IKEA’s announcement last week of its bold plans to pursue energy independence by 2020 didn’t happen overnight.
The Swedish home furnishing giant designed its strategy after several years of painstaking data collection, intensive energy audits and energy needs assessments, and an aggressive construction plan already in motion to own and operate solar and wind power systems throughout its global operations.
Unlike Walmart crowing about plans for energy neutrality, IKEA Group was willing to set a timetable after calculating how long executives there believed it would take to reach their goals.
And although there is much transparency in IKEA’s plans for achieving energy neutrality, executives there admit the plan doesn’t extend to the entire company footprint to include its total supply chain.
Indeed, the program began as a value-driven decision to be a corporate leader ahead of the curve in sustainability, according to Steve Howard, IKEA’s chief sustainability officer.
“We really need to tackle global warming,” Howard says. “We want to take a stand for renewable energy, and we can do that most effectively by investing directly in it. Then we can meet our energy needs from our own renewable energy assets.”
Establishing a convincing business case for energy independence gave IKEA’s top brass the confidence to move the project forward, he says. “It’s highly likely that our energy demand will increase and more countries around the world are heading to carbon pricing. If you have your own energy production, you cut off that risk completely.”
IKEA owns the land where its stores are located, and controlling its own future energy supply is in keeping with that ownership philosophy, says Howard. What’s more, IKEA intends to continue growing at a rapid pace. The company expects to double in size by 2020, with plans for stores in India and elsewhere.
The business case was further strengthened after IKEA conducted extensive energy audits at its U.S. operations in 2008 and 2009 with Sieben Energy Associates. Implementing energy efficiency measures to reduce overall power usage was an essential part of IKEA’s strategy for energy neutrality, but audits seeking those savings went way beyond the typical assignments, recalls Craig Sieben, president of the Chicago-based consultancy.
“They had every evaluation include a comprehensive assessment of renewable resources they could use to offset their reliance on the energy grid,” says Sieben. “That’s not typically what companies ask for in an energy audit. Now they’re taking on a stretch goal for the next seven years that’s very ambitious and I think they have a high probability of success based on their history and demonstrated commitment.”
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