IKEA GROUP FY15 SUSTAINABILITY - Best Belgian Sustainability Reports
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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
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 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
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
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
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
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
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
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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