IKEA Reports Great 2013 Sustainability Progress

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Solar panels roof many IKEA stores.

We figured IKEA might be on the right track when we first saw its blue and yellow buildings adorned with solar rooftops. It turns out that the second-largest private commercial solar owner/user in the United States (and the largest per square meter of rooftop space) is on schedule with its ambitious sustainability strategy unveiled a little over a year ago, “People & Planet Positive.”

The program dedicates over $2 billion–three times as much as originally planned–to clean energy investment through 2015. It’s designed to protect the company from price shocks related to energy and other costs and to tap into customers’ desire for a greener lifestyle.

On the program’s first anniversary, IKEA has released a 2013 Group Sustainability Report (FY 2013, covering the period between 9/1/2012 to 8/31/2013). As reported in Forbes, 34% of IKEA’s energy came from renewable sources last year. The company’s goals state:

“We want to have a positive impact on the environment, which is why by 2020 we’re going to be 100% renewable–producing as much renewable energy as we consume using renewable sources, such as the wind and sun. We’re also making our buildings more efficient, so we need less energy to run them.”

The world-class Swedish retailer of well-designed, functional home furnishing products, at prices low enough for most customers to afford them, has been in business for over 60 years. Almost half (47%) of its managers are women, compared to 17% on the American Fortune 500‘s boards. In FY 13, the IKEA Group had 135,000 co-workers, 684 million visitors to the stores, and 1.3 billion website visitors.

“Our mission has always been to give people with thin wallets a chance to furnish their homes in a beautiful and functional way. We call it “democratic design,” the 2012 sustainability report says.

IKEA’s 2013 analysis reveals the company’s overall progress in working with sustainability. Steve Howard, chief sustainability officer, leads these sweeping efforts at IKEA. Some details from the report:

• Since FY 2010, the company’s energy efficiency efforts in stores and warehouses have saved $54 million.

• 90% of IKEA’s locations in the US now use photovoltaic power. IKEA has also committed to own 137 wind turbines and has begun installing geothermal power at several locations as well. It now owns wind farms in six countries, has committed to provide electric vehicle chargers at all its 18 locations in the United Kingdom by January 2014, and will roll out home solar PV systems for sale there during the first months of this year.

• Following the company’s commitment to sell and use only LED lights in its products, IKEA has sold 12.3 million LED light bulbs and 12.1 other products that use LED technology. With this development, IKEA has saved each customer $9.45 in electricity costs per bulb, per year, compared with incandescent bulbs. In aggregate, lighting customers will save a combined total of $116.1 million per year from the company’s LED bulbs.

• Because furniture is one of IKEA’s signature products, the company is one of the world’s largest buyers of wood in the world. However, leading environmental organizations criticized the company in 2012 for its wholly owned subsidiary Swedwood logging and clear-cutting old-growth Russian forests with high conservation value. These boreal forests bind huge amounts of carbon dioxide and shelter many thousands of unique animal and plant species. IKEA’s new report says that almost 1/3 of IKEA’s wood in last year was either Forest Stewardship Council-certified or recycled–a start, at least.

• The share of cotton from sustainable sources that IKEA used in products last year more than doubled, increasing from 34% (FY12) to 72% (FY13).

“Everyone, including IKEA, has a part to play in tackling the expected shortages of resources and the impacts of climate change while providing people with a good quality of life. With our vision of creating ‘a better everyday life for the many people,’ I am convinced there is no other way of doing business than in a sustainable way,” said Peter Agnefjäll, President and CEO, IKEA Group.

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