How Ikea is growing its business while shrinking emissions

IKEA currently makes up 0.1 percent of all global carbon emissions -- but by 2030, they're planning to be carbon negative across their business. Discussing new thinking about the lifespan of their products, from the forest to the landfill, Jesper Brodin and Pia Heidenmark Cook of Ingka Group (IKEA) share their company's steps towards sustainably sourcing materials like cotton and wood and redesigning products to extend their use without compromising on quality or affordability. (Narrated by Rosa Howard)

Rosa Howard: IKEA has over
500 locations worldwide

and is committed to being
climate positive by 2030.

That involves everything
from the raw materials

to the end of a product's life.

Because of the company's scale ...

Jesper Brodin: The carbon footprint
of IKEA is about 0.1 percent

of the global emission of carbon.

RH: ... that's a lot of carbon.

And that was Jesper Brodin,

CEO of Ingka Group,
which operates IKEA Retail.

And this is Pia Heidenmark Cook,

their head of sustainability.

Pia Heidenmark Cook:
We know that we need to change,

and we are really looking forward
to the opportunities that we can,

by transforming our business
into a new kind of business

where we look at our entire
value chain in new ways,

where we look at how we meet
with customers in a new way

and how we engage with coworkers.

We will look at price and low price,

because our vision
is to be for the many people,

it needs to be affordable.

But it's also about form, function,

sustainability and quality.

RH: How does IKEA balance sustainability

and persuading buyers to consume things
during the climate crisis?

PHC: It really means looking at
the entirety of our business.

We committed to only use renewable
and recycled materials by 2030.

We have, for example, already
all our cotton in the products,

like this sofa,

to be sustainable cotton.

We are well on our way to have all
of our wood being from sustainable sources

by 2020.

And it's also looking at:
How do we design the products

so that they can be repurposed,
reused, recycled, etc?

So it's really looking at:
How do we build circular design metrics

into our products?

But then also, how do we engage
and reach out to customers,

so, looking at new service models
like furniture as a service,

starting now testing
with business-to-business.

RH: In 2019, IKEA's business
grew by 6.5 percent.

But the company decreased
its global carbon footprint

by 4.3 percent,

beginning to decouple
growth and emissions.

JB: That step for us was --

it gave a lot of confidence
and optimism, to be honest,

showing that it's possible to grow
and at the same time,

move in the right direction
when it comes to carbon.

RH: Yes, fine, but how can you make
that shift durable

and expand that decoupling?

JB: There are some myths
that we need to rid ourselves from.

The consumption myth is one.

That sustainability should come
at a premium is a very dangerous myth,

that purpose and profit
couldn't go hand in hand --

it's the opposite.

RH: Why should people trust you?

JB: Trust is maybe
the most important thing

to get into the system
and into the conversation.

I think to start with,
you have to look at intentions.

And scrutinize is, of course,
one part of the equation here.

But when you look at the reasons why

it's important for us
to move in this topic,

it makes business sense,

from the point that coworkers
and customers will expect us to be --

and already today expect us to be --

a leader.

And thereby, it would be
dangerous for your brand

if you wouldn't take the lead
in your segment.

But last, I think,
which is most intriguing for me,

is that sustainability
is the new low cost,

it is the new model of the world.

It's not in contrast to doing
good business, but the opposite.

RH: What response are you getting
from coworkers and from partners?

PHC: Super positive response
from our coworkers,

and sustainability, in our
internal survey I share,

is actually the number two reason
why people choose to work for IKEA

and stay at IKEA.

And the number one reason
is all the lovely colleagues that we have.

RH: The climate crisis is also
a crisis of justice and fairness.

How is IKEA thinking about that?

PHC: We definitely see that climate change
is a human rights issue,

and we know that those
with thin wallets or even no wallets

are the most impacted by climate change.

So what we do is, both through
the IKEA Foundation,

which is our philanthropic arm,

we're working through various
climate activities in developing countries

and have put aside about 150 million euro
in the last two years.

Then, in Ingka, where we have
shopping centers and stores

and fulfillment centers,

we're working with refugees

and looking at how can we create
skills for employment programs,

where we do skills training
and language training.

RH: Companies generally think
quarter by quarter.

Climate is a long-term challenge
that needs immediate action.

How do you square that?

JB: We are actually foundation-owned,

so we have less of the quarterly pressure.

And our founder was amazing
in thinking and planning long-term.

And I actually recall
one of the last meetings I had with him

a few years ago, before he passed away.

We asked him how we should think and plan,

and he said, "You should think long-term."

And when we asked him,
"How long-term?" he said,

"Yeah, well, 200 years."

So I think that is possibly
a bit too long,

we don't have that time,

but 10 years is a good horizon
for all of us.