A year ago, Steve Howard, founder and CEO of The Climate Group, became the chief sustainability officer (CSO) at Ikea, the privately held $32 billion Swedish home-furnishings giant. As Ikea releases its 2011 sustainability report, Steve talks with Heather King about his decision to move into industry, Ikea's push for certified cotton and timber and how to make sustainable products affordable to millions.
Heather King: Why did you leave the nonprofit you founded to join Ikea?
Steve Howard: When I was approached by Ikea, I was already contemplating my next chapter. I had advised more than 50 of the largest businesses in the world. I had good insight into whether or not a company would really make [sustainability] happen. I was on the lookout for an exciting company that was serious about sustainability. The job would have to be the right level in the right enterprise -- not reporting to someone, but rather as part of the executive team.
When I met with Ikea's CEO Mikael Ohlsson, I said: "If you're interested in being incrementally less bad, I'm the wrong guy. If you're interested in transformational, I'm in." Mikael's face lit up.
In addition to seeing real commitment from the top, I recognized Ikea's potential to bring sustainability to the mass market. From product design to a vertical integration that enables deeper supply-chain work to a global retail network, Ikea is positioned to sell sustainable products into millions of homes. That challenge is compelling.
HK: What is Ikea doing on the supply-chain front, especially with two challenging raw materials: cotton and wood?
SH: We are a decade into using IWay, a 'code of conduct' that specifies environmental and social requirements for sourcing and distributing products. This supply-management system has been honed over the past decade; there have been 165,000 improvements since we started. This year, our goal is to secure 100 percent compliance. This gives us confidence that people being are being paid fairly, that water- and air-treatment plants are installed and much more. We have 80 in-house auditors, and we supplement as needed.
In high impact areas such as cotton, we've made a lot of progress. Today, 24 percent of the cotton in Ikea products comes from sustainable sources. We're committed to take it to 100 percent by 2015.