Climate change is no longer a distant threat, but a visible reality. This is a critical moment to take climate action. According to the latest Intergovernmental Panel on Climate Change (IPCC) report published in 2018, we have just 12 years to limit catastrophic climate change. The solutions already exist, but to limitthe effects of climate change we need drastic changes to how we live and how society consumes resources.
IKEA has an ambition to become climate positive, reducing more greenhouse gas emissions than the IKEA value chain emits. For us in Ingka Group this means generating renewable energy, consuming and purchasing renewable electricity while increasing energy efficiency and working to halve emissions from customer and co-worker travel. We go beyond our own operations by inspiring and enabling people to live in a more climate friendly way, for example, through the IKEA Home Solar offer, read more here. We also strive for zero waste in our own operations and develop services that support circular resource flows and more sustainable consumption.
During FY18, while we continued to make progress towards our goals, we did not make as much progress as we had hoped in all areas – we still have a lot to do and we must redouble our efforts to achieve our ambitions. We know that taking climate action and working towards zero waste makes good business sense – and our research tells us it’s what our customers expect from us too.
In FY18, we:
Since the industrial revolution, humankind has warmed the planet by an additional 1°C and current use of resources requires the equivalent of around 1.7 Earths1. At risk are changes in weather patterns, more frequent extreme weather events, food and water crises and dramatically rising sea levels.
The risks, and potential costs, to our business are significant – our operations could be affected by extreme weather, by resources becoming scarce, and by damage to the ecosystems we rely on. The changing climate is disrupting the communities where we operate and impacting our co-workers and customers.
The long-term prosperity of communities depends on our common efforts to tackle climate change, for example, by generating and using more renewable energy and contributing to a circular society. With global greenhouse gas emissions needing to peak by 2020 and be reduced to near zero by 2050, and with pressure on natural resources increasing, we must work together and act fast.
It will take all parts of society to build the low-carbon economy. Ingka Group is determined to be part of the solution, to lead by example and inspire others. Addressing climate change offers huge opportunities, including job creation, innovation, economic growth and lower energy dependency.
1) Source: Earth Overshoot Day: www.overshootday.org
At Ingka Group we’re focusing on:
We’ve set challenging science-based targets to reduce our greenhouse gas emissions
in absolute terms. This means we’re doing our part in the global effort to keep earth’s temperature increase to maximum 2°C over preindustrial levels, and aiming for 1.5°C.
We believe all resources are too valuable to be wasted. By adopting a circular economy approach we can help conserve precious resources, generate less waste, and reduce costs. Using fewer resources helps us to cut emissions and is essential to making progress towards the IKEA climate positive ambition. We are striving for zero waste in our operations and looking for new ways to reduce, reuse and recycle.
In FY18, Ingka Group set ambitious science based targets. This will help us to play our role in reducing greenhouse gas emissions in absolute terms and contributing to limiting global temperature increase to well below 2°C, aiming towards 1.5°C, by the end of the century.
Our targets for 2030 approved by the Science Based Targets Initiative include:
2) By 2030 we aim to halve emissions relative to the number of co-workers and number of visitors to our stores, compared to the FY16 baseline.
3) The scope includes the footprints of materials, food ingredients, product transport (excluding customer deliveries), the production at suppliers, and the use of products in people’s homes.
We believe that it is possible to tackle climate change if everyone gets involved and takes action. We are members of two initiatives led by The Climate Group that bring together businesses committed to renewable energy (RE100) and electric vehicles (EV100). We are also working with the World Business Council for Sustainable Development, We Mean Business coalition, Solar Power Europe and other organisations to accelerate climate action. In FY18, we were involved in key events including Climate Week NYC and COP23. We also advocated for collective action on climate change through the UN Talanoa Dialogue.
In FY18 our scope 1 and 2 greenhouse gas emissions increased by 2.8% in absolute terms compared to our FY16 baseline. It’s challenging to reduce emissions in absolute terms and we are continuing to focus on improving energy efficiency, generating and buying renewable electricity and retrofitting our buildings with renewable heating and cooling technologies. We are starting to make progress in decoupling our emissions from business growth, meaning growing our business without growing emissions. Our retail business grew by around 8.5% in FY18, compared with FY16.
In FY18 our total carbon efficiency improved by 6.5% against our FY16 baseline. This was due to Ingka Centres locations in Europe switching to renewable electricity, and energy efficiency improvements at
our buildings in Russia. However, carbon efficiency (compared to FY16 baselines) decreased at our distribution centres due to co-workers operating more shifts, and at our offices due to changes in company structure and reporting procedures since FY16, as well as expansion in Russia where we have significantly higher energy usage and carbon emissions per m2 of GBA (gross building area).
In this report, energy consumption figures include IKEA stores (and other sales points) operated by Ingka Group, as our distribution centres, Ingka Centres meeting places (common areas and shared services), and offices.
|Ingka Group carbon footprint (tonnes CO2e)|
|FY16||FY17||FY18||“Percentage change compared to FY16”||“Percentage of total emissions in FY18”|
|Scope 1 and 2 energy-related emissions from buildings (tonnes CO2e)|
|IKEA Distribution Centres||28,025||37,746||43,146|
|Ingka Centres locations (Shopping Centres)4||296,923||281,292||267,067|
Carbon efficiency (% improvement against FY16 baseline)
|Carbon efficiency (% improvement against FY16 baseline)|
|Kg CO2e per m2 GBA (gross building area)||FY16 Kg/m2||FY16 Kg/m2||FY18 Kg/m2||Improvement %|
|IKEA Distribution centres||7.1||9.4||10.3||−45|
|Ingka Centres locations (Shopping Centres)||65.1||60.7||56.7||13.0|
|Scope 3 (indirect) Ingka Group emissions at each stage of our value chain (tonnes CO2e)|
|1. Purchased good and services||11,669,035||11,921,564||12,318,991|
|2. Capital goods||140,94||162,623||140,94|
|3. Fuel-and-energy-related activities (not included in Scope 1 or 2)||238,214||237,097||305,213|
|4. Upstream transportation and distribution||944,086||879,376||957,356|
|5. Waste generated in operations||42,235||49,007||49,61|
|6. Business travel||42,91||39,265||39,001|
|7. Employee commuting||111,915||120,583||123,703|
|8. Upstream leased assets6||N/A||N/A||N/A|
|9. Downstream transportation and distribution7||
|10. Processing of sold products||N/A||N/A||N/A|
|11. Use of sold products||4,982,167||5,506,868||5,259,304|
|12. End of life treatment of sold products||786,233||803,707||847,873|
|13. Downstream leased assets||155,869||188,456||161,707|
|Ingka Group location/market based emissions from consumed electricity in FY188|
|Consumed electricity (MWh)||2,089,644||2,112,256|
|Location based emissions (tonnes CO2e)||800,677||813,16|
|Market based emissions (tonnes CO2e)||453,326||456,051|
|Footprint reduction from using electricity from renewable sources (%)||-43.4||-43.9|
Renewable electricity generation
We believe that the future of energy is renewable. In FY18, we generated renewable energy equivalent to 81%9 of the energy we used across our operations, and by 2020 we aim to reach 100%10. In FY18, we generated 2,714 GWh of renewable electricity11 from wind and solar PV (photovoltaic), enough to meet the annual needs of around 529 IKEA stores. We now have 900,000 solar modules on our sites and we own and operate 441 wind turbines in 13 countries.
Renewable electricity consumption
Almost three quarters of the solar electricity we generate on our Ingka Group sites is used in our buildings, and just over a quarter is sold to the grid. In some markets where we own and operate wind farms, we use the renewable electricity credits for our own operations. In markets where we cannot use credits from our own generation, we purchase credits from others, helping to further increase demand for renewable electricity.
We also purchase renewable electricity from energy suppliers for many of our sites. Nearly 80% of our buildings worldwide run entirely on renewable electricity. This reduces our greenhouse gas emissions from electricity consumption by nearly 360,000 tonnes CO2e, and is equal to a 44% reduction compared with the average carbon footprint of electricity available from the grid.
Renewable heating and cooling
With 367 IKEA stores in 30 countries and 45 Ingka Centres locations in 14 countries, it takes a lot of energy to keep our co-workers and customers cool in summer and warm in winter. We’re investing in renewable technology for heating and cooling such as ground and air source heat pumps and biogas and biomass boilers. We’re aiming for 100% renewable heating and cooling, and all building projects that are approved from 2020 onwards will include renewable heating and cooling systems, read more here.
9) If sub-metered tenant consumption was not included, generated renewable energy would be equivalent to 93.5% of consumption.
10) Our renewable energy generation target includes landlord-obtained energy which is purchased by Ingka Centres locations and passed through to tenants for use in their rented areas.
11) Wind and solar PV.
|Renewable energy generation by type|
|Electricity from wind (GWh)||1,789||2,264||2,559|
|Electricity from solar PV (GWh)||124||124||155|
|Heat from renewable sources (biomass heat, solar water heating, geothermal) (GWh)||34||44||44|
|Total renewable energy generation (GWh)||1,947||2,432||2,758|
|Renewable energy investments in wind power, owned and operated by Ingka Group|
|Country||No of Turbines in FY18||Capacity (MW) in FY18||Electricity generated in FY17 (GWh)||Electricity generated in FY18 (GWh)||Equivalent to the electricity needs of households|
|Total energy usage and share of renewable energy for FY18|
|Total energy consumption (MWh)||Renewable energy13 (MWh)||Share of renewable energy used14 as % of total usage|
|IKEA Distribution centres||248,022||139,31||56.2|
|Ingka Centres locations (Shopping centres)15||1,311,489||214,611||16.4|
We’re improving energy efficiency across our IKEA stores, distribution centres, pick- up points and Ingka Centres locations. Our energy efficiency within IKEA Retail operations improved by 19.4% in FY18 compared to the FY10 baseline. We also made progress in Ingka Centres locations in FY18 compared to FY16 baselines. In IKEA Distribution Centres, energy efficiency dropped due to more shifts and higher intensity work patterns at our sites.
To improve energy performance and support our facility management teams to identify the best solutions, in FY18 we introduced an ‘energy staircase’ that prioritises options to save energy in new and existing buildings. The solutions used to improve energy efficiency in all our buildings include:
We showcase energy efficiency technologies in our leading sustainable stores, such as IKEA Kaarst, Germany, which opened in October 2017 and IKEA Greenwich in the UK which will open in 2019.
|Improvement in energy efficiency (Energy use per m2 GBA) (%)|
|IKEA Retail (baseline FY10)||19.5||17.2||19.4|
|IKEA Distribution centres (baseline FY10)||7.9||0.9||-4.2|
|Ingka Centres locations (Shopping centres17 baseline FY16)||
Customer and co-worker travel to and from our stores and other buildings and home deliveries account for around 16% of our indirect (Scope 3) carbon emissions.
Low carbon travel for customers and co-workers
Today, most customers and co-workers reach our IKEA stores and Ingka Centres locations by car. We want to make low- carbon transport easier. Our goal is to halve relative emissions18 from co-workers and customers travelling to our IKEA stores, Ingka Centres locations and other sites by 2030.
We promote sustainable transport and partner with others to inspire people to take low-carbon journeys such as by bike, bus, car sharing, running and public transport. Where we locate our IKEA stores has a big impact on people’s transport choices. Our plan to open more IKEA stores in cities and to try new formats like pop-ups and ‘pick-up and order points’ will enable more low- carbon travel, see page 24. We encourage customers to visit with their electric cars and in FY18, 75% of our stores and 50% of our Ingka Centres locations had electric vehicle charging points.
We have more than 100 low-emission transport projects on the go around the world. New projects in FY18 included:
At work, we can also make sustainable choices by avoiding unnecessary business travel and holding virtual meetings. In FY18 we launched an internal ‘travel responsibly’ campaign which resulted in 3% fewer trips than in FY17 – this is a significant decrease as trips usually increase by around 15% a year due to more co-workers joining Ingka Group and expansion into new markets or cities. Co-workers used many more virtual meetings instead, with over 73,000 web meetings a month, an increase of 54% since FY17.
Towards zero emission home deliveries
Our goal is to make 100% of customer deliveries and transport for services zero emission by 2025. To meet our goal, we’re working with our delivery partners to switch to electric vehicles (EVs) and other zero- emission solutions, and we’re investing in commercial EV charging infrastructure to facilitate this transition. We want to be at the forefront of electrification and in September 2017 we became a founding member of EV100 – a global initiative committed to accelerating the conversion to 100% electric vehicles, read more here.
13) Purchased certified renewable electricity and district heating, and renewable energy generated and used on-site.
14) Purchased certified renewable electricity and district heating, and renewable energy generated and used on-site.
15) Excluding submetered tenant consumption.
16) Includes a small amount of energy used at our windfarms.
17) In FY15 we had significant changes in our shopping centres portfolio so the baseline was reset TO FY16.
18) By 2030 we aim to halve emissions relative to the number of Ingka Group co-workers and number of visitors to IKEA stores operated by Ingka Group, and Ingka Centres locations, compared to the FY16 baseline.
19) For example, data from the IKEA Strasbourg store has been excluded from the FY18 reported figures due to inconsistencies.
20) Challenges with waste reporting in our offices during have meant we cannot report data for FY18. We are improving how we manage waste reporting to ensure accurate data for FY19.
In our operations we minimise waste as much as possible and turn unavoidable waste into resources. A waste hierarchy guides our approach to prevent, reduce, reuse and recycle waste. Some of the non-recyclable waste is incinerated with energy recovery where possible, and sending waste to landfill is always the last resort.
Creating a circular economy requires change on a large scale so we work with and engage policy-makers, NGOs and other businesses to build momentum. In FY18, we contributed to the Renewable Materials for a Low-Carbon and Circular Future Report by the Circular Economy 100 (CE100) project led by the Ellen MacArthur Foundation.
We also contributed to circular economy thinking through our work with organisations including the Ellen MacArthur Foundation CE100 and the Circular Economy 8 (CE8) – a group of companies committed to a circular economy.
Recycling and reusing waste
We are working to improve our recycling processes and partner with waste management suppliers to find new recycling solutions at our stores.
In FY18 IKEA stores across IKEA Retail Russia competed to increase recycling, growing their collective recycling rate to 63%, up from 52% in FY17. The winning teams were rewarded with a trip to IKEA Kaarst in Germany, to be inspired and learn from best practice at our newest sustainable store.
Despite our efforts, reported waste generated grew by 12% in FY18, compared to FY17. We’re analysing the data so we can identify how we can better manage waste to reverse this trend. During FY17 we changed our waste reporting system so that we can analyse waste trends in more detail each month and improve our results. We started to benchmark stores on a bimonthly basis to help us learn faster and find new ways to manage waste year-round.
However, the change of system has identified some data quality challenges in particular in IKEA Retail and Distribution Centres where we identified gaps in several countries’ waste disposal methods data19. As a precaution, we reported this waste as “sent to landfill”. Together with limited availability of recycling infrastructure at our sites in Russia and China, this accounts for higher reported waste to landfill in FY18. We’re focusing on improving the quality of reported data and regularly checking the quality of data for all business units in FY19.
Preventing product, food and plastic waste
In FY18 we at Ingka Group focused on minimising waste in three areas: products, food and plastic.
Some of our products are returned by customers or get damaged in transit before they reach the IKEA store, but that doesn’t mean they have to be wasted.
Our dedicated ‘Recovery’ teams in each of our IKEA stores repair and re-pack damaged products to go back on the shelf. In FY18 we repacked 8.7 million IKEA products, a million more than last year – enabling us to sell more products that would otherwise be wasted. We also sell refurbished products with a big discount in our ‘As-Is’ area in stores. In FY18 we gave 35 million products a new home with a customer through As-Is – that’s two million more products saved from being wasted than in FY17. During the year, more than 200 stores benefitted from a better system for co-workers and customers to find spare parts more easily and quickly, enabling them to repair products.
We’re targeting food waste at our IKEA Restaurants, Cafés and Bistros. Our aim is to halve our food waste by the end of August 20201. We’re weighing every bit of food that is thrown away in our kitchens. This helps us understand when food is wasted and why – so we can make improvements, like cooking the right amount of food. It’s helped to change co-worker behaviour and we saved 437,500 kg of food in FY18, saving nearly 1,900 tonnes of carbon emissions.
We’re also concerned about the impact of single-use plastic items like straws, cups, plates and cutlery used to serve food and drinks. In June 2018, we committed to phase out single-use plastic from customer and co-worker restaurants, cafes and bistros at our IKEA stores by 2020. During FY18, we started mapping items that will be phased out. Inter IKEA Group, the developer and supplier of the IKEA range we sell, is also phasing out single-use plastic from the IKEA home furnishing range by 2020 and is working to find more sustainable options. For more information visit the Inter IKEA Group website2.
Managing water resources
We aim to use water efficiently and inspire our co-workers to use water responsibly too. This is particularly important as one-third of our IKEA stores and distribution centres and Ingka Group suppliers are located in water-scarce areas.
In FY18 we continued our efforts to use harvested, reused or recycled water wherever possible, prioritising our sites in current and future water-stressed areas, using best available techniques and technologies. Water use increased in absolute and relative terms, due to adding new buildings, including expansion in countries with higher water consumption, better data reporting as well as external factors such as higher temperatures in the northern hemisphere.
We purchase home furnishing products from our franchisor, Inter IKEA Group, to sell to customers. In addition, we buy goods and services from thousands of suppliers to support our operations – from the contractors that build and maintain our stores to providers of last mile delivery services and the racks we use to display our products. We aim to create a common approach to procurement, applying the same high standards to everything we source. This includes:
In FY18, we continued to use our scale as a purchaser to secure more sustainable sources for non-home furnishing items and materials. For example, we made progress with buying more sustainable materials for wood and paper-based items (such as office supplies), we began work to phase out single-use plastic in our IKEA restaurants, and we sourced more renewable energy in our Ingka Group operations.
For more information on responsible sourcing related to IKEA home furnishing products, visit the Inter IKEA Group website.
|Waste disposal rates in FY18 (% per business unit)|
|Recycled||Incinerated for energy recovery||Sent to landfill||Incinerated without energy recovery|
|IKEA Distribution centres||79.2||11.7||9.1||0.0|
|Ingka Centres locations (Shopping Centres)||20.4||3.0||76.3||0.3|
|Waste produced (tonnes) and % recycled or incinerated for energy recovery|
|IKEA Retail||432,835 (91.6%)||462,564 (91.4%)||504,274 (86.2%)|
|IKEA Distribution centres||50,594 (95.4%)||55,641 (97.7%)||69,626 (90.9%)|
|Ingka Centres locations (Shopping Centres)||
|Offices||165 (69.8%)||151 (69.7%)||n/a20|
|Total (average)||549,334 (83.1)||590,258 (83.4)||663,965 (78.2%)|
|Water use by unit (m3)|
|IKEA Distribution centres||196,922||264,567||380,132|
|Ingka Centres locations (Shopping centres)||3,467,597||3,577,280||3,812,010|
1) Stores have joined the food waste reduction programme at different times so baselines vary.
You might also like
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive
People and Planet Positive