Green energy and democratic design across the Ingka Group

The first IKEA company was founded in 1943, in southern Sweden. From its remarkably humble beginnings, fast forward eight decades later, and this furniture giant is relied upon by countless homeowners, across the globe. 

It exists as a franchisee system, with the Ingka Group forming the largest franchisee within the IKEA system, and IKEA Retail as its core business.  

In the IKEA Retail arm, the company mangages almost 400 IKEA stores, spanning 32 markets, with 657 million store visitors to these stores, and over 4.3 billion visits to IKEA.com - figures which are all growing rapidly. 

In an exclusive interview with Karen Pflug, the Chief Sustainability Officer of the Ingka Group, we found out how this pace of growth is being balanced with the demand for sustainability. She outlined how this household name is deploying democratic design and pioneering sustainable solutions across its entire, global value chain. 

Ingka and IKEA - a full value chain approach to sustainability 

Alongside representing 90% of the sales within the IKEA system, the Ingka Group also includes Ingka Shopping Centres, and an investment arm called Ingka Investments, which forms a core component of its sustainability agenda. 

Pflug outlines how, in order to attain and evolve its sustainability targets, IKEA and the Ingka Group collaborate extremely closely. 

“Although Inter IKEA Systems, which is the franchisor, develops and designs the range and works directly with our suppliers, we absolutely have to work together, and our efforts go hand in hand,” Pflug explains.  

“This is a full value chain approach to sustainability - they're our biggest supplier as well as being our franchisor, so of course we need to work together, whether that's on the whole creation of the range, or the services that we offer for our customers, and so we have established a really holistic value chain approach.”

To this aim, the two companies plan their sustainability policy almost entirely in tandem. 

“We both have what we call the IKEA People & Planet Positive strategy as our guiding star. And then, what we've done is take that strategy - which was developed several years ago by Inter IKEA - and said, ‘What's the Ingka take on that, which will then help us to deliver both on our strategic sustainability ambitions, and contribute to the IKEA sustainability ambitions?’. So our approach is definitely aligned,” Pflug asserts. 

“The way we structure it is the same as well. Our focus is upon the climate and circular, healthy and sustainable living. This is how we help our customers to make better, more sustainable choices, and the fair and equal agenda around human rights and social impact that we have established.”

Tackling climate impact with transparency

Largely thanks to its extensive investments in green energy and waste reduction initiatives, the Ingka Group is widely regarded as one of the industry’s sustainability pioneers.

“We are seeing that the Ingka Group is being recognised as a leader, particularly in the climate space,” Pflug states.  

“We have implemented quite a lot of initiatives across, again, the full value chain. In terms of renewable energy, we are very much focused on - and we've committed to - €6.5bn to be invested in renewable energy, up to 2030. And, so far, we've invested €3bn on renewable energy projects, both wind and solar.” 

The group has already set up 575 wind turbines in 17 countries; 20 solar parks with over 900,000 solar panels on the roofs of IKEA stores and warehouses - effectively utilising its prime real estate - and is working to implement zero-emission deliveries by 2025 for all home deliveries.

“Beyond that, switching energy to being clean is one thing, but it's also about being much smarter and saving energy, too,” Pflug explains. 

“So, we've got action plans on an annual basis for all of our buildings, investing €54mn in energy saving projects, switching to LED lighting, upgrading the management systems, and improving insulation.”

The Skills for Employees integration initiative

In terms of its wider sociological impact, the Refugees Skills for Employment initiative represents one of the group’s most significant impacts. 

The aim of the initiative is for 2,500 refugees to be supported by the end of 2023, helping them to gain the skills needed for employment - either inside or outside of its business. This includes between 3-6 months of training, followed by an invitation to apply for vacancies.

“It could be on the customer fulfilment side, or it could be in the stores working on the interior design, or it could be serving customers - it spans a wide range of areas. And then afterwards, they either get a full-time, permanent job with us, or we also work together with other retailers and other businesses, to partner. We're actually looking to extend that and partner more with other businesses as well,” Pflug explains. 

“The advocacy part of all of our work is something we take very seriously. And this has been a fantastic initiative. We have been closely working and partnering with UNHCR and we have a separate arm - the IKEA Foundation - that works very closely with refugees as well.” 

“What we wanted to do within the Ingka Group is really take the approach of helping displaced people get their dignity back, and the right to work is key here, in terms of helping people feel dignity again, through a sense of purpose.”

Balancing sustainability and maintaining growth pace - the value of democratic design

So, as the company looks to a continued period of rapid growth, Pflug asserts that it has firmly future-proofed its operations, by successfully balancing this with its ambitious sustainability targets. 

“We have managed to decouple growth and our climate footprint, and we're really pleased to be able to do that.”

“Obviously, we need to stay vigilant all the time, to make sure we stay on track with that, but it's been great that we've consistently done that over the years.” 

The concept of a circular economy is proving critical here, and has formed the bedrock of the group’s thinking. Across all of its products, the aim is for customers to either acquire, care for, or pass them on - thereby extending the products’ lives - as much as possible. 

“We obviously want them to keep their products in circulation for as long as possible,” Pflug states. 

“Approaching this from one angle, we have democratic design in IKEA, which is about building to the magic formula of form, function, price, sustainability and quality together. We want good design to be available for everybody, hence it's called democratic design. When you hit the sweet spot and you get all of that right, it means that great design and sustainable design is truly affordable for the many,” Pflug explains. 

The company is designing for circularity, too. It is selectively using raw materials that can be regenerated and recycled afterwards.

“On a customer level, we also give out spare parts to people around the world to help them repair their products, so they don't have to dispose of them if a part breaks. We had 1.6 million customers use the repair and extend life services last year, so that's a fantastic movement,” Pflug outlines. 

“And then, Ingka Investments are also investing in innovative companies that enable us to achieve our circular agenda and help us to reduce waste. For example, with regards to food waste, we invested in Winnow AI technology - which is now in all of our stores - to help us reduce our food waste by over 50% since 2017.”

“We've also invested in RetourMatras, to take over a million mattresses in the Netherlands for recycling back to their constituent parts and materials. So while there is still a lot more to do, we feel we're on a really good path towards driving the circular agenda, to be able to keep products in use for longer. And then, once they do need to be disposed of, recycling them. That's our aim - to be fully circular by 2030.”