Americans demand low prices and giant warehouse stores where they can buy anything they want. We may not like it, but big box retailers are a part of life. But don’t assume that being big is bad. Massive, world-wide retailers can make a difference especially because they are that big. Enter IKEA, a company with stores all over the world. Critics say that IKEA is a landfill-waste generator because they make huge volumes of stuff that doesn’t last. IKEA only started working toward sustainability in 1999, when it published its first set of environmental priorities, but their new slogan is “low price, but not at any price.”
IKEA is pursuing sustainability in a big way. They stopped using plastic bags. They are investing $77 million in clean technology startups like solar. Today, 71% of all IKEA products are recyclable, made from recycled materials, or both. The company recycles 84% of the waste generated in its stores. When a country introduces stricter emissions rules, like when Japan decided to restrict formaldehyde emissions to levels close to zero, IKEA imposes the new restrictions on its global operations. As a result, Ikea’s policy reflects the strictest emissions policies in countries across the world, even though it sometimes drives costs higher.
IKEA’s sustainability initiative focuses on four areas: products and materials, suppliers, climate change and community involvement.
SUPPLIERS:
IKEA’s requirements for its suppliers are outlined in their code of conduct, IWAY, which you can read online. The requirements include compliance with national legislation, no forced or child labor, no discrimination, payment of at least the minimum wage and compensation for overtime, a safe and healthy working environment, responsibility for waste, emissions and the handling of chemicals. Suppliers are inspected for compliance by a third party auditor, and more than 1,000 audits are done every year to catch suppliers who break the rules. However, some countries – namely China – have been uncooperative with providing correct information. China is a major source of materials, providing 22% of IKEA’s sourcing. IKEA hopes to increase China’s compliance by making consequences harsher and increasing awareness in China and the western world.
PRODUCTS AND MATERIALS:
IKEA also requires third party audits of its wood suppliers. If you’ve ever been to an IKEA store, you know that they use a lot of wood in their products, especially furniture. IKEA has four levels of requirements for its wood suppliers. Their long-term goal is to source wood from FSC-certified forests, although this is a long way off. Currently, 94% of suppliers meet IKEA’s minimum requirements, but only a small number are FSC-certified.
A new forestry plan for 2009-2012 was approved last year where stronger action and more investment will bring certified volumes up to 35%. In 2012 this would correspond to over 5 million pounds of round wood that is being certified as coming from well managed forests, according to the company.
IKEA wants to limit its use of raw materials like wood and its working on new techniques that will accomplish this. One example is a technique where a core of stiff card is sandwiched between thin sheets of wood, called board-on-frame. IKEA’s global CEO says this and similar techniques will make up all of IKEA’s offerings in the future, and solid wood will be phased out.
CLIMATE CHANGE:
IKEA is also addressing its contribution to climate change by examining its carbon footprint in detail and looking at ways to reduce it. In addition to cutting down on business travel and providing public transportation to some of its stores, IKEA has rolled out free bike trailer rentals at some of its stores.
Still, IKEA’s global CEO Anders Dahlvig said at a summit in August: “If we include everything, i.e the extraction of raw material at source, the processing at sub-suppliers, our customers’ transportation to the stores, our customers’ use of our products in their homes (light bulbs, white goods) and of course our own activities at IKEA including our stores, warehouses, all our suppliers, etc., a rough estimate is that our CO2 emissions today amount to around 27 million tones per year”.
But a comprehensive initiative, “IKEA goes renewable,” was launched in 2006 to substantially decrease CO2 emissions. IKEA set the long term objective of powering all IKEA units – stores, warehouses, offices and IKEA owned factories – with 100% renewable energy. IKEA also wants to increase energy efficiency in its units by 25%. As of late 2007, the company was on 42% renewable energy and had achieved a 10% energy efficiency improvement.
For example, the new Karlstad store is the first IKEA store in Sweden heated with a ground source heat pump, reducing heating energy consumption by 80%, which is equivalent to the energy consumption of 150 detached houses per year. The new Spreitenbach store is the first store in Switzerland heated only using wood pellets and sunshine.
At the same summit, Dahlvig summed up IKEA’s efforts this way: “On the one hand I am proud of what we have achieved. However I have some hope that we will be able to speed up our efforts even further in the coming year. We are taking one important new step that we were not ready for until now.
“The environmental agenda has until now been developed as a separate strategy with a top down approach. I believe this was necessary to get us to this point.
“Now, however we have reached a level of maturity in the organization where the sustainability work can be truly integrated in our everyday business agenda and strategies. Sustainability is no longer an activity on its own but it is totally integrated in everything we do. I am convinced that this will make a big difference in the years to come.”
Someone thinks IKEA is doing things right – a more detailed description of IKEA’s sustainability efforts can be found in the Swedish book called Value Based Services for Sustainable Business: Lessons from IKEA.
I enjoy re-using ikea wood in other projects once my original furniture has met the end of its usefulness. Will board-on-frame be as re-usable as previous materials?
Some great detail here, thanks Inhabitat. It is great to see large corporations focus on social responsibility and get a lot of things right. But part of me thinks that despite the big CSR play, some part of IKEA’s business model is simply incompatible with a sustainable world.
IKEA wants to limit its use of raw materials like wood a…stiff card is sandwiched between thin sheets of wood, called board-on-frame… and solid wood will be phased out.
Let’s think about this for a minute. IKEA are going to phase out real wood, a material that lasts centuries, and replace it with cardboard compound. Whilst this may be recyclable my children aren’t likely to be left it in my will or likely to be buying it from a used furniture dealer in 50 years time. IKEA are the Topshop of the furniture, McFlatpack. Surely it’s better to turn a tree into table form today and use it for a couple of hundred years than produce cardboard and mold it into disposable furniture once per decade. It’s time we saw leadership from IKEA in this area but that may simply too much against their grain.
IKEA does a lot to keep up a good PR face, with all of these environmentally friendly policies, and even make relatively high quality products for the price. People are often left wondering, “if IKEA can do it, why can’t other companies?” The simple answer is:
IKEA IS RUNNING THE SINGLE MOST NEFARIOUS AND INSIDIOUS TAX SCAM IN THE HISTORY OF MODERN ECONOMIES.
IKEA is listed as a non-profit organization with the stated mission (paraphrased) to provide healthy living environments to all people around the world. They do not pay any taxes because of this classification and the owner of IKEA is at times the richest man alive. Sustainability means more than simply awareness of the natural environment, it means to be aware of the consequences of our actions on all aspects of our society. By robbing governments of their rightful taxes, IKEA is picking out of the pot funds that could be invested in new technologies, public schools, etc.
IKEA may be mindful of the environment, but it is not sustainable.
ESS, Hold your horses buddy. I totally agree that Ikea’s PR is probably better than their environment policy. In fact as their products are mainly short life cycle products we all are probably better of buying durable stuff instead of stuff at Ikea.
BUT: Being a Dutch law student I can tell you that Ikea IS paying taxes. Before you say stuff like the stuff you said, you should probably have tried to learn a bit more about Dutch Tax Law (as Ikea is officialy a Dutch company). The Dutch law says that EVEN charitable organizations should pay taxes when they enter a merket in which they compete with the normal actors. So shouting that they do not pay any taxes is rather ignorant and lacks complete nuance.
Besides even my statement needs nuance, as I understand it, Ikea is divided up in many many different companies all of which are taxed. Proabbaly the holding is not taxed, but the holding WILL have to pay taxes over the income of their shares, and again, even if the holding is a charity, then still they are competitors with normal legal entities and their turnovers WILL be taxed.
Just thought I should mention that.
Hey, thanks for this post! We’re pointing to it in a piece over on Super Eco, and it’s reminded me to look into just what is IN all that IKEA furniture from the standpoint of offgassing etc.
ffb –
I’m going to have to side with ESS here based on my readings and findings. I looked up some information on the Economist and found that yes, Ikea is listed as a non-profit organization. The Economist further went on to compare how it is the richest foundation in the world, beating out Bill Gates’ foundation by (i believe) about 9 billion dollars. However, despite its apparent wealth, Bill Gates’ foundation has been noted around the world as providing healthcare for needy people. On the other hand, Ikea, and I quote from the Economist.com, “innovation in the field of architectural and interior design.”
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