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IKEA Sustainability Report FY20

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IKEA Sustainability Report FY20 © Inter IKEA Systems B.V. 2021 © Inter IKEA Systems B.V. IKEA Sustainability Report FY20 Introduction | Becoming People & Planet Positive: Progress FY20 | Stakeholder engagement | Sustainability governance | SDG index In this report Introduction Page 3 The IKEA business in FY20 Page 3 Sustainability highlights and challenges Page 4 About this report Page 7 Introduction letter Page 8 COVID-19 actions Page 10 Becoming People & Planet Positive: Progress FY20 Page 12 Materiality: Choosing our focus areas Page 13 Healthy & sustainable living Page 14 Inspiring and enabling people to live healthier, more sustainable lives Page 15 Promoting circular and sustainable consumption Page 19 Creating a movement in society around better everyday living Page 20 Circular & climate positive Page 22 Transforming into a circular business Page 23 Becoming climate positive Page 28 Regenerating resources, protecting ecosystems, and improving biodiversity Page 41 Fair & equal Page 58 Providing and supporting decent and meaningful work across the value chain Page 60 Being an inclusive business Page 62 Promoting equality Page 66 IKEA Social Entrepreneurship Page 71 IWAY – the IKEA supplier code of conduct Page 74 Stakeholder engagement Page 77 Sustainability governance Page 81 SDG index Page 83 2 - IKEA SUSTAINABILITY REPORT FY20 Introduction | Becoming People & Planet Positive: Progress FY20 | Stakeholder engagement | Sustainability governance | SDG index The IKEA business in FY20 More than 500 IKEA sales 217,000 9,500 + 500 locations, including:2 IKEA co-workers Products in the IKEA range 445 IKEA stores on 60 markets 6,000 2,000 New IKEA stores opened The amount of co-workers grew More than 2,000 new products developed 12 around the world by 6,000 compared to FY19 3 New e-commerce markets 60 More than 60 test locations 1,600 4 billion Nearly 1,600 IKEA suppliers1 Visits to IKEA websites Nearly 900 home furnishing suppliers Increase in e-commerce sales 900 in more than 50 countries 45% in FY20 (compared to FY19) 39.6 billion 3 More than 825 million visits to EUR 39.6 billion IKEA retail sales 89 Global food suppliers 825 IKEA stores on 60 markets 1 We work with almost 1,600 (1,592) suppliers for home furnishing, transport, logistics & distribution services, components, and food. 2 https://about.ikea.com/en/about-us/year-in-review 3 Excluding sales taxes, including sales of IKEA products, food and services by IKEA franchisees https://www.inter.ikea.com/en/performance 3 - IKEA SUSTAINABILITY REPORT FY20 Introduction | Becoming People & Planet Positive: Progress FY20 | Stakeholder engagement | Sustainability governance | SDG index Sustainability highlights, FY20 Reaching our forestry goal During FY20, we reached our more sustainable sources (MSS) goal for wood. Today more than 98% of wood used for IKEA products is either Forest Stewardship Council®-certified (FSC®) or recycled. Doing our utmost to protect health and Read more, page 44. Offering more plant-based food livelihoods during the pandemic In August, the HUVUDROLL plant ball was launched, and was an immediate Our first priority has been to protect and success. It’s a meat-free alternative support the health and livelihoods of co- to the iconic IKEA meatball, with only workers, customers, suppliers, business 4% of the climate footprint compared partners and communities. In coordination Decreasing the climate footprint to the ingredients of the traditional with local authorities and stakeholders, from the IKEA value chain meatball, without compromising on many markets have taken immediate action taste, texture and price. to donate IKEA products, produce materials The climate footprint of the IKEA value chain for healthcare workers or make their spaces continued to decrease during FY20, and we Read more about our new ambitious available for relief and health efforts. In total saw big improvements across the business. food goals, page 17. more than 1.7 million products, such as face These included increased energy efficiency masks, gloves, beds, bedding, food and toys, in the lighting and appliance ranges, more were donated to hospitals, medical centres plant-based food and more renewable and shelters. Inter IKEA Group also provided Completing the circular assessment of the IKEA energy in production and transport. The financial support to a number of external product range climate footprint per EUR of retail sales IKEA suppliers to keep them financially decreased by 7% between FY19-FY20. The stable during the pandemic. In addition, the More than 9,500 products, ranging from furniture to loss of sales, and the lockdowns of stores IKEA franchisee, Ingka Group, announced home furnishing accessories, have now been assessed during FY20, make the absolute reduction of an emergency relief fund of EUR 26 million, for their circular capabilities. This is a big step on our our footprint in relation to last year difficult enabling action in local communities. journey towards becoming a circular business. to compare. Read more, page 10. Read more, page 25. Read more, page 30. 4 - IKEA SUSTAINABILITY REPORT FY20 Introduction | Becoming People & Planet Positive: Progress FY20 | Stakeholder engagement | Sustainability governance | SDG index Investing to speed up action to become climate positive In FY20, Inter IKEA Group announced the decision to invest EUR 200 million to accelerate the transformation of the IKEA supply chain towards using Extending the life of our products Increasing the share of recycled polyester renewable energy and to remove Supporting decent work for people from CO2 from the atmosphere through vulnerable areas and marginalised groups Activities during FY20 included testing The share of recycled polyester in textile reforestation, the restoration of buy-back programmes and new models of products reached 83% (up from 59% in FY19). degraded forests and better forest The launch of the BOTANISK collection, made in product ownership that offer furniture as a During the year, we decided to expand the management. collaboration with six social businesses around the service and the easy accessibility of spare scope of our original goal. world, resulted in more jobs for people furthest parts. More than 14 million spare parts Read more, page 29. away from the labour market. FY20 also saw the were offered to customers. Read more, page 56. launch of new global social business products, KLARAFINA and MOAKAJSA, and the introduction Read more, page 27. of new higher-capacity social business suppliers, Moving towards 100% renewable energy which presents an opportunity to increase stable volumes and thereby greatly increase the number For retail operations, the overall share of of people from marginalised groups working for renewable energy slightly decreased to 51%. these suppliers. IKEA Social Entrepreneurship B.V. On a positive note, 23 IKEA retail countries are Next generation of IWAY, the IKEA supplier programmes also supported the scaling up of 36 now consuming 100% renewable electricity with code of conduct social entrepreneurs outside the IKEA supply chain. Iceland and the Baltics1 achieving this during the year. For transport, the share of alternative During FY20, we finalised the revision of IWAY Read more, page 71. fuels took a significant positive step. Italy and to align with the commitments and ambitions France are now using liquefied or compressed defined in our sustainability strategy. The new biogas, which reduces CO2 eq by 80% compared IWAY – IWAY 6 – defines the expectations on A new inclusive collection designed for to normal diesel trucks. In the production of IKEA suppliers when it comes to caring for people, people who need extra support New affordable ways to clean air indoors products, by the end of FY20, a 15.5% reduction the planet and animals. The updated IWAY of the climate footprint, in absolute terms, includes new topics, such as biodiversity and The OMTÄNKSAM collection was developed Indoor air is crucial for people’s health and compared to baseline FY16 was reached. This conservation, animal welfare, and an increased with the assistance of ergonomics experts wellbeing and clean air shouldn’t be a luxury for was due to the increase in renewable energy and focus on the competence development of and healthcare workers to make everyday life the few. During the fall of 2020, the FÖRNUFTIG further steps taken in phasing out coal. workers. simpler for those who need extra support. air purifier was launched in mainland China. Read more, page 36. Read more, page 74. Read more, page 67. Read more, page 16. 1 Both operated by the IKEA franchisee Miklatorg. 5 - IKEA SUSTAINABILITY REPORT FY20 Introduction | Becoming People & Planet Positive: Progress FY20 | Stakeholder engagement | Sustainability governance | SDG index Sustainability challenges, FY20 ! Reversing the resurgence of single-use plastics ! Taking more urgent actions to limit climate change to 1.5°C In the wake of the pandemic, single-use plastic is once again on the rise in society. The IKEA business removed all single-use Now more than ever, it is important to stay committed to plastic products from the home furnishing range in 2020, and long-term goals grounded in science. The IKEA business aims to remove all single-use plastic packaging material from remains committed to the Paris Agreement and towards the supply chain whenever possible. Read more, page 56. contributing to limiting the global temperature increase to 1.5°C. Read more, page 28. ! Making healthy and sustainable living affordable and accessible to the many people ! Accelerating action to improve biodiversity The majority of people want to live healthy and sustainable The world is experiencing a dramatic loss of species and lives. But one main barrier to this is that it is perceived to be ecosystems. The decreased genetic diversity represents, too expensive. People expect businesses to develop more together with climate change, one of the greatest challenges affordable products and services that are good for people of our time. We are committed to ensuring that our impact and the environment. Read more, page 15.
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