                                                    receive a handbook with tips on how
                                                                                                                                                                    to live more sustainably and guid-
                                                                                                                                                                    ance on how to capture and share
                                                                                                                                                                    their results from the project. In
                                                                                                                                                                    FY15, 4,033 participants represent-
                                                                                                                                                                    ing 24 countries took part, more
                                                                                                                                                                    than double that in FY14. Each par-
                                                                                                                                                                    ticipant will become a More sustain-
                                                                                                                                                                    able life at home ambassador, and by
                                                                                                                                                                    sharing their experiences with more
                                                                                                                                                                    co-workers, they will help to extend
                                                                                                                                                                    the reach of the project.
                                                                                                                                                                       In FY15, we invited customers
                                                                                 People can learn about the sustain-       Inspiring co-workers and                 to join the project in France and
                                                                                 ability of our products on our website,   customers to take action                 Switzerland, and other countries will
                                                                                 through social media, in our catalogue,                                            follow in FY16. In France and Swit-
                                                                                 on many of our price tags and through     Our More sustainable life at home        zerland, we challenged a total of 256
We want to use our insights and             everyday lives. Effective communi-   in-store events and communications.       co-worker engagement project,            customers, bloggers and co-workers
scale to inspire all 771 million visitors   cation is a key part of how we can   Our co-workers are ambassadors for        launched in FY14, aims to enable our     to adopt a more sustainable life at
to our stores and 1.9 billion visitors to   enable people to benefit from our    our products and services. The more       co-workers to change the way they        home for six months. In France, par-
IKEA.com, and our 155,000 co-workers        products and solutions for a more    they know, the more they can inspire      live at work and at home. Partici-       ticipants were given expert coaching
to lead better and more sustainable         sustainable life at home.            our customers.                            pants choose and use IKEA products       and EUR 500 towards IKEA solutions

                                                                                                                                                       A M O R E S U S TA IN A B L E L IF E AT H O M E   |   20
sustainability knowledge. Attendees
                                                                                   can learn about a variety of topics,
                                                                                   including choosing LED lighting,
                                                                                   working with textiles, growing and
                                                                                   producing food at home, reducing
                                                                                   water and energy consumption and
                                                                                   managing waste. During FY15, events
                                                                                   like these were hosted in Austria,
                                                                                   China, France, Japan, Norway,
                                                                                   Russia, Sweden and Switzerland.
                                                                                   IKEA Belgium ran 18 workshops
                                                                                   across six stores, for members to
                                                                                   share techniques and tips for
                                                                                   repairing damaged products, to
                                                                                   encourage participants to value
                                                                                   old furniture rather than seeing it
                                                                                   as disposable and replaceable. IKEA
                                                                                   FAMILY members are also encouraged
                                                                                   to take part in our community
                                                                                   projects.

that would help them along the way.      Engaging our IKEA FAMILY
They learned how to reduce their wa-
ter and energy use and manage their      IKEA FAMILY is our membership club
waste. They could save as much as        for loyal customers around the world,
EUR 150 per household annually.          who receive exclusive benefits like
  The project will tell us a lot about   discounts and invitations to events. At
the way people live, how they use        the end of FY15 there were 78 million
our products and what they need to       members, making it one of the biggest
enable them to live more sustainably.    loyalty schemes in the world. Members
We will use what we learn to improve     are a key focus for our work promoting
the way we engage customers and to       more sustainable living. For example,
develop better products and services     we invite IKEA FAMILY members to
that meet their needs.                   in-store ‘Mega events’ – sustainability
                                         themed days with special activities and
                                         offers on certain products – and home
                                         furnishing workshops to share our

                                                                                                                          A M O R E S U S TA IN A B L E L IF E AT H O M E   |   21
RESOURCE
AND ENERGY
INDEPENDENCE
We want the way we use resources
and energy to have a positive impact
on people and the planet. That means
finding sustainable sources of natural
resources and energy, and using them
efficiently. This means we can continue
to shrink our environmental footprint
while making affordable, high quality
products.     Working   with  suppliers,
governments, businesses and other
partners enables us to find new ways to
innovate and have a positive influence
beyond our operations and products.

                                           RESOURCE & ENERGY INDEPENDENCE   |   22
RESPONSIBLE SOURCING                                                              PEOPLE & PL ANET                                           S TAT U S   P E R F O R M A N C E I N F Y1 5
                                                                                  P O S I T I V E TA R G E T S

                                                                                  By August 2017, at least 50% of our wood                               In FY15, 50% of our wood was from more sustainable
                                                                                  will come from more sustainable sources.                               sources, meaning that we met our 2017 target two years
                                                                                  By August 2020, we aim to source 100% of                               ahead of schedule.
                                                                                  our wood, paper and cardboard from more
                                                                                  sustainable sources.1

                                                                                  By August 2015, all cotton used in IKEA                                We reached our goal at the end of FY15, and all cotton we
                                                                                  products will be sourced from more                                     use for our products now comes from more sustainable
                                                                                  sustainable sources,2 and we will                                      sources. During FY15, 94.5% of cotton was from more
                                                                                  continuously investigate complementary                                 sustainable sources.
                                                                                  fibres with improved sustainability
                                                                                  performance compared to cotton.

                                                                                  By December 2015, all palm oil, currently                              By August 2015, 87% of our palm oil was from certified,
                                                                                  used in home furnishing products such as                               segregated sources.3 One of our challenges is to map
                                                                                  candles or as a food ingredient, will either                           local food supply chains to understand which market-
                                                                                  come from certified segregated sustainable                             specific food products contain palm oil.
                                                                                  sources or be substituted with more
                                                                                  sustainable alternatives.

                                                                                  By August 2017, all of the leather we use will                         The leather supply chain has changed and is complicated,
                                                                                  have full chain of custody and be produced                             so it will only be possible to trace leather to the
                                                                                  according to standards that help protect                               slaughterhouse by August 2017. Our long-term ambition
                                                                                  forests and respect human rights and animal                            remains to secure full chain of custody and improve social
                                                                                  welfare.4                                                              and environmental standards for the leather we use.

                                                                                  All seafood sourced for the IKEA Restaurants                           We reached our goal and now only source and sell ASC or
                                                                                  and Swedish Food Markets are certified by                              MSC fish and seafood.5
                                                                                  August 2015.

                                                                                  1
                                                                                    Defined as FSC™ certified or recycled wood.
                                                                                  2
                                                                                    Includes Better Cotton, cotton from farmers working
                                                                                  towards Better Cotton Initiative standards, and cotton           Achieved        Ongoing         Not achieved
                                                                                  grown to other regional standards such as e3 Cotton
                                                                                  Program in the USA.
                                                                                  3
                                                                                    Applies to known sources of palm oil only. See page 29
                                                                                  for more detail.
                                                                                  4
                                                                                    Leather production can be linked to deforestation in
                                                                                  some areas – see page 30 for more detail.
                                                                                  5
                                                                                    Crayfish is an exception as there are currently no
We use a huge variety of raw mate-       together to transform markets and        certified fisheries.
rials to make our products and we        protect resources for future genera-
want to make sure these materials        tions. To achieve this we must work
are produced in ways that are good       closely with suppliers and partners to
for the environment and society. We      understand where raw materials come
strive to always increase our positive   from, and support improvements at
impact, including going beyond the       key stages of the value chain.
needs of our business and working

                                                                                                                                                                  RESOURCE & ENERGY INDEPENDENCE                     |   23
BECOMING FOREST AND                                                           STAKEHOLDER CHALLENGE
                                                                               Huge volumes of natural resources are needed to make IKEA products. As a growing
 WATER POSITIVE                                                                business, with more stores opening and more products being sold, the demand for these
                                                                               resources can only increase. How can IKEA truly have a positive impact on people and
We want our business to benefit        fund a conservation study centre        the planet while it has such a large, and growing, environmental footprint?
the world. That is why we have         in the Maliau Basin, Borneo that
committed to becoming forest and       shares forestry research with
                                                                                                                       reduction for each product        opportunity – and responsibility
water positive by the end of FY20.     scientists and students worldwide.
                                                                                                                       sourced, by 2050.                 – to contribute to positive change
Our aim is for responsible forestry    And investing in our own forest
                                                                                                                     • Reduce waste throughout value     for people and the planet, in
and water management to become         operations means we can roll
                                                                                                                       chains by 75%.                    particular when it comes to
the norm, beyond our own supply        out our forest positive approach
                                                                                                                     • Support pre-competitive ap-       resources.
chain. But we cannot do this alone     further, and be more confident of
                                                                                                                       proaches and share information.      Our first step is to use mate-
– we need collaboration to make        securing a sustainable supply of
                                                                                                                     • Start a conversation with con-    rials as efficiently as possible.
this happen.                           wood (see page 25 ).
                                                                                                                       sumers about the impacts of       By using innovative design and
    To become forest positive, we         Being water positive is about
                                                                                                                       consumption.                      lightweight materials we can use
will contribute to ending deforesta-   considering water stewardship
                                                                                                                                                         fewer resources in our products.
tion by promoting the adoption         across our whole water footprint,
                                                                                                                     IKEA can achieve more by working       Secondly, we focus on sourcing
of sustainable forestry methods        from suppliers to customers. We
                                                                             JASON CLAY                              with others, and communicating      our key materials, like wood and
across the whole industry. Through     are exploring ways to improve
                                                                             Senior Vice President,                  what it does, than by itself. Now   cotton, from more sustainable
our people and planet positive         water efficiency in our operations
                                                                             Food & Markets, WWF US                  it’s time to influence others.      sources. In many cases, our work
strategy we commit to use only         and supply chain, supporting
                                                                                                                                                         to secure sustainable resources
wood from more sustainable             customers to reduce their water
                                                                                                                                                         goes beyond the volumes or
sources (currently defined as          impact, and collaborating with        The world is more prosperous
                                                                                                                                                         areas of resources that we need
FSC™ certified or recycled wood)       other stakeholders to develop         than ever. This is a good thing.
                                                                                                                                                         for our own business. We aim to
by 2020, and not to source wood        long-term improved water              Yet our efforts to improve human
                                                                                                                                                         contribute to increasing the sup-
from high conservation value           management.                           well-being have taken a toll on the
                                                                                                                                                         ply of more sustainable materials
forests, unless they are certified        Together with WWF we have          health of our shared home, planet
                                                                                                                                                         across the industry.
as responsibly managed.                been working for many years to        Earth. Today we have surpassed the
                                                                                                                                                            Thirdly, we are changing the
    We have been working in part-      support farmers to reduce their       planet’s carrying capacity – we are
                                                                                                                                                         way we think about materials.
nership with WWF for more than         water use in cotton production,       using the equivalent of 1.5 Earths
                                                                                                                                                         Waste is an outdated concept –
a decade to increase levels of FSC     which is a particularly water         every year.
                                                                                                                                                         we are starting to look at existing
certification globally and fight the   intensive crop. Our new projects         This is everyone’s problem,
                                                                                                                                                         products as ‘banks of materials’
illegal timber trade. So far we have   in India and Pakistan support         but IKEA can be a key part of the
                                                                                                                                                         for the future, and we design new
increased FSC certified forest by      cotton farmers to address their       solution.
                                                                                                                                                         products so they can be easily
around 35 million hectares, an         water impact and many other              It should set targets that encour-
                                                                                                                     LENA PRIPP-KOVAC                    reused, repaired, and recycled.
area roughly the size of Germany       interconnected challenges. We         age innovation and it should meas-
                                                                                                                     Sustainability Manager,
                                                                                                                                                         Creating a circular IKEA requires
and more than double the total         aim to enable farmers to improve      ure progress on how it restores
                                                                                                                     Range & Supply, IKEA of Sweden
                                                                                                                                                         us to change how we work
area needed to supply IKEA.            water management practices            the planet.
                                                                                                                                                         with our supply chain, design
We continue to work on eight           in order to maintain or restore
                                                                                                                                                         products, and interact with our
FSC-related projects in 10             water resources, increase             • Set footprint targets for IKEA’s      The size of our business means
                                                                                                                                                         customers. Closing the loop is a
countries. We also seek the            local collaboration, and ultimately     operations and reduce total global    we use a lot of resources to make
                                                                                                                                                         big challenge, but one with huge
support of local NGOs, participate     secure long-term livelihoods for        footprint regardless of growth.       products that improve our custom-
                                                                                                                                                         potential for a positive impact.
in policy discussions, and fund        people and communities.               • Set targets per unit of production    ers’ everyday lives. Our size and
forestry education initiatives. We                                             that would equal 75% footprint        influence bring a fantastic

                                                                                                                                                RESOURCE & ENERGY INDEPENDENCE             |   24
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