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Climate Pioneers

How Ikea convinces consumers to be green

The giant furniture retailer is using its procurement clout and in-store promotions to nudge millions of customers toward lower-emissions products.

Climate Pioneers - Karen Pflug

Source: Ingka Group/GreenBiz, Julia Vann

Close to 860 million people visited Ikea stores last year, helping it generate more than $50 billion in sales. The world’s largest furniture retailer is using that exposure to drive a unique net-zero goal: a pledge to cut the climate footprint from products Ikea customers use at home by 70 percent by 2030.

So far, Ikea has managed a 52 percent reduction to the baseline it set in 2016, according to Ikea’s sustainability report for 2023.

The retailer calculates that claim by looking at the material composition and energy efficiency of the appliances, lighting and furniture it sells. In FY2023, for example, Ikea sold more than 58.1 billion LED light bulbs. Switching to an updated product improved the portfolio's efficiency by 6 percent, reducing customer energy consumption and emissions in the process. Some stores haven’t carried incandescent alternatives in close to a decade. That reduces consumer power consumption and, by association, their emissions.

Ikea’s early adoption of LED light bulbs is one example of how the retailer guides customers toward product choices that cut their emissions and, by extension, help the retailer deliver on its own climate pledges. Here are five strategies Karen Pflug, chief sustainability officer of Ingka Group, the largest Ikea retail franchisee accounting for 88 percent of its sales, highlights. She leads strategy for close to 400 stores, which hosted 697 million visits in Ikea’s 2023 fiscal year.

Wields its procurement influence

Ikea can nudge consumers toward products with lower emissions by using its scale as a buyer to make sure that greener products don’t require a price premium, said Karen Pflug, chief sustainability officer of Ingka Group, the largest Ikea retail franchisee accounting for 88 percent of its sales. She leads strategy for close to 400 stores, which hosted 697 million visits in Ikea’s 2023 fiscal year.

“There’s many cases where, actually, we can really drive industry-wide change,” Pflug said during the launch episode of GreenBiz’s Climate Pioneers, an interview series showcasing corporate climate innovators. “By having the size and volumes and guaranteed revenue for suppliers, that helps us change the production line.”

Ikea didn’t invent LED lighting for instance, but because it ensured certain volume levels, it changed priorities for suppliers. That’s a strategy Ikea is repeating with other product categories, she said.

“We know that 68 percent of [consumers] are worried about climate change, and they expect big businesses to do something, and governments as well,” Pflug said. “But they also don’t know what to do for themselves. Almost half of them think it’s too expensive. So the biggest delight I have is showing that sustainability can be affordable, as well, and really making them understand their personal agency, that small things can make a difference.”

Incentivizes shifts to plant-based food alternatives

For example, Ikea prices the plant-based alternatives of food it sells — including its well-known meatballs and hotdogs — lower than those sourced from animals. More than 700 million customers bought from Ikea cafes or food markets last year. Ikea’s goal is to switch 50 percent of the “main meals” it offers to plant-based by 2025; so far, it’s at about 38 percent.

In some regions, including very meat-focused countries like Japan and South Korea, Ikea publishes statistics for employees to see adoption, by region, which encourages a spirit of competition, Pflug said. Stores also prioritize local cuisine — in Italy, the “plantballs” are served with pasta, while in Korea they are paired with kimchi rice. “It’s not about making people feel guilty, but making it desirable, tasty and appealing,” Pflug said. 

Features well-price sustainable items in a special section, and throughout the store

Ikea features “sustainable living” products in a special showcase store visitors must walk through to reach in-store cafes. “We really highlight what individual customers can do to change their lives today that won’t cost them extra money and could actually save them money over time,” Pflug said.

The area includes educational displays with data about climate change, recommendations about how to improve energy efficiency, insights about water conservation, and details of the environmental impact of products. Highlights include:

  • Home solar services, including solar panels, installation and (in certain markets, including California), battery storage systems or electric vehicle chargers.
  • Heat pumps (in Sweden to start) that reduce heating and cooling costs, and reduce dependence on imported oil and gas.
  • Portable, solar-powered LED lamps.
  • Meters for reporting on water consumption and temperatures.
  • A showerhead mist nozzle that reduces bathroom water consumption by up to 95 percent.
  • Coming in the future: Ikea product designers are prototyping a system for recycling shower water.

All the products in the showcase are also sold alongside alternatives elsewhere in the store. “They are actually everywhere, so you get a double hit,” Pflug said, adding, “We have seen a higher index of sales when we prioritize those products in the sustainable living section. It doesn’t matter to us where they pick it up from as long as they get to take it home and get the benefits from it.”

Encourages repair, reuse and refurbishment

Ikea store managers are also encouraged to test ways to keep products in homes longer or make it easier for consumers to repair, reuse or pass them on. 

Last year, Ikea said the climate footprint of the “end of life” phase of its products was reduced by 9 percent, compared with 2022. That was achieved by stores offering more generous consumer repair or trade-in policies, and by rethinking design priorities, Pflug said. Examples include:

  • Increased availability of spare parts, including the pegs that hold furniture together or sofa covers to refresh an aging couch. The company sent out more than 24 million replacement items last year.
  • An expansion of a successful buyback program for “old but goodie” items that it started testing in 2021.
  • The increased use of bio-based glue, which makes it easier to disassemble and recover materials from returned furniture.

Listens to employees, and youth

While Pflug’s team steers the strategy for Ingka Group, every local country manager is encouraged to do what’s right for their market: They all carry the chief sustainability officer title. Pflug reports to the chief financial officer of Ingka Group. 

“That’s a deliberate choice, because I think we need finance to be your best friend when you’re looking at what needs to happen [to make] transformational business change with sustainability,” she said.

New ideas also come from an independent, external advisory forum created three years ago, composed of youth activists and professionals from diverse demographic backgrounds, many of them under age 25 — a generation that tends to care deeply about how their consumption habits might affect environmental issues. (The participants were selected by an external agency.) 

These individuals meet regularly with the company’s group management team and supervisory board and last year presented their “hopes, dreams and concerns” to more than 300 senior Ikea leaders during a leadership training session. “They definitely hold us to account,” Pflug said. 

 To watch the entire Climate Pioneers interview with Ingka Group’s Karen Plug, click here. And sign up for the next episode at 1 p.m. Eastern on Tuesday, May 14, exploring Allbirds’ mission to make a shoe with no carbon footprint.

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