Ingka to Invest US$1bn in Circularity: Where Will it Go?

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IKEA recycling
Ingka Investments, an arm of Ingka Group, which includes IKEA, will pour US$1bn into companies that are increasing recycling infrastructure

Ingka Investments, an arm of Ingka Group, has announced a plan to invest just over US$1bn in businesses that are growing their recycling infrastructure.

Announcing the move, the company said: “Every year, the global economy consumes 75% more natural resources than the Earth can regenerate.

“This generates tremendous amounts of waste, yet less than 20% of waste is recycled.

“To support the transition towards a circular economy, Ingka is aiming to invest about EUR 1 billion in companies that will contribute to recycling infrastructure.

“In doing so, we invest to recycle more end-of-life products into secondary raw materials.”

Lukas Visser, Circular Investments Portfolio Manager, Ingka Investments

Growing businesses that cut carbon

In 2017, Ingka Group set up Circular Investments to invest in companies contributing to the transition to a circular economy.

The focus is to make a difference for plastics, mattresses, textileFs, wood and food waste.

The company said: “We aim to grow profitable businesses that avoid millions of tonnes of CO2e and increase the availability of recycled material on the market

“Since 2017, we estimate that our portfolio companies have recycled around 2.7 million tonnes of materials overall, avoiding over 9.4 million tonnes of CO2e.”

Lukas Visser, Circular Investments Portfolio Manager, Ingka Investments, added: “To future proof our business we want to invest in financially and environmentally resilient companies.

“When a product’s life at home ends, Circular Investments begins. Ingka Investments is committed to transitioning towards a circular economy and retaining the value of materials.”

He said it means “investing in companies that are developing technology or growing capacity to prevent waste or supply recycled materials”.

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Three big wins

Examples of avoided carbon emissions within Circular Investments’ portfolio include:

  • RetourMatras

Recycles mattresses into valuable materials for reuse. It produces, on an industrial scale, repoliol, a circular alternative to fossil-based materials in new foam products, used by customers including IKEA in 31 upholstery and mattress product lines.

  • Morssinkhof Rymoplast

The post-consumer plastic recycler produces recycled plastics for products for global and local brands. Ingka’s investment has contributed to Morssinkhof Rymoplast doubling its plastic recycling capacity to 515,000 tonnes per year.

  • Next Generation Group

A group of companies supplying solutions that are economically and ecologically efficient, NGG offers a wide range of innovative and future oriented plastic recycling solutions, as well as advanced solutions for the treatment of organic waste.

Peter van der Poel, Managing Director, Ingka Investments

The MD’s message

Peter van der Poel, Managing Director, Ingka Investments, said: “Our EUR 1 billion ambition to invest in growing recycling infrastructure is crucial to Ingka Group’s broader sustainability strategy to go beyond our own operations.”

He said the company is “committed to doing our part to ensure that valuable materials are recycled and reused in the production of new products”.

But he added that help is needed and called for stronger legislation that prioritises recycling over incineration and landfilling”.

For example, Peter said: “It should ensure that Extended Producer Responsibility schemes are resulting in higher recycling rates.

“We also welcome eco-design regulations to encourage the demand for these recycled materials and we are actively collaborating with relevant authorities and other stakeholders to address these issues.”

IKEA

About Ingka Investments

Ingka Investments is the investment arm of Ingka Group, the largest IKEA retailer.

Focused on long-term value creation, it invests in six strategic areas: forestland, renewable energy, real estate, circular, financial markets, and business acquisitions and venture investments.

It says: “Ingka Investments’ mission is to ensure the financial resilience of Ingka Group, support the transformation of IKEA Retail, contribute to sustainability and strengthen the IKEA brand for future generations through responsible and impactful investments.”


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