Structuring the Core Pillars of Business to Foster a Sustainable World

Structuring the Core Pillars of
Business to Foster a Sustainable
World
Exploring IKEA Australia’s intersection of sustainability and
business operations through the lens of Sustainable Materialism.

Agnes Broden
Report Author and Lead Project Researcher
Bachelor of Business Administration student, George Washington University

Structuring the Core Pillars of
 Business to Foster a Sustainable
              World
  Exploring IKEA Australia’s intersection of sustainability and
business operations through the lens of Sustainable Materialism.

                              sei.sydney
                              SEI_sydney
                    -------------------------------
                    www.sydney.edu.au/sei

     Report published by the Sydney Environment Institute

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Table of Contents
1. EXECUTIVE SUMMARY ......................................................................................5
2. INTRODUCTION ..................................................................................................7
   2.1 Introducing the Topic of the Thesis .................................................................7
   2.2 Thesis Statement ............................................................................................8
      2.2.1 Research Objectives ................................................................................8
   2.3 Outline of the Thesis .......................................................................................8
3. MATERIALS .......................................................................................................11
   3.1 Literature Review of Sustainable Materialism ................................................11
   3.2 General Overview of IKEA and IKEA Australia ..............................................15
   3.3 IKEA Australia’s Main Focus within Sustainability .........................................17
   3.4 IKEA Australia’s Incorporation of the Concept of Sustainable Materialism ....20
4. CONCLUSION....................................................................................................23
   4.1 Conclusion of the Research Presented .........................................................23
   4.2 Suggestions for Further Research.................................................................23
REFERENCES .......................................................................................................25

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ACKNOWLEDGEMENTS

This report presents the findings of a research project undertaken by Agnes Broden,
on behalf of the Sydney Environment Institute, the University of Sydney.

This research project explored IKEA Australia’s sustainability and environmental
initiatives under the lens of Sustainable Materialism, with a focus on sustainable
practices and measure that are effectivity in the business case.

The project was designed to expand on the research undertaken by the Sydney
Environment Institute’s Sustainable Materialism research area and aims to
contribute to a core mission of the Sydney Environment Institute: adapting to
environmental change.

The research was supported by the Sydney Environment Institute, and contributions
were made by Michelle St Anne, Deputy Director, who conceptualised and
commissioned the research, and formatted this report, and Anastasia Mortimer,
Content Editor and Knowledge Translation Officer, who assisted in the research
planning and editing.

I would like to thank Preetika Reddy, Sustainability Developer with IKEA Australia,
for her involvement in this research and for the invaluable information she provided
during our interview. I would also like to give a special acknowledgement to
Professor David Schlosberg, Co-Director of the Sydney Environment Institute whose
theoretical perspectives of Sustainable Materialism were used to guide this
research.

Finally, I would like to thank the incredible team at the Sydney Environment Institute,
Michelle St Anne, Anastasia Mortimer and Eloise Fetterplace, who have supported
me in my research, and provided me with guidance, resources, and constant
encouragement throughout the research process. This project would not have been
possible without their helpfulness and dedication. I would also like to extend a thank
you to my family, for their selfless support, and for without whom my Semester at
the Univeristy of Sydney would not have been possible.

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1. EXECUTIVE SUMMARY

This report presents findings on a research project which examined the

sustainability initiatives being taken by IKEA Australia. The research project has

applied the concept of Sustainable Materialism as the overarching lens to assess

how IKEA Australia focuses their sustainability work, and how IKEA Australia is

achieving sustainability.

Sustainable Materialism is a relatively new term, developed to explore the changing

relationship between consumers and material goods. Over the past decade, there

has been a societal shift from mass consumption and production, to a focus on local

community production, involvement, and sustainable impact. Overall, consumers

are becoming more aware of what and how they consume and are increasingly

implementing sustainable practices into their ways of living. This can be seen in

increased collective living situations (Peterson, 2017), as well as in more educated

purchasing decisions (Jackson, 2005). The notion of Sustainable Materialism, when

applied in the business context, can provide companies with a framework to

incorporate sustainability in their product design and across all levels of the supply

chain, to help promote sustainability-oriented and collaborative lifestyle choices for

consumers.

As the world’s largest producer and supplier of furniture and a growing giant in the

food-selling industry, IKEA has placed sustainability at the core of their business

operations. Through their efforts within product design, supply chain management,

investment in local communities and food production, the company is growing as a

leader in sustainability within business. In particular, IKEA Australia is taking

increased action to innovate and implement the company-wide sustainability efforts.

Considering their size and impact, IKEA Australia is adopting practices akin to the

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philosophy of Sustainable Materialism, in a way that fosters both consumer and

producer communities across the world.

In applying the theoretical lens of Sustainable Materialism to an analysis of the

sustainable practices taken by IKEA Australia, this report will present three main

conclusions: (1) it is possible to combine large-scale production and local handcraft

in an effective business matter, (2) it is crucial for companies to understand the

shifting consumer behaviour towards a more sustainably-oriented mindset when

designing physical products, and (3) companies who want to effectively implement

sustainability will benefit largely by incorporating it as a core concept of their

business operations.

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2. INTRODUCTION

2.1 Introducing the Topic of the Report

The primary focus of this report is to highlight the findings of a research project

which examined IKEA Australia’s sustainability efforts and initiatives in relation to

the concept of sustainable materialism. Being the world’s largest furniture retailer,

IKEA’s business operations inevitably have a substantial impact on individuals,

communities, organisations and countries around the world. However, unlike many

other major companies, IKEA has progressively used their position as a business

giant to incorporate sustainability into the majority of their business operations. IKEA

has designed their core values around creating sustainable home solutions in

multiple areas such as furniture, food and energy, while simultaneously making

these widely available and affordable. The company’s investment in sustainability

efforts throughout its supply chain (People & Planet Positive: IKEA Group

Sustainability Strategy for 2020, 2014), as well as in the roots of its production and

design (People & Planet Positive, 2017) has set an industry-wide example for the

opportunity to conduct business in a sustainable way without compromising financial

gain. With multinational corporations increasingly engaging in production and

outsourcing across the globe, supply chains are continuously becoming more

complex and challenging for companies to control thoroughly (Martin, 2011).

Companies like IKEA can set examples within their specific industries, but also

become sustainability leaders by reforming the way society sees and conducts

business on an international and local scale. Therefore, this report aims to pinpoint

the specific areas in which IKEA Australia focuses their sustainability work, as well

as analyse how this is done in relation to the concept of Sustainable Materialism.

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2.2 Research Statement

IKEA Australia, as a part of the larger IKEA Group, has developed a well-integrated

and targeted focus on sustainability within areas such as product design, food and

community involvement, which is evident across the company’s sustainability efforts

and throughout its supply chain. The sustainable practices and measures

implemented by IKEA Australia represent the concept of Sustainable Materialism.

              2.2.1 Research Objectives

The overall purpose of this research project were to:

   •   Identify the main sustainable focus(s) within IKEA’s general sustainability

       efforts, that the company seeks to accomplish.

   •   Discover if and how the sustainability efforts taken by IKEA Australia reflect

       the concept of Sustainable Materialism.

2.3 Outline of the Report

This report will begin with a literature review on the concept of Sustainable

Materialism, which includes a review of past literature on IKEA Australia and its

work and visions within the field of sustainability. The literature sourced for this

research represents a broad selection, ranging from doctoral theses, academic

reports and journals, relevant company reports, websites, statements and press

releases. To further add a qualitative dimension to the research on IKEA Australia,

an interview with Preetika Reddy, Sustainability Developer with IKEA Australia, was

conducted. This interview was performed, as well as analysed, from an objective

third-party perspective.

Following the literature review and interview, the report will further discuss the

previously outlined research objectives in two separate sections. The first section

will discuss and analyse IKEA Australia’s general efforts within the area of

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sustainability, in relation to the IKEA Group’s general approach towards

sustainability. The second section will discuss and analyse IKEA Australia’s

sustainability work in relation to the concept of Sustainable Materialism. The second

section will build upon the previous one and take into consideration the findings

presented earlier in the research paper.

The research conducted in the ‘Literature’ section of the research paper, will then be

presented in the conclusion, and linked to the background literature, as well as to

the analysis of the information gathered in this research project. This will ultimately

serve to answer the research statement presented at the beginning of the

introduction section and will be evaluated against the nature of the research. Lastly,

suggestions for further research within the area of business practices and

Sustainable Materialism will be presented, as well as thoughts on a deeper

investigation into the analysing of multinational corporations in relation to

Sustainable Materialism and its importance on sustainability efforts within the

business sector.

2.4 Limitations of the Report

The main limitation of this report is the time constraint. The paper itself and all

research behind it was conducted over a span of approximately 150 hours ranging

from October to December of 2017. Incorporating the editing phase of the report, it

was finalised in May of 2018. Due to this, it was not feasible to include neither all

material published on Sustainable Materialism or the IKEA Group1 nor IKEA

Australia. However, the material used in this report was thoroughly selected to

incorporate both qualitative and quantitative approaches into the research. Another

main limitation of this report is that it is mainly concerned with the business

1
  Important to note is that the official collective company name is “IKEA Group”, however for simplistic
reasons, the company will be referred to as “IKEA” throughout the thesis.

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operations of IKEA Australia and lacks in-depth research on the company as a

whole. In addition, this eliminates the element of comparison between various IKEA

stores across the globe. This limitation is also further a result of the time constraint

on this project.

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3. LITERATURE

3.1 Literature Review of Sustainable Materialism

In their report ‘The new environmentalism of everyday life: Sustainability, material

flows and movements’ (2006), David Schlosberg and Romand Coles investigated

the nature of Sustainable Materialism through three key frameworks. These

frameworks are developed around (1) a societal shift from individual consumption

and production to collaboration-based systems, (2) power relations over the circular

flow of “[…] things, information and individuals” (Schlosberg and Coles, 2006, p. 1)

and (3) the somewhat controversial realization of the destructive human impact on

the natural environment (Schlosberg and Coles, 2006).

By using these frameworks, Schlosberg and Coles synthesise the theoretical

approach of Sustainable Materialism and the foundation upon which it is

established. Sustainable Materialism in its simplest form is a term coined to describe

how communities across the globe derive material from the environment in order to

satisfy basic human needs (Schlosberg and Coles, 2006). The concept has gained

relevance in recent years, due to numerous social movements arising as a response

to increased public recognition of the human-made environmental degradation

across the world (Schlosberg and Coles, 2006). As a result of this, there has in the

most recent decade been an international cross-cultural rise in interest for

sustainability.

The most commonly used definition of sustainability is based on the 1987

Brundtland Report’s definition of sustainable development, which states that it is

“[...] development that meets the needs of the present without compromising the

ability of future generations to meet their own needs” (Brundtland Report, 1987).

The growing interest in sustainability and sustainable development have laid the

foundation for research into Sustainable Materialism, and how human production

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and consumption habits, as well as extraction of raw materials, production and

design, have a direct impact on the surrounding environment and social structures

(Schlosberg and Coles, 2006). Globally, consumers are starting to move away from

simply protesting the impact that large corporations have on their surrounding

environments, and instead, they are using their power to purchase products that

enhance handcraft-oriented operations and support the local communities in which

they operate (Schlosberg and Coles, 2006).

The move away from unsustainable production methods and design, as well as

labour and environment intensive mass-production system, towards focus on

sustainable products, can be is a result of the collaborative efforts between

individual impact and larger changes in business operating systems (Schlosberg

and Coles, 2006). In order to respond to these increased demands for sustainable

design and production, companies are gradually starting to redesign their supply

chains, sourcing practices and product design, to fit more sustainability-focused

business models (Schlosberg and Coles, 2006). The flow of material, from sourcing

to finalised products, are increasingly seen as circular, rather than linear, and there

is an increased emphasis on long-term investment in smaller ‘hand-craft’

communities and their workers (Schlosberg and Coles, 2006).

The idea that society is increasingly moving towards methods of rebuilding

consumption and production habits is further discussed by Schlosberg in his article

‘Theorizing Environmental Justice: Expanding Sphere of Discourse’ (2013).

Schlosberg argues that this movement within environmental justice encompasses

people’s desire to not only live and consume in an environmentally-considerate way

but also to take part in reforming everyday practices in a collaborative way, to

ultimately build sustainable societies (Schlosberg, 2013). The idea that individual

lifestyles are making this shift towards prioritising sustainability and valuing

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collective collaboration displays a need for companies to adapt their production

processes and supply chain management to meet new consumer demands.

In his report ‘The Power of Sustainable Materialism’ (2017), Dakota Peterson

emphasises that Sustainable Materialism encompasses an examination of how

individuals globally, are collectively attempting to change their consumption

behaviours to better reflect the “recent social and ecological realizations about the

industrialized world” (Peterson, 2017, p. 1). As people become increasingly aware of

the negative effects of human-made activities on the natural environment, they are

aggressively seeking ways to be sustainable in their consumption habits, and live a

sustainable lifestyle (Peterson, 2017). These collective and individual efforts of

sustainable consumption result in an overall change in society towards an informed

and sustainably-aware consumption pattern that steers away from previous social

norms that materials play a large role in defining individuals amongst their peers

(Peterson, 2017).

Taking the changing societal and individual consumption patterns into consideration,

Sustainable Materialism presents companies with the challenge to rethink their

fundamental business operations, in order to meet the changing demand. In the

report ‘Motivating Sustainable Consumption’ (2005), Tim Jackson explores the

nature of consumer behaviour in relation to the concept of Sustainable Materialism.

Understanding consumer behaviour, and being able to follow ongoing behavioural

trends, is a key factor for companies to adapt their production and supply chain

management to achieve sustainable business practices (Jackson, 2005).

Consumers desire material goods, not merely due to their functionality, but also

because they become part of the individual’s identity. Therefore, the role of

Sustainable Materialism includes an element of symbolic meaning, which is

enrooted in social structures such as “[...] identity, social cohesion, group norms and

the pursuit of personal and cultural meaning.” (Jackson, 2005, p.4). However, not all

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purchasing patterns can be directly affected by individual desire to consume certain

goods. Some unsustainable purchasing habits have been difficult to disrupt,

because they have become a vital part of the way society consumes goods

(Jackson, 2005). This further supports the crucial element of unlocking these

purchasing behaviours, and further fostering sustainable consumption patterns by

producing and designing sustainably, for a sustainably-aware consumer (Jackson,

2005).

Tying together the new sustainability trends in consumption as well as an increased

investment in these practices from companies, there is a crucial element of design

in Sustainable Materialism. In the thesis ‘Sustainable Materialism: Exploratory

research on designing for reflection on materialistic behaviours in the domain of

Interaction Design’ (2010), Aaron Mullane further discusses the design aspect of

Sustainable Materialism. Interaction design is a term used to highlight the interaction

between the user of a product, and the physical construct of the product itself. It

aims to unite the elements of technology and social innovation, and use these to

design products and solutions that foster sustainable lifestyles (Mullane, 2010).

Further, Mullane bases his discussion of interaction design on two key pillars:

   1. The Material Design of Products (Mullane, 2010, p. 7);

   2. Designing for Sustainable Lifestyles and Decisions (Mullane, 2010, p. 7).

These two pillars analyse Sustainable Materialism through the physical construct of

the product, as well as the fundamental design of it, respectively. The concept of

interaction design proposes a solution to the long-lasting trends of rapidly increasing

consumption, by emphasizing longevity. By putting more value into product design

and using sustainable and long-lasting materials in their physical construct,

companies have the opportunity to take part in fostering sustainable consumption

(Mullane, 2010).

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To conclude the literature review on Sustainable Materialism, there are a few key

points that are crucial for companies to take into consideration when working with

this concept. As discussed by both Schlosberg and Coles (2006) and Peterson

(2007), there is a global movement towards sustainable consumption. As people

increasingly become aware of the effects of climate change on the natural

environment, they are looking for ways to consume and live more sustainably. Due

to this changing mindset, Jackson (2005) highlights the importance to not only

understand the changing relationship between humans and materialistic goods, but

also work towards promoting sustainable solutions. This can be done in multiple

ways, as seen in Schlosberg and Coles (2006) suggestion for companies to foster

handcraft and local small-community production as well as Mullane’s (2010)

emphasis on the element of design in sustainable production.

3.2 General Overview of IKEA and IKEA Australia

The first ever IKEA store opened up in 1958 in Älmhult, Sweden, by the founder

Ingvar Kamprad. Since then, the business empire has grown to over 340 stores in

28 countries globally, and further growth is anticipated over the upcoming years

(People & Planet Positive 2017, 2017). In their “Yearly Summary for the Financial

Year 2016”, the company reported a net profit of €4.1 billion, as well as a worldwide

product range that totalled 9,500 different products. The same year, IKEA reported

having a total of 163,600 employees, with 48% of managers being female (Yearly

Summary 2016, 2016). In 2017, the number of stores had grown to over 400, and

the number of employees totalled over 183,000. The company estimates that by the

year of 2020, there will be a total of over 500 stores, as well as over 200,000

employees, worldwide (People & Planet Positive 2017, 2017). For Australia in

particular, the first IKEA store opened in Sydney in 1975 (IKEA history - how it all

began, 2017). Today, Australia has eight IKEA stores located across the four states

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of Queensland, New South Wales, Victoria and the Australian Capital Territory (Find

your local IKEA store, 2017).

Since the start of the business in 1958, IKEA continues to place heavy emphasis on

integrating innovation, function, simplicity and sustainability throughout its core

business operations as well as in its external supply chain relations (IKEA history -

how it all began, 2017.). The IKEA concept is built on a threefold model, which

includes “The Vision”, “The Business Idea” and “The Human Resource Idea” (The

IKEA Vision, 2017). This concept illustrated in a triangle-shaped figure with “The

Vision” as the top factor, collaboratively supported by “The Business Idea” and “The

Human Resource Idea”, as crucial base pillars. The company’s main vision is “To

create a better everyday life for the many people” (The IKEA vision, 2017). To break

this statement down and make it more concrete, “The Business Idea” states “We

shall offer a wide range of well-designed, functional home furnishing products at

prices so low that as many people as possible will be able to afford it” (The IKEA

Vision, 2017). This external idea is complemented by its international counterpart

concerning “The Human Resources Idea”, which reads, “To give down-to-earth,

straight-forward people the possibility to grow, both as individuals and in their

professional roles, so that together we are strongly committed to creating a better

everyday life for ourselves and our customers” (The IKEA Vision, 2017).

In addition to the threefold company vision, one of the main pillars of IKEA’s

business operations is the concept of democratic design. This design concept rose

from IKEA’s desire to understand their customer and their everyday needs in their

home, and places physical consumer behaviour patterns at the centre of product

design. By using this form of design when creating all of their products, IKEA aims

to eliminate compromise between the five main parts of democratic design; form,

quality, function, price and sustainability. By including all of these five factors in their

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product design, IKEA aims to integrate physical design with the established

business concept (Yearly Summary 2016, 2016).

3.3 IKEA Australia’s Main Focus Within Sustainability

Core to IKEA’s sustainability efforts globally is their annual report “People & Planet

Positive”. In this report from 2017, Country Manager Jan Gardberg stated that the

People & Planet Positive strategy “[...] ensures that, as a leading global business,

we have clear goals and ambitions to become an even more sustainable

organisation” (People & Planet Positive 2017, 2017, pg. 2). IKEA Australia’s People

& Planet Positive Report from 2017, highlights many of the company’s sustainability

efforts on national and international levels. It states that IKEA is in the process of

planning and designing for a society that lives an urban and often compact lifestyle,

which requires less physical space than these people traditionally have acquired.

The report restates the United Nations’ acknowledgement that 70% of the world’s

population is estimated to live in a city, by the year of 2050, and that the overall

population is likely to rise from 7 to 9.3 billion, to illustrate the crucial need for a

more sustainably-oriented mindset in relation to product design (People & Planet

Positive 2017, 2017). To address the changing demographics, as well as personal

needs of this growing population, IKEA is carefully studying the living patterns of

their consumers through methods such as home visits, and by establishing

innovative research hubs, such as Space10 in Copenhagen, Denmark. These home

visits and research hubs serve to analyse changing consumer living patterns and

test new and innovative solutions to address these in a cost-effective and

sustainable way (People & Planet Positive 2017, 2017). In addition, suppliers play a

crucial role in IKEA’s global sustainability efforts. By adopting a collaborative system

between analysists, designers, technicians, and manufacturers early in the product

development stage, the company is able to change and adapt their products to

maximise their quality and sustainability impact to match the consumer need

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(People & Planet Positive 2017, 2017). Supplier relationships are also closely

monitored under IKEA’s Supplier Code of Conduct, IWAY. Before establishing a

relationship with a potential supplier, IKEA carefully investigates the business to

make sure it complies with the regulations stated in this Code of Conduct. However,

with a dynamic global network of over 600,000 suppliers, careful and consistent

auditing throughout the relationship is a crucial step in maintaining sustainable

business operations (People & Planet Positive 2017, 2017). Since IKEA strives to

uphold long-term relationship with their suppliers, mutual effort to maintain working

according to the Code of Conduct is necessary. In an interview conducted with

Sustainability Developer at IKEA Australia, Preetika Reddy, on November 13th,

2017, Reddy stated that all suppliers are held to the same standards, regardless of

size. If a supplier is not meeting IKEA’s set standards, the company makes effort to

help the supplier change business operations to fulfil the requirements. If this is

impossible, however, the relationship with the supplier is phased out immediately

(Reddy, 2017).

In the report “People & Planet Positive: IKEA Group Sustainability Strategy for 2020”

(2014), IKEA once again stated their commitment to foster various local

communities around the world. Instead of focusing on outsourcing to lower cost of

production, IKEA emphasises building close relationships with small communities

across the world, that are involved in or affected by, its business operations. In

2012, IKEA founded “The IKEA Social Entrepreneurs Initiative”, which “[...] aims to

enable social change by helping social entrepreneurs to improve their business.”

(Behind The Scenes: Social Entrepreneurs (IKEA), 2015). Through this initiative,

IKEA helps to foster social innovation in local communities, to be able to help them

serve the needs of the local population efficiently, while simultaneously access

skilled hand craftsmen and women to produce limited-edition collections for them. In

their report “IKEA Facts: Social Entrepreneurship Partnerships (2015), the company

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reports on multiple partnerships with small-town crafting communities in developing

countries. In India, IKEA is collaborating with Rangsutra, which is an organisation

that employs thousands of local craftsmen and women from the nearby regions and

provides them with a stable employment in exchange for their services. In particular,

IKEA founded one of Rangsutra partners, Swaayam Kala. This initiative involves

around 900 women in the creation of IKEA textile collections and does not only

provide them with employment but makes them direct shareholders of the

organisation. A similar mission is conducted in Thailand, through the organisation

Doi Tung, which over the past two decades has employed over 300 people from the

local community in producing handcraft produces (IKEA Facts: Social

Entrepreneurship Partnerships, 2015). In addition to collaborating with local

organizations to foster social entrepreneurship in underdeveloped communities,

IKEA has set up the initiative “IKEA handmade rugs from India and Bangladesh”,

which over the past six years has improved living conditions for the local population,

as well as produced high-quality collection of rugs for IKEA stores worldwide

(Behind the Scenes: Handmade Rugs, 2015). However, the importance of local

community support is not merely done in developing countries, but also takes place

in the IKEA’s local consumer and producer markets. The “IKEA Living Local

Community Grants” program is developed and run by IKEA Australia across all of its

national stores. The program encourages local non-profit organisations to submit

various proposals for that chance to win up to $8,000 worth of goods, as well as

help from IKEA staff in implementing a new, creative, physical design for the

organisation. Brandon Park Children’s Centre Inc. and Broadmeadows Women’s

Community House in Victoria are examples of two organisations that have received

this grant. These organisations perform work within areas of childcare and support

for women and children escaping abusive relationships, respectively (People &

Planet Positive 2017, 2017).

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Over the years, IKEA has become one of the largest food-selling companies in the

world. Therefore, food has emerged as a natural part of the company’s sustainability

work. Central to IKEA’s operations when it comes to food is that it tastes good,

promotes a nutritionally balanced diet, creates minimal waste and is sustainably

produced (Food you can feel good about, 2017). All food sold at IKEA has

undergone the concept of demographic design, to ensure the highest quality in form

of its function, form, quality, sustainability and low price. The food is inspired by the

Nordic traditions and aims to incorporate as much local produce as possible. When

food or raw products need to be sourced from distant parts of the world, IKEA

requires that they are done so fairly, and with minimal environmental harm. For

example, all the company’s chocolate and coffee are UTZ certified. UTZ enables

farmers across the world to gain necessary skills and knowledge for more

sustainable practices, as well as improve their livelihoods (People & Planet Positive

2017, 2017). IKEA Australia has made a broad commitment to the company’s food

standards. In 2017, the People & Planet Positive report stated that meatballs sold in

IKEA stores across Asia and Australia are locally produced in Queensland. In

addition, the chicken and beef from which the meat is extracted is 100% hormone

free. Another aspect that IKEA Australia has integrated in its practices is the

elimination of food waste. With the goal of 0% of food waste going to landfill, IKEA

Australia is investing heavily in food recycling efforts. The stores in North Lakes and

Logan have each invested around $80,000 in the instalment of food recycling

systems, which “[...] converts food waste into a high-grade fertiliser which is donated

to local schools for use on their gardens and grass areas.” (People & Planet Positive

2017, 2017, p. 37).

3.4 IKEA Australia’s Incorporation of the Concept of Sustainable Materialism

By examining IKEA Australia’s sustainability efforts through the lens of Sustainable

Materialism, it is evident that there are many direct correlations between this

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concept and the company’s practices. A core element of IKEA’s business operations

is a heavy emphasis on democratic design, which through the pillars of quality, form,

sustainability, function and low price, places the basic consumer need at the centre.

The concept of democratic design correlates with interaction design, as discussed

by Mullane (2010). Both of these approaches to product design focuses on

connecting the basic consumer need to longevity, in order to address multiple

consumer needs through one product.

With an estimated population-density increase in cities over the upcoming years,

IKEA’s focus on designing furniture and home appliances that suit a collective and

small-space living situation overlaps with the idea presented by Schlosberg (2013),

that people want to embrace a collective way of living. Studying the changing

consumption patterns as presented by both Schlosberg and Coles (2003) and

Peterson (2017), there is a resemblance between IKEA’s overall integrated

approach of educating their consumers in how they can live a more sustainable and

collaborative lifestyle, not only when it comes to their physical home, but the food

they eat, the energy they consume and the communities which their consumption

habits affect. IKEA is at the forefront of designing for a new era of Sustainable

Materialism, and for a consumer group that are more sustainably aware and

conscious about how they affect their surrounding environment. This is possible,

largely due to their efforts in studying trends and patterns in the way people today

live and consume through home visits and investment in research hubs. According

to the findings by Jackson (2005), this kind of engagement in studying consumer

behaviour is a crucial element of designing for Sustainable Materialism, because it

gives the business the opportunity to truly understand what their consumers value.

The shift from mass-production to an increased emphasis on handcrafted and small-

community production, as well as a shift in the flow of power in supply chain

relationships, is a crucial part of the new Sustainable Materialism movement as

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discussed by Schlosberg and Coles (2003). Through IKEA’s partnerships with

communities in developing countries such as India and Thailand, the company is

integrating skilled handcraft labour in their large supply chain, while at the same

time giving these people access to stable employment and opportunities for an

increased standard of living (IKEA Facts: Social Entrepreneurship Partnerships,

2015). Even though IKEA’s core concept is founded on large-scale production to

keep products affordable too as many customers as possible, the company is using

small-scale community involvement in as many areas of production as is possible

for operations. IKEA Australia, in particular, has taken the concept of community

involvement one step further through their IKEA Living Local Community Grants.

This hands-on approach to community development makes it possible for IKEA

Australia’s consumers to directly see the positive impact that their involvement with

the business has.

The food aspect of the IKEA business can also further be seen from the perspective

of Sustainable Materialism. By adopting a food-philosophy that includes elements

from fair sourcing of health-oriented products to a balanced diet all around, IKEA is

placing large emphasis on locally grown food. This, in turn, encompasses important

parts of the societal shift from mass- to local production as discussed by Schlosberg

and Coles (2003). As people are becoming more aware of what they put into their

bodies and where these products are come from, IKEA is continuously developing

sustainable food, with as much of it as possible being locally produced. IKEA

Australia’s efforts to produce 100% hormone free chicken and beef for the

Australian and Asian market, exemplifies how the company is placing importance on

local production and support of local communities.

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4. CONCLUSION

4.1 Conclusion of the Research Presented

Using the framework of Sustainable Materialism to examine international business

operations provides valuable insight into the increasingly overlapping fields of

business and sustainability. Based on the findings in regards to IKEA Australia in

particular, this report draws three main conclusions regarding the incorporation of

sustainable materials in IKEA Australia’s business operations.

    1. It is possible to combine large-scale production and local handcraft in an

        effective business matter.

    2. There is a crucial need for companies to understand the shifting consumer

        behaviour towards a more sustainably oriented mindset when designing

        physical products.

    3. Companies who want to work closely with sustainability will benefit largely by

        incorporating it as a core concept of their business operations.

Broadly, the study of IKEA Australia in relation to Sustainable Materialism illustrates

a general need for globally integrated companies to emphasise their engagement in

the local communities in which they operate. By structuring operations in a way that

directly links handicraft production in developing countries to sales across the world,

IKEA addresses the growing consumer demand for companies to take their social

responsibility.

4.2 Suggestions for Further Research

This report has laid a broad foundation for investigative research into to correlation

between Sustainable Materialism and companies operating on a global scale. To

take this research further, it would be interesting to study and analyse, how other

companies are integrating Sustainable Materialism in their business operations, and

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how they are doing this in relation to an increasingly complex supply chain. In

addition, further research could be directed to link the concept of Sustainable

Materialism to companies who have not traditionally integrated sustainability as a

core pillar of their operations. A final suggestion would be to study how beneficial

the impact of these companies are on the local communities in which they operate.

To conduct this research as accurately as possible, it should be based on first-hand

information gathered from parties involved, as opposed to research based on

existing studies.

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CONTRIBUTORS

Agnes Broden
Report Author and Lead Project Researcher
George Washington University, Washington DC

Agnes Broden is a Bachelor of Business Administration student at George
Washington University, Washington DC and Former intern for the Sydney
Environment Institute’s Sustainable Materialism research area. Agnes has recently
been selected to serve as the 2019 Vice President of Community Relations of
George Washington University Women in Business, where she will be in charge of
philanthropic, community and diversity efforts within the organization. Agnes will be
undertaking a summer position with Schneider Electric, where she will assist as their
Corporate Social Responsibility intern. Agnes formally worked as the Director of
Philanthropy for George Washington University Women in Business, orchestrating
fundraising and supportive events for female entrepreneurs in the Washington DC
area. In high school, Agnes Co-founded and was CEO of the social enterprise
Willow Wear Young Enterprise (no longer active). The business produced bed wear
out of 100% renewable materials and was named Sweden’s Most Sustainable
Young Enterprise in 2014.

RESEARCH CONTRIBUTORS
Michelle St Anne
Research Design
Deputy Director, Sydney Environment Institute

Anastasia Mortimer
Research Report Editor
Knowledge Translation Officer, Sydney Environment Institute

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