Why Renewables are the Foundation of IKEA and Ingka's Future

Ingka Group’s latest Sustainability Report FY25 shows the IKEA retailer’s ongoing commitment to an energy‑driven transformation, from renewable electricity uptake to decarbonised logistics.

The report outlines how the business is aligning operations with the EU’s Corporate Sustainability Reporting Directive (CSRD) and expanding investments in clean power and circularity.

“When I look at how far we’ve come on our sustainability journey, I feel genuinely proud – and grateful,” says Karen Pflug, Chief Sustainability Officer at Ingka Group.

“In FY25, we made real progress. We scaled circular services that make it easier for customers to live more sustainably. We took bold steps to decarbonise our home deliveries and improve energy efficiency in our own operations.

“We also made new investments in the renewable energy and circularity sectors and expanded our programmes to support equality, diversity and inclusion.”

Energy performance and reporting alignment

FY25 marks the first time Ingka Group has structured its sustainability reporting around ESG pillars, reflecting preparation for the EU’s new disclosure framework.

Nearly 95% of global operations now run on renewable electricity, helping to cut absolute Scope 1 and 2 emissions by 22.3% year‑on‑year.

Decarbonisation was further boosted by a surge in zero‑emission home deliveries, which rose from 41.1% to 60.1%. The company also reduced food waste by 60% compared with FY17, avoiding the equivalent of 9.6 million meals in FY25.

Scope 3 data – largely tied to IKEA’s global supply chain managed by Inter IKEA Group – will be published during FY26 as measurement methodologies mature, underscoring the ongoing complexity of value‑chain decarbonisation.

Behind the investments in renewables

The group achieved a 70.6% absolute reduction in Scope 1 and 2 emissions against FY16, underpinned by renewable power and efficiency measures across stores, warehouses and offices.

Ingka Investments continues to expand its portfolio of wind and solar assets, which already supply around 60% of electricity needs across 28 markets.

At site level, energy efficiency upgrades from LED lighting to optimised heating are cutting operating costs while strengthening energy resilience.

These practical gains are positioning the retailer as a case study in how large-scale commercial energy management can align with net-zero goals.

The challenges in IKEA and Ingka's transition

Despite its progress, Ingka Group still faces a 5.2% gap before achieving 100% renewable electricity use.

Progress on Scope 3 reduction remains dependent on enhanced supply‑chain data, while zero‑emission delivery targets for 2025 are challenged by gaps in charging infrastructure and fleet availability.

As with other global retailers, cutting embodied emissions in materials and production remains a major hurdle, requiring advances in product design, sourcing and customer engagement to reduce the life‑cycle energy footprint.

Integrating water efficiency in operations

Water forms part of IKEA’s “climate, nature and circularity” focus area, particularly in supply chains where extraction and processing have the largest energy and water impacts.

Inter IKEA Group’s FY25 Sustainability Statement calls for stronger resource management standards for suppliers.

Within Ingka’s operations, energy‑linked efficiency measures extend to water use, with optimised dishwashing systems and smarter facilities management complementing existing programmes in waste and energy control. CSRD‑aligned reporting will bring more detailed disclosure of these interrelated resource flows in FY26.

Linking clean energy and nature goals

As Ingka Group builds up its portfolio of renewable assets, land use and biodiversity become increasingly important considerations.

The company is integrating responsible land and resource management into renewable project development to reduce ecosystem impacts while expanding clean power capacity.

This dual focus of accelerating renewable energy while protecting natural systems aligns with the group’s commitment to broader “nature‑positive” outcomes across all of its sites, its procurement and its value chain.

Circular growth and customer engagement

Circularity is doubtless one of the things that has defined the past year at IKEA, with Ingka focusing a great deal on its resale, repair and take‑back services.

The Buyback service in particular sourced around 686,500 used IKEA items, and 424 stores now feature “as‑is” sections promoting reuse.

Ingka also launched a peer‑to‑peer second‑hand IKEA platform in Norway, Portugal and Spain, with Europe‑wide expansion planned.

These initiatives reinforce IKEA’s ambition to connect circular economy services with lower‑carbon product use – linking energy, materials and lifestyle choices.

Governance for an energy‑aligned decade

FY25 marks a governance shift for Ingka Group as it formally aligns reporting structures to ESG pillars and EU standards. Inter IKEA Group’s new CSRD manual standardises sustainability metrics, enhancing oversight of climate- and energy‑related data.

As a foundation‑owned organisation, Ingka can balance financial resilience with long‑term investment in renewables, energy efficiency and social value. Strengthened board‑level accountability now embeds sustainability and energy strategy into business decision‑making across all functions.

"We continue to learn by being open about both our achievements and our gaps," Karen says, looking to the future.

"Going even further requires all of us not only to react to what is in front of us, but to anticipate, innovate and take responsibility to move faster and focus on the actions with the biggest impact."