IKEA's Ingka Group: 80 Years of Sustainability Success

When 17-year-old Ingvar Kamprad, who lived on the Elmtaryd farm near the village of Agunnaryd, started a mail order company where he delivered his goods by bicycle, he could not possibly have imagined how that business would look today.

Now synonymous with stylish, affordable, accessible homeware and furniture, the yellow initials from Ingvar’s name and address emblazoned against a vibrant blue can be found on giant stores around the world – IKEA.

Much has changed since then of course, but Sweden’s most famous export (ahead of Spotify, H&M, and Volvo) continues to transform and invest to be more affordable, accessible, and sustainable.

What is the Ingka Group, IKEA's largest retailer?

IKEA Retail is part of the wider Ingka Group (no prizes for working out where that name comes from), which consists of three business areas:

IKEA Retail

The core of the business, there are 482 IKEA stores in 31 countries – with more on the way. These stores receive 657 million visitors, while the website IKEA.com has seen more than 3.8 billion visits.

Think consumers are tiring of IKEA’s smart products? Think again. FY23, which ended for IKEA in August, saw a five-fold increase in net profit to €1.5 billion (US$1.64 billion) for Ingka Group, which owns the vast majority of store franchises.

Ingka Centres 

With huge IKEA stores already forming cornerstones of landmark shopping malls, Ingka took the next logical step – to open its own centres anchored by an IKEA store, with the first in 1973 in Sweden. There are 33 of these around the world, with most in Europe and China, but upcoming locations in the US and India too.

These Ingka Centres vary greatly in size, ranging from just 28 stores in the mall to 455 stores.

Ingka Investments

Making responsible investments in the Group’s core business, or in areas that add value for customers, Ingka Investments grows the IKEA Retail business by partnering with companies that share the same values.

Ingka Investments pumped €1.3 billion (US$1.4 billion) in assets such as real estate, renewables, forestry, and business development and committed to €1.9 billion (US$2 billion).

Ingka Sustainability Report shows focus on people and planet

So what are those values?

The latest Annual Summary and Sustainability Report shows that IKEA's largest retailer Ingka Group has continued to put people and planet at the heart of its transformation, while never taking its eye off the ball when it comes to delivering great customer experiences.

In FY23, while the company saw revenues rise 31%, it simultaneously reduced its climate footprint by 24.3% (compared to the FY16 baseline).

“This year we celebrated 80 years of IKEA. So much has changed in eight decades, yet we are still guided by the same vision: to create a better everyday life for the many people,” said Jesper Brodin, CEO, Ingka Group, announcing the summary and report.

“That has never been more important or relevant than today. One of the highlights is that we managed to reduce our climate footprint while growing the business.”

Diving deeper into the Sustainability Report we see four key ‘movements’:

• Better homes
• Better lives
• Better planet
• Better company

These cover both financial and non-financial performance against a wide range of goals and provides a transparent overview of the Ingka Group business.

Ingka Group focused on having a positive impact on everyone its business touches. This included supporting 1,135 refugees through its Skills for Employment programme. A further 99,000 people living in areas near IKEA stores benefitted from the Ingka Group Neighbourhoods scheme.

How is IKEA and Ingka Group being more sustainable?

Karen Pflug, Chief Sustainability Officer of Ingka Group, said the world is facing many challenges but the group is determined to be part of the solution.

“We've chosen to stay optimistic and lead with action,” she said. “During the past year we have continued to transform our operations and expanded our offer of products, services, and solutions to make it easier for our customers to adopt more sustainable habits, including switching to plant-based meals.

“In our own operations we see continued progress in switching to renewable energy with over 79% of electricity now coming from renewable sources.

“By working together, I’m optimistic that we can create a better future for people, planet – and our business.”

Recognising that there is always more than can be achieved, Ingka Group revised its climate targets in November 2023 – aiming to reduce greenhouse gas emissions from its value chain by at least 50% by 2030 (baseline 2016) and reach net zero by 2050 without using carbon credits.

As IKEA and Ingka continue to thrive, it’s worth dwelling on their mission to be a Better business.

The Group invests a large part (85% in FY23) of its net income back into the business, allowing it to not only provide more great products, but to also be what it describes as ‘people and planet positive’.

The remaining part (15% in FY23) is paid as dividend to the Stichting INGKA Foundation to achieve its charitable purpose via strategic, grant-making philanthropy. 

As they say, ‘we push to be a fair, inclusive and empowering company with good governance, equal opportunities, and respect for human rights across our entire value chain’.

You may say it’s ‘The Wonderful Everyday’.

Brief history of IKEA

1943: Ingvar Kamprad registers a mail-order company in Sweden on 28 July 1943, which he names IKEA: an acronym of Ingvar Kamprad from Elmtaryd (the family farm), Agunnaryd (the local parish).

1948: Furniture is added to the IKEA range.

1950: The now iconic IKEA Catalogue is born

1956: The revolutionary self-assembly concept and flat packs were born, as a result of solving the problem of tables being damaged in transit.

1958: The first IKEA store opened in Älmhult, Sweden.

2018: IKEA commits to becoming a climate-positive business by 2030.

2018: Founder Ingvar Kamprad dies aged 91.

2023: 462 stores in 62 countries with 231,000 employees.

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