How IKEA's Renewable Energy Influences its Sustainability
Ingka Group CEO Jesper Brodin says its annual report proves that the “business case for investing in climate action works”.
Ingka, the largest IKEA retailer, reports a substantial decrease in its climate footprint, 30.1% compared with 2016, all while escalating their business operations.
The report says the company “prioritised investing across the business as part of its ongoing transformation to make IKEA even more accessible, affordable and sustainable”.
Jesper adds: “In challenging times, we decided to invest €2.1bn (US$2.2bn) into lowering the prices on thousands of products to support many more people to fulfil their dreams and needs in life at home, no matter the size of the wallet.
“At the same time, we took important steps in strengthening our science-based climate targets, remaining deeply committed to the Paris Agreement.
“This is the most important decade and by additionally reducing our climate footprint while growing the business, we prove that the business case for investing in climate action works.”
Investing in a sustainable future
Karen Pflug, Chief Sustainability Officer at Ingka Group, says: “By radically collaborating across industries and communities, I am confident we will reach our goals.”
Karen delights in the progress towards the updated targets endorsed by the Science Based Targets initiative (SBTi) but acknowledges ongoing hurdles.
She adds: “But challenges remain, as we continue to integrate sustainability across our business and take action on the complex challenges facing the world – from climate to rising inequality.”
As well as this, she underscores Ingka's commitment towards supporting refugees and asylum seekers via the Skills for Employment programme, aiming to aid an additional 3,000 individuals by the end of 2027.
Karen continues: “We firmly believe sustainability and affordability must go hand-in-hand, so during this year we launched our Sustainable Living Shops online and continued to scale up our circular services by piloting IKEA Preowned, our new peer-to-peer second-hand marketplace, to enable customers to buy and sell used IKEA furniture at even lower prices.
“We will continue to innovate and lead by example on our journey, and we don’t under-estimate the challenges the world is facing, but we are determined to use our size and reach to play a leading role.”
IKEA's energy highlights
Ingka has demonstrated remarkable growth, achieving a 23.7% revenue increase compared to its 2016 baseline.
Notably, renewable energy now powers 96.6% of operations across 28 distinct national markets.
The company has made significant strides in sustainable logistics, with 41.1% of customer home deliveries now executed through zero emission vehicle technologies.
Aligned with its long-term sustainability commitment of €7.5bn (US$7.8bn) by 2030, the organisation has strategically allocated an incremental €700m (US$729.7m) towards advanced renewable energy generation infrastructure.
The comprehensive corporate report highlights multifaceted investments, including:
- Strategic price reductions across product portfolios
- Geographical expansion through new retail locations in Japan, Norway and Switzerland
- Implementation of 40 innovative Plan and Order Points
- Development of three pioneering Ingka Centres meeting spaces
Strengthening commitments to climate action
Conforming to the Paris Agreement, Ingka has revised its objectives, aiming to halve absolute emissions across its value chain by 2030 and reach net zero by 2050.
These daunting yet critical goals underline Ingka's robust plan titled '=Net Zero and Beyond', which was endorsed by the SBTi in 2024.
The extensive report encapsulates Ingka's performance across four strategic pillars: Better Homes, Better Lives, Better Planet and Better Company, providing both financial and non-financial insights.
It details progress in areas like lowering product prices, opening new store locations, elevating circular service offerings and bolstering the integration of digital and physical customer engagements.
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