IKEA to invest $220 million into becoming 'climate positive'
Retail giant IKEA announced last week a major cash injection into its "climate positive" sustainability strategy, promising to spend a further $220 million on green energy, reforestation and forest protection projects in order to curb the impact of its flatpack furniture business.
By 2030 IKEA wants to remove more greenhouse gases from the atmosphere than it produces through the production and use of its goods — something it describes as a "climate positive" goal.
The investment announced therefore will be focused on two areas — green energy and reforestation.
IKEA said it will invest in projects aimed at removing and storing carbon through reforestation and responsible forest management. It also will work with its direct suppliers to roll out more renewables for heating, cooling and power, targeting 100 percent renewable energy use across its supply chain by 2030.
"Our ambition is to reduce more greenhouse gas emissions in absolute terms by 2030 than the entire IKEA value chain emits, while growing the IKEA business," said Inter IKEA Group CEO Torbjörn Lööf. "To reach this goal, we will continue to invest in areas that create impact. This investment will speed up the transition to using renewable energy across our supply chain and remove carbon from the atmosphere through reforestation and better forest management practices."
More than half of the company's climate footprint comes from materials in its products and production processes, with wood one of the main materials IKEA relies on. Alongside reforestation, IKEA said it will work to support restore degraded land in a bid to curb emissions.
"We believe that the best way to minimize our climate impact and to contribute to limiting climate change to 1.5 degrees Celsius is mainly by reducing our greenhouse gas emissions — but we also need to remove existing carbon from the atmosphere," said Lena Pripp-Kovac, chief sustainability officer at Inter IKEA Group. "We can make a positive difference through our integrated supply chain, our global presence and our forest and climate expertise."
The news comes as IKEA attempts to reshape its business model to fit a "climate positive" mould. Earlier this year it opened its "most sustainable store" in the United Kingdom in London's Greenwich, which features a new "Learning Lab" to teach customers upcycling and repair skills and a rooftop garden. Visitors are encouraged to use public transport to reach the store, and bicycle deliveries are available.
IKEA is hoping its customers will reward its sustainability push with loyalty and in-store spending. But the firm's operating profit fell 10 percent this year to $2.2 billion, according to recent financial results, as the costs of its green transformation weighed on its balance sheet. Since 2009 the firm has invested almost $2.76 billion on green energy, and it is on track to match its energy consumption with renewables output next year.