The IKEA Group approach to sustainability - How we manage sustainability in our business
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The IKEA Group approach to sustainability How we manage sustainability in our business
Customers 3
IKEA products 3
Customer engagement 6
Environment 7
Climate 7
Forestry 8
Cotton 10
Water 11
Waste 12
Suppliers 12
About this document
The IKEA supplier code of conduct 13
This document describes the overall IKEA approach to environmental
and social responsibility and the systematic work we do in many areas.
Co-Workers 17 For specific news about our progress in 2011, please read the
IKEA Sustainability Report 2011.
Communities 19 Would you like to know more?
You can find more information and download documents on our
website. Please visit “About IKEA/People and the Environment”
References 21 at www.IKEA.com
If you have any questions or comments, please send an e-mail
List of key organisations 21
to sustainability.report.se@IKEA.com
2
ContentsThe IKEA approach We meet our customers in the stores and through the range
IKEA stores offer everything for the home displayed in inspiring room
Customers
to sustainability
settings. In 2011, 665 million customers visited 287 IKEA Group
stores in 26 countries.
The IKEA range comprises some 9,500 home furnishing products.
Materials and products are subject to extensive testing, and we work
How we manage sustainability proactively to stay ahead of health and safety standards and regula-
in our business tions. We want customers to confidently and freely choose among all
our products, knowing that IKEA is committed to sustainable practices
and that they do not have to choose between sustainability, style,
function or price.
Products
A generous return policy and strict follow-up routines
IKEA has a generous return policy, and customers have at least 30
days to bring back purchased products for a full refund regardless of
the reason for the return. Every return and complaint is systematically
documented so that IKEA can analyse reasons for returns and take
action throughout the value chain when needed.
Rigorous safety alarm procedures
Any indication of safety problems with IKEA home furnishing and food
products immediately prompts measures determined by our safety
alarm process to prevent injury and/or health risks.
The process helps us to secure and monitor product safety and
safety standard compliance on all IKEA markets and to initiate correc-
tive and preventive action if needed. All IKEA co-workers have a duty
to report safety-related incidents or risks involving IKEA products. Our
guidelines state that the threshold should be deliberately low for
reporting to minimise the risk of missing an indication that something
is amiss.
Alarms are directed to a central internal team, which monitors the
system continually. In case of severe risk, an immediate sales stop or
recall can be set in motion. Every alarm triggers an investigation,
involving all necessary parts of the IKEA organisation as well as sup-
pliers and authorities when needed. Safety alarms also provide impor-
tant information for product developers and designers in their quest to
develop safe and healthy products.
Every IKEA store and national Service Office has dedicated
resources working with safety alarm procedures, and they receive reg-
ular training.
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CustomersHome furnishing products The IKEA range shall comply with the strictest laws and safety
Proactive risk assessment and extensive testing standards in all our markets, and we have detailed requirements on
IKEA uses proactive risk assessments to ensure product safety by the use of chemicals and other substances in the manufacturing proc-
evaluating, detecting and eliminating potential hazards. Each year, ess. If one country tightens its rules, we introduce these new regula-
thousands of tests are carried out on home furnishing products dur- tions in all IKEA markets where and when possible.
ing IKEA product development, and various tests are conducted con- Examples of such legislation are the EU RoHS directive on hazard-
tinuously during production. ous substances in electrical and electronic components and the REACH
Tests are based on European and international safety and quality legislation on the restriction of chemicals. IKEA participates in formal
standards as well as IKEA unique criteria that look at how customers and informal networks related to REACH. For instance, we monitor the
might assemble and use the products. The IKEA Test Laboratory in updates of The International Chemical Secretariat’s (ChemSec) initia-
Älmhult, Sweden is also a competence centre working closely with tive “Substitute it Now” (SIN), which lists substances that may be
IKEA designers, product developers and technicians during product included in REACH.
development.
Suppliers are required to have product tests conducted at third- The IKEA Sustainability Product Score Card
party laboratories approved by IKEA. We have our own third-party The IKEA Sustainability Product Score Card is an internal tool intro-
accredited test laboratories in Sweden and China, which are comple- duced in 2010 to help classify the IKEA home furnishing range and help
mented by more than 100 external laboratories around the world. us move towards more sustainable product development. It guides us
to improve the product in relation to 11 criteria that have an impact on
Special focus on children’s safety a product’s sustainability profile throughout its life-cycle. By the end of
IKEA pays particular attention to children’s products, which must 2015, 90 percent of the IKEA sales value shall come from home fur-
meet especially high quality and safety requirements. We test IKEA nishing products classified as “more sustainable”.
children’s products to strict national and international safety stand- The Score Card is an internal tool and results will not be communi-
ards and legislation at independent, third-party test laboratories and cated to customers in the form of individual product labels.
institutes around the world. Tests are made before we start produc- For a product and its packaging to be classified as more sustainable,
tion and thereafter on a regular basis. it must score a certain number of points in the IKEA Sustainability
Special risk assessment based on children’s needs is a cornerstone Product Score Card. It is a prerequisite that the product is produced
of our quality work during product development and in the production by suppliers that meet the social and environmental requirements
stage. The purpose is to detect and eliminate potential hazards and in the IKEA supplier code of conduct IWAY.
to ensure the product is safe to use also in ways an adult may not
normally anticipate.
Co-workers across IKEA who work with the Children’s IKEA range IKEA Sustainability Product Score Card criteria
go through regular training in the IKEA Children’s School. Our teach- in brief:
ers are experts in their field and teach about children’s development • More from less (using less material in the product)
and needs with focus on quality, safety and health. An e-learning
• Renewable material
module is followed by classroom activities during one to three days,
• Recycled material
depending on the work role, before a participant is licenced to work
with the IKEA Children’s range. Suppliers of children’s products are • Environmentally better material
also invited to take part on a voluntary basis. • Separable & recyclable material
• Product quality
Using the safest possible chemicals • Transport efficiency (number of products per container)
IKEA aims to refrain from the use of chemicals and substances that • Energy efficient production
could potentially be harmful to people and the environment. We
• Renewable energy in production
strive to always use materials, surface treatments and production
• Raw material utilisation at suppliers
techniques with the lowest possible emissions.
• Product use (less use of energy and water, and less waste
in customers’ homes)
4
CustomersDedicated resources to sustainable product development fied wood from responsibly managed forests. IKEA also purchases
IKEA of Sweden is responsible for developing the range of home fur- Roundtable of Sustainable Palm Oil (RSPO) Certificates to cover the
nishing products. Business areas have dedicated sustainability lead- palm oil volume used by IKEA in order to help stimulate more sustain-
Read more about
ers, supported by a central group of sustainability specialists. They able palm oil production.
Roundtable on Sustain-
are responsible for leading and supporting the sustainability work In the future, we want to focus even more on finding ways to not able Palm Oil at
within product development and supply chain. only decrease the amount of raw materials required for IKEA prod- www.rspo.org
Product developers, technicians and other key internal stakehold- ucts, but also to find alternative materials to avoid the depletion of
ers are invited to take part in training modules on waste, energy and precious resources.
water issues. A separate training program is available on how to use
the IKEA Sustainability Product Score Card. Labelling of IKEA home furnishing products
We label our home furnishing products exclusively with the IKEA logo,
Better energy efficiency, lower water consumption as we want our customers to know that this stands for products that
By the end of 2015, the goal is that our energy consuming products, are safe and produced with respect for people and the environment.
such as lights and white goods, are at least 50 percent more efficient As this applies to the entire IKEA range, we have chosen not to use
than average installed products on the market. Our water consuming any certification labels for home furnishing products.
products, such as taps, dishwashers and washing machines shall be
at least 50 percent more efficient than average installed products on Food products
Read our industry-
the market in 2008. Comparisons for both water and energy con- Safe and healthy food products
specific requirements
sumption are based on estimated averages for the European market. Health is an important parameter when we develop the IKEA food for IKEA food suppliers
range. We try to minimise the use of chemical additives, such as cer- on page 14
Renewable, recyclable and recycled materials tain preservatives, and have prohibited monosodium glutamate (MSG)
By the end of 2015, all product materials shall be renewable, recycla- and AZO dyes.
ble or recycled. The main raw materials used in IKEA products are We have banned all flavour enhancers in IKEA branded food prod-
wood, cotton and glass. The latter is recyclable, while wood and cot- ucts. Also, IKEA does not allow genetically modified organisms (GMO)
ton are renewable and recyclable materials. in IKEA branded products. As it is almost impossible to source GMO-
free food in the United States and Canada, an exception of the ban
Economising on resources – making more from less has been issued for those countries. However, our own packaged
We want as many people as possible to be able to afford IKEA prod- brand products are always GMO-free regardless of where they are
ucts as part of our vision to create a better everyday life. Cost-con- sourced and sold.
sciousness is essential to this idea, inspiring us to make economical IKEA has limits on artificially produced trans fats in the cooking oil,
use of all resources and to seek innovative solutions. This in turn food products and dishes sold and used in our stores. A maximum of
helps us to reduce our overall environmental impact. two percent of the total fat content may be trans fats, which is the
IKEA always strives to use the least possible resources to make smallest quantity that can be measured.
the best possible products – using hollow legs on furniture and chip- Full nutritional information is available on products in the Swedish
board as filling are classic IKEA ways of saving on wood resources, Food Market range to help customers make informed choices.
and we often blend cotton with other materials to reduce cotton use
without any negative impact on the quality. Ensuring restaurant food safety
IKEA is determined to ensure that the food served in our restaurants
Sustainable sourcing of raw materials and sold in our Swedish Food Markets is safe to eat. IKEA has a man-
Read more about our
Raw material extraction can be associated with environmental and datory web-based learning program on food safety for all co-workers
work with forestry on
page 8 social concerns. IKEA wants to support the development of sustaina- working with food in our restaurants, kitchens and stores.
Read more about ble practices for what are often long and complex supply chains. Two annual food safety audits are performed by external parties in
our work with cotton We work actively with our partners to spread better management every IKEA store. The audit includes food handling, cleaning practices,
on page 10 practices in cotton cultivation, and to increase the availability of certi- storage rooms and garbage practices. If deviations from protocol are
5
Customersdetected, the store must immediately set up corrective measures and Encouraging and enabling recycling
undergo a new audit. In addition, independent third-party auditors IKEA wants to make it easy for customers to recycle our products at
conduct compliance and calibration audits to ensure consistent audit the end of their life cycle. Our Sustainability Direction states that IKEA
judgement levels and follow-up procedures. must take responsibility to enable and encourage customers to recy-
cle and reuse products when they are no longer wanted.
All coffee at IKEA is UTZ Certified Today, many stores offer at least some opportunities for customers
Read more about
All coffee sold and served at IKEA is UTZ Certified. That means it has to return and sort waste for recycling. For example, customers can
UTZ Certified at
www.utzcertified.org been produced with care for people and the environment, and that return batteries and compact fluorescent light (CFL) bulbs at most
you can trace the beans all the way back to the plantations through a IKEA stores. IKEA has also started investigating the opportunities for
code on the packaging. UTZ Certified is an independent non-profit full recyclability of different materials used in IKEA products, and how
organisation that sets social and environmental standards for sustain- cyclic systems can save scarce natural resources and minimise CO2
able coffee growing and distribution, and now also cocoa and tea. emissions.
Organic food available in all stores IKEA FAMILY customer club
All stores must offer at least one food dish based on exclusively Read about current
More than 45 million customers in 24 countries are members of IKEA
IKEA FAMILY activities
organic ingredients. In addition, many markets source organic food FAMILY, the customer club that helps us care for and reward our most in your country at
for their national menu in the restaurants. active customers. Several stores run IKEA FAMILY activities aimed at www.IKEA.com
engaging customers to participate in our sustainability work and sup-
Tackling concerns over fishing and animal welfare port a variety of projects in the local community. The “IKEA FAMILY
Read the industry-
IKEA wants to offer quality food products at low prices, while also live magazine” helps us reach six million households around the world
specific requirements
for IKEA Food suppliers on giving our customers peace of mind knowing that we source food with tips and ideas for a more sustainable life at home, as well as in-
page 16 products in a responsible manner. depth features on what we do to take responsibility for people and the
IKEA uses an animal welfare standard for broiler chicken, devel- environment.
Read more about Com- oped together with Compassion in World Farming (CIWF) and sup-
passion In World Farming ports the development and use of globally accepted independent Collecting feedback from customers
at www.ciwf.org.uk standards for other species from the Global Animal Partnership To collect structured feedback from customers, IKEA conducts market
(GAP). research through the “Brand Capital” survey, a tool to monitor and
Read more about We have strict requirements on food products to prevent overfish- improve the implementation of the IKEA concept and to measure cus-
the Global Animal ing and therefore support the international MSC certification sceme. tomer satisfaction in each market. The survey is conducted once a
Partnership at
The herring sold by IKEA comes from responsible fisheries off the year. In addition, we monitor how satisfied customers are with their
www.globalanimal
partnership.org coast of Norway, and all of our salmon suppliers take part in the local IKEA store through the annual “Customer Satisfaction Index”
stakeholder process od Salmon Aquaculture Dialogue standards. (CSI) survey. The survey provides an international benchmark for our
When local restaurant dishes include fish caught in the wild, it must stores, and ensures that customer satisfaction issues are regularly
be ensured that it comes from sustainable fisheries - MSC is a credi- addressed.
ble indicator of this.
Engaging customers through campaigns and activities
Read more about
Customer engagement IKEA customers are encouraged to contribute to positive developments
the IKEA Foundation
Promoting a more sustainable life at home through campaigns and activities run by IKEA and our partners. on page 19
We want to inspire IKEA customers to adopt more sustainable behav- During the holiday season at the end of each year, one euro for
iours in their everyday life and thus reduce their environmental every soft toy sold in IKEA stores worldwide is donated by the IKEA
impact. IKEA aims to identify products and services that we could Foundation. The money is split between Save the Children and
offer to help our customers live a more sustainable life at home and UNICEF projects aimed at improving the education for children in
to create customer awareness of how they can help reduce climate Africa, Asia and Central and Eastern Europe.
impact. The focus is on reducing energy and water consumption, pre- And every time a customer buys a SUNNAN solar lamp, IKEA
venting food waste and minimising other household waste.
6
Customersdonates another one of these solar lamps to a child living in the devel- Round Table (ERRT) to improve energy efficiency and reduce emis-
oping world without easy access to electricity, helping thousands of sions.
children around the world draw, write and read after sunset. IKEA has standards for the most important building components of
stores, and specifies a range of energy efficient measures for new
IKEA buildings. Space and water heating for new-builds come from
Environment We strive to minimise negative impact more sustainable sources whenever possible. This is done using
IKEA strives to minimise negative impact on the environment by ground source heat pumps, air heat pumps, biomass boilers and solar
applying innovative thinking in every step of the long chain, from the panels.
very first idea for a product to when the customer no longer has use Cooperating with suppliers to reduce energy use and emissions
for it. Cost-consciousness is part of our culture, and it inspires us to All IKEA suppliers must have plans in place to reduce the environ-
try to make more from less resources and minimise waste in every mental impacts from their production and operations. They must work
form. to reduce their energy consumption and prevent pollution.
We believe that IKEA has the possibility to contribute to a better IKEA and key suppliers work together in energy projects with the
environment. For example, we can help reduce greenhouse gas emis- goal of reducing consumption and carbon dioxide emissions, while
sions and minimise waste and water consumption in society by offer- also saving costs and increasing competitiveness.
ing products that help our customers live a more sustainable life at
home. Striving for more efficient goods transport
IKEA has strived for innovative and efficient transport solutions for
Climate our products ever since the early 1950s. Effective distribution in the
Reducing emissions throughout the value chain entire goods flow from supplier to customer is an important aspect of
IKEA wants to reduce carbon dioxide emissions from all aspects of achieving a low price, and to minimise the environmental impact from
our operations, including raw material extraction, product manufac- transport.
turing, transportation, energy usage in IKEA buildings, how people IKEA products are purchased both globally and regionally to secure
are transported to our stores, the use of our products in customers’ low prices and high quality while also trying to avoid unnecessary
homes, and finally at the end of a product’s life-cycle. This is a great transport. We use direct deliveries from suppliers to stores to a large
challenge, but IKEA is making progress. extent, and try to minimise goods going into intermediate storage in
distribution centres.
Reducing emissions from our own buildings We choose rail transport where possible, and where this is the
Our long-term goal is that all IKEA buildings shall be powered using more environmentally adapted option. Truck and container loads are
100 percent renewable energy. We also work to improve our overall optimised to maximise fill rates and minimise the number of trans-
energy efficiency. ports, and we work actively with transport service providers to reduce
IKEA defines renewable energy as energy derived from resources their environmental footprint.
that are regenerated naturally or cannot be depleted. IKEA has decided Smart packaging is the most effective way to reduce the environ-
not to pay premium prices for grid electricity from renewable sources. mental impact from goods transport. Already at the drawing table,
This is one of the reasons why IKEA invests in alternative solutions, such designers and product developers include considerations to packaging
as solar panel systems and wind turbines, to supply its buildings with solutions as part of their assignment. Product packaging is optimised
renewable electricity. Investments in more sustainable energy solutions to increase filling rates.
often represent significant cost savings and relatively short pay-back IKEA works to increase the awareness along the value chain. Each
periods. IKEA trading area has a filling rate coordinator, and analysis tools and
Each IKEA market is responsible for reducing carbon dioxide emis- training packages are available for all.
sions from its buildings and for increasing its use of renewable
energy. National management teams are supported by experts and
facilitators, as well as coordinators at each local unit. Many markets
also cooperate with WWF, and with retailers in the European Retail
7
EnvironmentGetting to and from IKEA with more sustainable transportation cific barriers and develop relevant strategies to remove barriers pre-
IKEA wants to help customers and co-workers use more sustainable venting us from proceeding faster to a low carbon supply chain as well
modes of transport to travel to and from IKEA easily. as to develop and run specific actions. We explore what needs to hap-
Public transport solutions are an important consideration when pen at IKEA and what needs to happen externally, for example when
planning new stores and upgrading others, and there are many local it comes to infrastructure and legislation, and develop an innovation
examples of initiatives aimed at promoting sustainable transport for platform on how to improve energy efficiency.
customers and co-workers.
Stores often operate free shuttle buses to and from the city cen- Sustainable life at home
tre, and offer discounted home delivery of IKEA purchases. This project aims at identifying smart products and services that IKEA
IKEA has developed a “toolbox” together with WWF to spread can offer to help our customers live a more sustainable life at home,
ideas and solutions for more environmentally friendly people trans- and at increasing customer and co-worker awareness of how their
port. It contains a checklist of opportunities for promoting sustainable behaviour can help to reduce climate impact.
transport, guidelines for how to work with municipalities and external
partners on improving alternative transportation access to stores, as Climate perspective on food products
well as a model for how to calculate the effect of implemented meas- This project aims at finding ways of adapting the IKEA food range to
ures. be more sustainable, with a special focus on the climate. The initial
goal is to identify short-term greenhouse gas reduction potentials.
Helping co-workers meet and travel with less emissions The next step is to initiate and implement actions to reduce the cli-
There has been a substantial shift from business travel to virtual mate impact from all food-related operations and outline a strategy
meetings via video, web and phone over the past few years. Regular for long-term adaptation of the IKEA food business. A research project
training and information sessions are being held in all locations to has been commissioned, working with independent experts, to iden-
encourage use and make sure participants get the best possible tify a potential food range for 2020 that has a more low carbon, sus-
experience from virtual meetings. tainable focus.
When business travel is needed, IKEA co-workers can make
informed choices of local travel alternatives to and from IKEA units. Closing the loops
When searching for information on the IKEA Intranet on how to get This project investigates the opportunities for full recyclability of differ-
to a specific location, the CO2 footprint for the various alternatives ent materials used in IKEA products, and how cyclic systems can save
such as cars, trains and buses are listed. scarce natural resources and minimise CO2 emissions. It explores how
In close cooperation with our travel agencies, the work to improve to close material loops, with specific focus on recyclable products and
the CO2 reporting and information on air travel is on-going, both on a use of recycled materials in new products. We hope to find new and
corporate and individual trip level. innovative ways to handle materials, and investigate aspects of full
recyclability and how cyclic systems can save natural resources, mini-
Cooperating with WWF on climate change mise CO2 emissions and optimally have a positive impact on the envi-
IKEA has cooperated with WWF to tackle climate change since 2007. ronment.
A majority of carbon dioxide emissions related to IKEA come from
material extraction, suppliers, customer transportation, and the use Forestry
Read our requirements
and disposal of products – areas that IKEA can only indirectly influ- IKEA forestry requirements for wood used in IKEA
ence. This is why we have several climate-related projects that aim All IKEA solid wood and board product suppliers must live up to the IKEA products on page 10
to increase our ability to positively influence suppliers, customers, supplier code of conduct IWAY as well as our forestry requirements.
policy makers and others, while also developing our range to become Forest management in our wood sourcing areas must not threaten
more energy efficient. Below is a summary of our current joint cli- high conservation values. In sensitive areas we require forest manag-
mate projects with WWF. ers to have a certified management plan that respects conservation
values. IKEA suppliers are required to document the origin of their
Energy use at suppliers wood.
This project focuses on Poland and China. The aim is to identify spe- Suppliers must deliver a wood procurement plan and demonstrate
8
Environmentthat they have systems to ensure that IKEA minimum requirements ning of our wood supply chain audits. Suppliers are contractually
are met before they are allowed to start delivering to IKEA. Our for- obliged to report their wood sources within 48 hours upon request.
estry specialists assess the wood procurement plan and the evidence IKEA focuses its approach and resources for supplier monitoring
provided. Compliance with the requirements is followed up through and wood supply chain audits on high-risk suppliers and high-risk
regular audits and reporting. areas. This means that IKEA suppliers sourcing wood certified by
acknowledged forest certification schemes, such as FSC, are mainly
A strategic approach to forestry challenges monitored through independent auditors. Our own audit resources
Wood is a valuable resource, and resource efficiency is of great focus on suppliers that are not yet forest management or chain-of-
importance not only from an environmental point of view but also custody certified, e.g. suppliers operating in areas associated with
from a cost perspective. We are constantly searching for new tech- risks of unacceptable forest management practises, including illegal
niques to get the best possible return from every tree trunk. logging, and suppliers that have failed earlier audits.
We source wood also from regions that are troubled by illegal logging In addition, third-party auditors, such as NEPCon, conduct wood sup-
and other unsustainable forestry practises. Our suppliers in these areas ply chain audits for IKEA. Wood supply chain audits by IKEA or third-
struggle with low availability of certified wood volumes and traceability in party auditors are based on risk assessments using supplier data on
complex supply chains. To be able to operate in these regions, it is part of wood origin. Any indication that unwanted wood could be entering the
our global sourcing approach to have systems in place to avoid controver- IKEA supply chain triggers a stop of deliveries and an audit.
sial wood entering the supply chain, and we cooperate with forest manag- As Swedwood is an industrial group owned by IKEA, audits in its
ers and NGOs to increase the availability of wood from responsibly man- supply chain are always conducted by third-party auditors to avoid
aged forests. We believe we best contribute to lasting positive change by conflicts of interest.
conducting responsible business and actively supporting certification
development in countries such as China and Russia. Welcoming legislation against handling of illegally
Our long-term goal is that all wood used in IKEA products should logged wood
be recycled or come from forests verified as responsibly managed, More and more governments are legislating against the handling and
according to a system recognised by IKEA. Today, Forest Stewardship illegal trading of illegally logged wood – the US, EU, Switzerland and
Council (FSC), including Forest Management (FM) and Chain of Cus- Australia have already implemented or are developing legislations. We
tody (CoC) standards, is the only certification scheme recognised by anticipate that more than 80 percent of IKEA retail markets will be
IKEA as a “preferred source”. covered by these legislations by 2013.
The Wood Supply function of IKEA works to support selected wood IKEA welcomes this development. We also believe we can and will
suppliers in developing efficient and sustainable supply strategies. It contribute valuable input on how to design efficient control systems
aims to secure future price reductions and access to competitive as, for more than a decade, we have had systems in place to ensure
wood raw material. the legality of the wood we use for more than a decade. We are mem-
bers of the Timber Retail Coalition in the EU and the Forest Legality
IKEA forestry specialists Alliance in the US. In Australia, IKEA and Greenpeace were two of the
IKEA forestry specialists spread knowledge about responsible forestry signatories of the Common Platform, requesting the Australian gov-
in the wood supply chain. They support our trading service offices ernment to legislate against illegal logging.
with wood supply chain audits, when they trace the supply of wood
all the way back to the forest to verify that IKEA requirements are Special focus on logging in Russia and China
met. The forestry specialist also help suppliers to improve the sus- IKEA is engaged in a number of projects together with WWF to address
tainability of their sourcing by mapping availability of certified wood the challenges of illegal logging and unsustainable forest management
and advising on how to secure IKEA requirements. in Russia and China, which are two of our most important wood sourc-
ing countries. We have also chosen to concentrate most of our own
Monitoring focused on high-risk supply resources here by dedicating two-thirds of our forestry specialists to
IKEA suppliers must be able to report the origin of their wood every the area. Some of these specialists focus entirely on cross-border trade
four months, which forms the basis for the risk assessment and plan- as approximately one-third of the wood IKEA suppliers source in Russia
is processed in China.
9
EnvironmentIKEA conducts seminars and training sessions in Russia and China • Not from forestry operations engaged in forest-related social conflicts
together with representatives from forestry companies and authorities • Not harvested in Intact Natural Forests (INF) or other geographi-
such as customs. IKEA also encourages suppliers to participate in the cally identified High Conservation Value Forests (HCVF), unless they
WWF initiative Global Forest & Trade Network (GFTN) to strengthen are certified as responsibly managed
their commitment to eliminate illegal logging and promoting responsi- • Not harvested from natural forests in the tropical and sub-tropical
ble forestry. In China, IKEA works with the Rainforest Alliance Trees regions being converted to plantations or non-forest use
Programme, WWF China and the Chinese Academy of Forestry, in addi-
• Not from officially recognised and geographically identified commer-
tion to the Forest Stewardship Council (FSC), to improve the standards
cial Genetically Modified (GM) tree plantations
of forest management and availability of certified wood.
Suppliers must have procedures in place to secure this throughout their
supply chain. They must know the origin of their wood and accept
Outdoor furniture and acacia
audits at every link in the chain. They regularly report the wood origin,
IKEA outdoor furniture represents about six percent of the wood used
volume and species used in IKEA products via the IKEA Forest Tracing
for our home furnishing offer. IKEA does not use wood from high
System.
value tropical tree species, e.g. teak or mahogany. Most of our out-
door furniture is made of acacia, which is sturdy and hardwearing.
2. CRITERIA FOR IKEA PREFERRED WOOD SOURCES*
Acacia is mostly grown in plantations to produce wood for the pulp
Wood certified according to Forest Stewardship Council (FSC) Forest
and paper industry. IKEA sources acacia from plantations in Indone-
Management (FM) and Chain of Custody (CoC) standards meets the
sia, Vietnam and Malaysia.
IKEA requirements for preferred sources. In order to count towards
The acacia used for IKEA products must comply with our minimum
the preferred wood objective, suppliers must have a valid FSC CoC,
forestry requirements, including that the origin must be known and it
covering in its scope the production for IKEA.
must comply with all legal requirements. Our long-term goal is to
*As of 2012, the definition of preferred wood sources will also include recycled wood.
source all wood in the outdoor furniture range from forests that are
independently verified by a third party as responsibly managed.
Cotton
IKEA supports more sustainable cotton farming
Cooperating with WWF
Read more about the joint IKEA has set out to create lasting and large-scale improvements in
projects with WWF at
IKEA cooperates with WWF to support responsible forest manage-
conventional cotton cultivation together with parties including other
www.panda.org ment, and to increase the availability of certified wood. For example,
international companies, NGOs, governments and authorities. We
we have joint WWF projects that aim to ensure responsible forest
want to take part in making more sustainable cotton a globally availa-
Read more about management practices and to curb illegal logging in the cross-border
ble commodity.
the GFTN at trade between China and Russia, as well as a number of projects in
IKEA cooperates with WWF and other local partners to influence
www.gftn.panda.org Bulgaria, Bosnia-Herzegovina, Cambodia, Indonesia, Laos, Lithuania,
mainstream farmers to grow cotton in a more sustainable way – mainly
Romania, Ukraine and Vietnam.
in India and Pakistan but also in China and Turkey. It started as Farmer
IKEA is also a participant in the Global Forest & Trade Network
Field Schools with 20 weeks of training for 450 farmers in 2005. Today,
(GFTN). The GFTN is a WWF initiative to eliminate illegal logging and
IKEA supported projects reach an estimated 100,000 farmers.
drive improvements in forest management. Participants are commit-
The projects are based on hands-on training in the field, which
ted to promoting responsible forestry and credible certification.
allows farmers themselves to see and experience the benefits of chang-
Requirements for wood used in IKEA products ing the way they grow cotton. Successful farmers act as an inspiration
The IKEA Forestry Standard is a material-specific supplement to the to others, and better farming practices are being spread from farmer to
IKEA supplier code of conduct IWAY. It contains basic requirements farmer. As farmers start using less chemical pesticides and fertilisers,
for IKEA wood product suppliers. and less water, their environmental impact is reduced while cotton crop
yields are maintained at a lower cost and farmers’ earnings increase.
1. Minimum criteria on wood for IKEA products An increase in sustainable farming practices leads to significant
• Not from forests that have been illegally harvested improvements in mainstream cotton farming and drastically increases
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Environmentavailable volumes of cotton grown in a more sustainable manner. We quality. In return, the suppliers must commit to buying more sustain-
are increasing the share of this more sustainable cotton across the able cotton as it becomes available.
range, and the goal is that all cotton used for IKEA products shall be
produced according to the Better Cotton Initiative’s (BCI) social and Functional traceability systems
Read more about the
environmental criteria by the end of 2015. Tracing the cotton used in IKEA products all the way back to farm-level
Better Cotton Initiative
is an important part of securing more sustainable cotton products. at www.bettercotton.org
Part of the Better Cotton Initiative (BCI) Today, IKEA uses a web-based traceability system initially introduced to
IKEA is one of the founding members of the Better Cotton Initiative be used in connection with our cotton projects in India and Pakistan.
(BCI). This global multi-stakeholder organisation aims to make global This system is being implemented throughout the IKEA cotton supply
cotton production better for the people who produce it, better for the chain, but IKEA is also searching for alternative, innovative solutions
environment it grows in and better for the sector’s future. Leading that may be better suited for large-scale tracing.
participants are international companies and NGOs, as well as an
increasing number of ginners and textile producers. Reducing our need for cotton
BCI has developed criteria for Better Cotton. Criteria cover envi- At the same time as IKEA works to use more sustainable cotton, we
ronmental aspects, such as the use of chemicals and water, as well as also try to reduce our reliance on cotton as a raw material for our
social aspects relating to child labour, working conditions and wages. products.
Once these criteria have been fully evaluated, set and introduced, One way to reduce the need for cotton is to use blends, such as cot-
BCI will take on responsibility for verifying compliance at farm level ton and linen. Alternative materials play an important role, too. For
within our supply chain. example, Lyocell made from cellulose fibres is already used in a number
IKEA, BCI, the Rabobank Foundation, the Dutch Sustainable Trade of IKEA products that require similar characteristics as cotton. IKEA
Read more about
Initiative (IDH), WWF, Solidaridad and a number of international expects the range of Lyocell textile products to increase substantially in
Solidaridad at
www.solidaridad retailers have a joint strategy to speed up the implementation of Bet- coming years, contributing to a decreased use of cotton.
network.org ter Cotton as a tradable commodity. To support this strategy, the Bet- In addition, IKEA suppliers are adapting production to meet new
ter Cotton Fast Track Program (BCFTP) and its related fund have been quality standards that reduce the amount of cotton needed and the
established with the aim of reaching a production of one million weight of textiles, while the overall textile quality is enhanced.
tonnes of Better Cotton by 2015.
Water
Addressing children’s rights in Pakistan and India Reducing water consumption at IKEA
Read more about the
We believe that children everywhere have the right to be protected All IKEA stores and distribution centres measure their water use, and
IKEA Foundation on
page 19 from exploitation, abuse and neglect. All children should have access several stores have implemented various measures to reduce con-
to quality education, and child labour is unacceptable. The IKEA sumption. For instance, new stores may install waterless urinals and
Foundation has identified cotton and cotton-seed farming as areas existing stores can be retrofitted with grey water systems so that roof
where there is a great need to improve the rights and lives of chil- run-off water can be used for toilet flushing.
dren. Between 2009 and 2015, around 10 million children in more
than 15,000 villages in cotton and cotton-seed growing areas in India Design to minimise water use in manufacturing
and Pakistan will benefit from the programmes supported by the IKEA Product design can, to some extent, determine the amount of water
Foundation and managed by UNICEF and Save the Children. The aim needed in manufacturing, and IKEA uses a number of techniques that
is to create child-friendly communities, where the idea of every child reduce consumption. A printing technique called Soft Pigment Printing
attending and staying in school is fully-embraced and encouraged by (SPP) reduces the water consumption by 60 percent compared to tra-
society. ditional printing techniques while also giving the textile a soft feel and
excellent light-fastness. Today, a large portion of our printed textile
Connecting suppliers to more sustainable cotton products are produced with techniques that require less water.
We support IKEA suppliers working with cotton textiles to connect
with suitable raw material sources. IKEA has also facilitated access to Water treatment and water use at IKEA suppliers
a number of new cotton sources to enable suppliers to blend the right The IKEA supplier code of conduct IWAY includes requirements on
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Environmentwater treatment. IKEA supports suppliers to implement waste water age to products. However, when damage does occur, IKEA attempts to
treatment processes to ensure water quality in suppliers’ local com- repair products rather than simply discard them. The results of efforts
munities, and selected suppliers are eligible to take part in a Supplier made in the stores are measured in the Recovery Index.
Development Program to improve water practices.
All IKEA home furnishing suppliers must have action plans on how Waste management at IKEA suppliers
to reduce their environmental impact, and IKEA supports suppliers in IKEA wants to minimise the amount of waste generated in the manu-
regions with scarce water resources. All IKEA Catalogue suppliers are facturing process, and if possible use it in the production of other
required to monitor and report water consumption as well as emis- home furnishing products. Our designers, product developers and
sions to wastewater, and IKEA calculates and reports this data per technicians get great ideas by spending time in the factories and talk-
Catalogue copy. ing to suppliers.
Waste from production can still come to good use even if it is not
Sustainable water practices in cotton farming suited for home furnishing products. For example, the production
Read more about how
The biggest water footprint in the IKEA value chain comes from raw units at Swedwood and Swedspan often use their own wood waste to
IKEA works with
cotton on page 10 material extraction. Cotton farming is particularly water intensive if produce energy instead of relying on oil and gas.
appropriate irrigation methods are not used, and this is one of the IKEA products must be safe to use, but IKEA suppliers sometimes
reasons why we support projects for more sustainable cotton farm- need to use production methods that generate hazardous waste. This is
ing. Participating farmers’ water consumption has been significantly why our supplier code of conduct IWAY requires suppliers to handle,
reduced through the introduction of better management practices, store and dispose of any such waste in an environmentally safe man-
and project results show that the water consumption can often be ner, and that workers must have the appropriate competence and pro-
halved. tection.
Helping customers save water at home Products and solutions to help customers minimise waste
Read more about how
We develop the IKEA range to help IKEA customers live a more sus- IKEA wants to develop products and solutions that enable customers
we cooperate with WWF
tainable life at home by reducing their energy and water consump- to conveniently sort and reduce household waste volumes, and our on climate change on
tion. IKEA taps are fitted with a Pressure Compensating Aerator product developers receive special training on household waste issues. page 22
(PCA) that can reduce water use by 30 percent or more by limiting IKEA has a climate-related project focused on reducing energy and
the water pressure and adding air to the water flow. Furthermore, we water consumption when using IKEA products, preventing unneces-
are constantly looking for other innovative techniques to support sary food waste and minimising other household waste.
reduced household water usage. Turning waste into resources and minimising its environmental
impact are serious challenges to society as a whole, and we want to
Waste make it easy for customers to recycle our products at the end of their
Minimising waste at IKEA stores and distribution centres life-cycle. This is why we also have a project investigating the opportu-
All IKEA stores and distribution centres recycle large quantities of nities for full recyclability of different materials used in IKEA products,
material. The “Waste Management Manual“ for the IKEA group was and how cyclic systems can save scarce natural resources and minimise
first established in 1999. The manual requires all stores to, at a mini- CO2 emissions.
mum, sort the most common waste categories; cardboard, paper,
plastic, wood, metal and glass.
In some stores, as many as 15 categories of waste are sorted. In IKEA suppliers and their workers SUPPLIERS
practice, this ensures that nearly 90 percent of waste in IKEA stores IKEA suppliers and service providers cover a wide range of products
is recycled or used for energy production. At some newer stores, food and services required for global operations. In addition to the suppli-
waste from restaurants, bistros and staff canteens goes to a special ers of home furnishing products in the IKEA range, food product sup-
treatment centre, where it gets reused as biogas fuel for cars and pliers, goods transport service providers and companies provide IKEA
buses. In addition, a number of countries sort food waste for com- with indirect services and materials. In turn, most of these have a
posting and animal feed. number of sub-suppliers.
IKEA stores and distribution centres also work to minimise dam- IKEA is a production-oriented company. Many ideas for design and
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Environment
Suppliersproduct development are born on the factory floor when IKEA co-work- suppliers here secure a maximum 60-hour total work week by the end
ers are on-site. This close relationship also opens up possibilities for of 2012 as a step-wise approach to achieving the legal limit of 40
frank and honest dialogue about topics related to environmental and working hours per week plus a maximum of 36 overtime hours per
social issues. We cooperate with suppliers to spread best practices in month and three per day.
various areas to increase their ability to take on more social and envi- In China and Vietnam, legal restrictions regarding freedom of asso-
ronmental responsibility. For a supplier, investments in working condi- ciation prevent suppliers from meeting some IWAY requirements. In
tions and the environment often lead to more orders, better productiv- both of these cases we have given an exception to these questions in
ity and improved profitability, thereby improving competitiveness. order to work with suppliers to solve issues that are complex and not
always fully under their own control.
Close and long-term relationships support development In IWAY, we focus on building the suppliers’ understanding of what
The supply chain is often long with numerous sub-suppliers, and they need to comply with so that they can implement the most suita-
many IKEA home furnishing suppliers operate in developing countries ble measures more independently. IKEA suppliers are responsible for
facing social and environmental challenges. We believe IKEA contrib- communicating the content of the IKEA supplier code of conduct to
utes to positive developments in the supply chain by being on-site their workers and sub-suppliers.
and conducting responsible business, and by cooperating with others New suppliers are selected based on a list of IWAY start-up require-
– our suppliers, other companies, authorities and NGOs. ments. This helps us select suppliers that share our values and who
IKEA strives to build long-term relationships with suppliers who want to grow and develop together with us. Suppliers must comply with
share our values and want to grow and develop together with IKEA. the start-up requirements before being allowed to deliver to IKEA, while
Our focus is to motivate and support suppliers to take more responsi- being given a maximum implementation time of 12 months from the
bility and ownership themselves, so that developments become sus- first delivery date for other IWAY requirements.
tainable and independent of IKEA presence. An important part of IWAY is the section about child labour. There
Prioritised home furnishing suppliers with particular potential to are also several sector-specific supplements to IWAY, for example for
improve within a specific area are offered support through a Supplier our transport service providers.
Development Program (SDP) for a certain period of time. Support can
be provided within six main categories: sustainability, purchasing IWAY support and monitoring
(including raw materials), logistics, manufacturing, quality and prod- IKEA co-workers from our local and regional IKEA Trading Service
uct development. SDP Sustainability focuses on two sub-categories: Offices are often on-site at suppliers’ factories to support and moti-
energy and water. Forestry issues and several other environmental vate suppliers to implement and maintain IWAY requirements. Their
aspects of suppliers’ activities, such as raw material utilisation, are active presence contributes to suppliers’ development.
sub-categories covered by other SDP categories. IKEA auditors regularly visit suppliers to ensure that IWAY criteria
are met. These visits can be both announced and unannounced. Over
The supplier code of conduct IWAY the last few years, the number of unannounced audits has increased
Read the requirements
IWAY is the IKEA supplier code of conduct, first introduced in 2000. It substantially. This gives us an accurate picture of suppliers’ factories
in the IKEA supplier
code of conduct on specifies the requirements that we place on suppliers of products and and helps us focus support to specific areas of non-compliance.
page 15 services. Our goal is that all home furnishing suppliers and transport Each home furnishing supplier is audited at least every second
service providers shall comply with the requirements in IWAY by the end year, and more frequently in some countries based on risk assess-
of 2012. ment. IKEA auditors help with action plans when there is non-compli-
To achieve full IWAY compliance by 2012 among suppliers in some ance, and they conduct follow-up visits to review progress.
Asian countries, we face challenges relating particularly to working There are clear mandatory directions for how to conduct audits,
hours. Although we have made progress, working hours continue to what the consequences are in case of non-compliance, how to follow
be above legal requirements and international norms in some up, etc. Non-compliance with the IWAY start-up requirements leads to
regions. In China, there is a wide gap between the legislated working immediate stop of deliveries, while suppliers have up to 90 days to
hours and the 80 hours per week that are common in regions with a implement corrective actions in case of non-compliance with other
high share of migrant workers. As an interim step, we will accept that requirements. Once non-compliance with start-up requirements is
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Suppliersresolved, suppliers are still on probation for six months with intensi- than we could on our own, not least when it comes to challenging
fied monitoring. Non-compliance data are followed up on a monthly areas and topics that are not unique for IKEA. For example, in South
basis. Asia, we collaborate with other retailers to support positive develop-
The IKEA Compliance and Monitoring group (CMG) is responsible ments related to wages and compensation, as well as code of conduct
for ensuring that the same audit judgement level and follow-up proce- implementation at sub-suppliers.
dures are used worldwide. This is done through separate calibration IKEA is a member of the Global Social Compliance Programme
activities and training as well as compliance audits to verify results. (GSCP), an industry-initiated programme working towards a sustainable
Read more about
Together these ensure a common audit and implementation standard. approach for the improvement of working and environmental conditions
Global Social Compli-
ance Programme at Third-party auditors verify IKEA working methods and audit in global supply chains. GSCP provides a platform for companies to build
www.gscpnet.com results. These third-party auditors also conduct audits at IKEA suppli- consensus on best practices and to work in partnership with suppliers on
ers, including unannounced random checks of suppliers and their the continuous improvement of working and environmental conditions
sub-contractors with special emphasis on child labour. through training and capacity building activities.
Suppliers responsible for IWAY at sub-suppliers IKEA transport service providers
A sub-supplier is defined as a company supplying services, raw mate- IKEA products are transported by road, rail and sea between suppli-
rial, components, and/or production capacity to an IKEA supplier. It is ers, distribution centres and IKEA stores, and from the stores to our
the responsibility of the IKEA suppliers to ensure that their sub-sup- customers. Our long-haul ocean and land transport service providers
pliers acknowledge, understand and accept the IWAY requirements. have been covered by the supplier code of conduct IWAY since 2005.
The IKEA supply chain is often long, and ensuring IWAY compliance In 2010, the scope was expanded to include customer delivery carri-
at many thousands of sub-suppliers represents a major challenge. Yet, ers that transport products from our customer distribution centres
IKEA is making progress and new global guidelines on how to better (CDC) directly to IKEA customers.
secure the requirements at sub-suppliers were introduced in 2010. The IKEA audits its transport service providers at least every 24 months
Read the industry-
work with sub-suppliers is primarily focused on compliance with the to monitor IWAY compliance, including the transport industry-specific
specific requirements for
IWAY start-up requirements among those sub-suppliers that are cate- requirements. IKEA transport social and environmental developers IKEA transport service
gorised as critical. engage in dialogue with transport service providers on a regular basis providers on page 16
IKEA initiates wood supply chain audits at sub-suppliers of wood raw to support best-practice exchanges between suppliers and to make
material for IKEA products. For other types of sub-suppliers outside of sure transport service providers conduct their own internal audits
suppliers’ premises, we conduct a limited number of IWAY audits. These annually.
audits primarily target sub-suppliers who produce a key part of an IKEA
product and those who use processes recognised as potentially harmful IKEA food suppliers
Read the industry-
to the environment or to the health or safety of workers. Audits also tar- Food for the IKEA restaurants is purchased from both global and
specific requirements for
get sub-suppliers operating in an industry or supply setup that is prone national suppliers. The global range, bought from 90 suppliers, is the IKEA Food suppliers on
to child labour and/or forced and bonded labour. same in all IKEA stores worldwide. The IKEA branded food products page 16
sold in the Swedish Food Market in-store are produced by some 40
Collecting feedback from suppliers suppliers. Each retail country also purchases food for part of its res-
Every three years, IKEA conducts a supplier survey to collect feed- taurant menu from a number of suppliers.
back on our relationship. The feedback is given anonymously to In addition to the requirements in IWAY, IKEA food suppliers must
encourage frank and open input. We ask questions about, for fulfil a number of industry-specific requirements. Global food suppliers’
instance, if IKEA is sensitive to suppliers’ opinions, if discussions are compliance of IWAY requirements is monitored by IKEA auditors, and
respectful, and if IKEA handles complaints in a satisfactory manner. If audits are step-by-step being introduced also at national food suppliers.
the feedback indicates a need for improvement, an action plan is Our global food suppliers must have an approved food safety man-
developed for the area concerned. agement certification, such as the BRC Global Standard for Food
Safety, and provide relevant documentation to prove this. National
Collaborations help us improve our supply chain food suppliers must have a Hazard Analysis Critical Control Point
IKEA believes that cooperation with others helps us achieve more (HACCP) system in place, and provide documentation upon request.
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