IKEA invests 200M euros to become climate-positive on war footing by 2030

IKEA's investment will focus on two portfolios –transforming the supply chain to integrate renewable energy use and removing carbon from the atmosphere through reforestation, restoration of degraded forests, and better forest management.
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Amid the rising concerns over climate change across the world, a number of corporates have come forward to work towards environmental sustainability. Recently, Swedish home furnishing retailer IKEA invested 200 million euros to speed up its actions to become climate-positive by 2030.

The investment has come about in connection with the upcoming UN Climate Change Conference COP25. According to the company, the investment will focus on two portfolios – one, to transform the IKEA supply chain to integrate renewable energy use, and two, to remove carbon from the atmosphere through reforestation, restoration of degraded forests, and better forest management practices.



The first portfolio will support the retailing giant’s goal to use 100 percent renewable energy (electricity, heating, cooling, and other fuel uses) in its production by 2030. This will be built in collaboration with direct suppliers.

The second portfolio will invest in projects to remove carbon from the atmosphere and store it through reforestation and responsible forest management. Responsibly managed forests play a vital role in protecting ecosystems, supporting biodiversity, and climate change mitigation.

Wood being one of the main raw materials that IKEA uses, the company has worked to promote responsible forest management around the world.

It is stated that more than half of the IKEA climate footprint comes from materials used in its products and production. Torbjörn Lööf, CEO of Inter IKEA Group, said,

“Our ambition is to reduce more greenhouse gas emissions in absolute terms by 2030 than that emitted by the entire IKEA value chain, while growing the IKEA business.”

The company is also looking into its business in India towards becoming climate-positive. The IKEA purchasing organisation works with over 60 local suppliers who produce IKEA products as part of the global supply chain, enabling them to be more people- and planet-positive and transition to using 100 percent renewable energy in its production. It is also working towards using renewable and recyclable raw materials for products.

IKEA’s retail stores are also working towards becoming carbon-neutral. The company is using renewable energy in its logistics by adopting more electric vehicles (EVs). In India, it has already achieved 20 percent use of EVs in its logistics operations and aims to reach 60 percent in the next three years.

Another important initiative of the company has been to convert rice straw into raw material for products to reduce air pollution, which has resulted in the creation of a new collection, FÖRÄNDRING, which uses only rice straw.

Lena Pripp-Kovac, Chief Sustainability Officer of Inter IKEA Group, said,

“We believe that the best way to minimise our climate impact and to contribute to limiting climate change to 1.5°C is mainly by reducing our greenhouse gas emissions. But, we also need to remove existing carbon from the atmosphere. We can make a positive difference through our integrated supply chain, our global presence, and our forest and climate expertise.”

In a similar initiative, Procter & Gamble India has set up a Rs 200-crore environmental sustainability fund, to collaborate with external partners and offer environment-friendly business solutions.

Commenting on the initiative, Madhusudan Gopalan, MD and CEO of P&G Indian Subcontinent, according to PTI reports, said, “Environmental sustainability is a key pillar of the company's citizenship efforts and is embedded in its business strategy. We know that solving the biggest challenges requires collaboration that enables people, the planet, and businesses to thrive.”

India is a priority market for the company that continues to be at the forefront of innovation, Madhusudan added.

Last year, the company had set up an 'Innovation Sourcing Fund', through which it has already invested more than Rs 200 crore on implementing innovative solutions in collaboration with external partners from across the country.

(Edited by Athirupa Geetha Manichandar)