IKEA to pump €200m into assembling a 'climate positive' business.

Cash will be spent on green energy projects, and reforestation and sustainable forestry schemes, flatpack giant reveals

Furniture giant IKEA has today announced a major cash injection into its 'climate positive' sustainability strategy, promising to spend €200m on green energy, reforestation and forest protection projects to curb the impact of its flatpack furniture business.

By 2030 IKEA wants to remove more greenhouse gases from the atmosphere than it produces through the production and use of its goods - something it describes as a ‘climate positive' goal.

The investment announced today will therefore be focused on two areas - green energy and reforestation.

IKEA said it will invest in projects aimed at removing and storing carbon through reforestation and responsible forest management. It will also work with its direct suppliers to roll out more renewables for heating, cooling and power, targeting 100 per cent renewable energy use across its supply chain by 2030.

"Our ambition is to reduce more greenhouse gas emissions in absolute terms by 2030 than the entire IKEA value chain emits, while growing the IKEA business, said Inter IKEA Group CEO Torbjörn Lööf. "To reach this goal, we will continue to invest in areas that create impact. This investment will speed up the transition to using renewable energy across our supply chain and remove carbon from the atmosphere through reforestation and better forest management practices."

More than half of the company's climate footprint comes from materials in the products and production, with wood one of main materials IKEA relies on. Alongside reforestation, IKEA said it will work to support restoration of degraded land in a bid to curb emissions.

"We believe that the best way to minimise our climate impact and to contribute to limiting climate change to 1.5C is mainly by reducing our greenhouse gas emissions - but we also need to remove existing carbon from the atmosphere," said Lena Pripp-Kovac, chief sustainability officer at Inter IKEA Group. "We can make a positive difference through our integrated supply chain, our global presence and our forest and climate expertise."

The news comes as IKEA attempts to reshape its business model to fit a ‘climate positive' mould. Earlier this year it opened its ‘most sustainable store' in the UK in London's Greenwich, which features  a new 'Learning Lab' to teach customers upcycling and repair skills and a rooftop garden. Visitors are encouraged to use public transport to reach the store, and bicycle deliveries are available.

IKEA is hoping its customers will reward its sustainability push with loyalty and in-store spending. But the firm's operating profit fell 10 per cent this year to €2bn according to financial results released yesterday, as the costs of its green transformation weighed on its balance sheet. Since 2009 the firm has invested almost €2.5bn on green energy, and it is on track to match its energy consumption with renewables output next year.

27 November 2019

BusinessGreen