Wood is part of the IKEA identity

More than half of all products in our range are wood based

Forestry Brussels 210415 b 18,6 million m3 RWE/year

Forestry Brussels 210415 Let’s estimate:

18,6 million m3 RWE

= 465 000 Timber Trucks (24 meter long) = 11160 Kilometers (distance Älmhult – Surabaya) = 1 % world industrial wood consumption

3 Forestry Brussels 210415 IKEA FY14 Forestry Key Figures Solid wood and board materials

Total volume of wood in IKEA: 15,5 million m3 RWE Solidwood 42,3% Board material 57,3% Poland Bamboo 0,4% Lithuania 22.2 360 suppliers, 3031 sub-suppliers0.9 25.8 Germany Russia 1.1 Romania 25 wood types (genus level) 1.2 1.6 1.2 1.6 48 countries of origin. 7.9 Italy 1.9 2.4 7.0 Czech 2.7 Republic 2.8 Latvia 6.5 3.1 Slovakia 4.9 3.2 6.1 6.5

Forestry Brussels 210415 Combating illegal logging

• FLEGT VPAs enable legality and SFM • Laws against illegal wood can level the playing field • Companies’ due diligence can reduce the market for illegal timber considerably – Mobilise all ! • Technology improves the performance of authorities and companies’ DDS • Cooperation is the key

Forestry Brussels 210415 However...

• No FLEGT licensed wood so far • Uneven implementation of the EUTR • EUTR is difficult to implement for companies and hard to enforce for authorities (DDS). • Companies have not been mobilised fully (Especially not SMEs) • Becoming a barrier to trade • Investment in technology is needed

Forestry Brussels 210415 Demand Side Laws on Legality of Wood

• EU Timber Regulation • US Lacey Act • • •

Forestry Brussels 210415 NAME product “Making everyday life of the description many people better does not mean selling more book cases tomorrow, it is rather € improving forest management that impacts 000 the life of the many people and communities dependent on forests what helps us realize the IKEA idea”. Peter Agnefjäll September 2014

Forestry Brussels 210415 IKEA requirements on wood

II Wood from more sustainable sources

I Minimum requirements

Forestry Brussels 210415 Approved Known Minimum Species Origin requirements

Forestry Brussels 210415 Development FY10-14 wood from more sustainable sources

1600

1400

1200

1000

MSS 800

600

400 41,4%

32,4% 200 22,6% 15,8% 16,2%

0 FY10 FY11 FY12 FY13 FY14

Forestry Brussels 210415 20

Forestry Brussels 210415 Forestry Brussels 210415 Role of certification • IKEA considers the legal due diligence systems in certification best practice • Control points are in the right place. In the forest or where the wood leaves the forest • IKEA due diligence integrates both FSC and PEFC approaches to ensure legality

Forestry Brussels 210415 FSC and traceability • FSC Chain of Custody does not mean physical traceability • Considerably reduces the risk of unwanted wood entering the supply chain • One up – one down.

Sawmill Component factory Chain of custody producer Sawmill Component factory Sawmill Furniture Trader”Forest Tracing”producer Sawmill Component Sawmill factory

Forestry Brussels 210415 It is normally not possible to trace individual product back to the forest

Forestry Brussels 210415 Materials of wood origin in a modern simple chest of drawers Board, 3 types Paper core foil, 3 types* Paper core edge band*

7 composite wood based materials

Forestry Brussels 210415 Material sourcing for a simple product x 50-60 x 50-60 x 50-60 x 50-60 Pulp Pulp x 3-4 mill mill x 3-4 x 2-3Paper Paper x 2-3 Foil mill x 2-3 mill Board mill x 2-3 mill Foil mill x 50-60 x 2-3 Board mill x 50-60 x 3-5 Furniture x 50-60 producer Board mill x 2-3 Foil Foil mill mill Paper x 1-2 x 2-3 Paper mill mill Pulp x 2-3 Pulp mill x 2-2 mill x 3-4 x 3-4 IKEA Forestry Brussels 210415 IKEA Approach in High Risk Areas

• The supplier in the lead – Commitment, standard, tools • 100% FSC in 2017 • Audits every year • Supply Chain Audits for uncertified suppliers and supply chains • New supply chains require approval • Stop deliveries if IWAY Must violation • Partnership with external organisations (WWF) • On the ground capacity (Foresters) • Training of business teams and suppliers • Support for certification and backward integration • Test new technology • Networking • Close contact with authorities • Continuous learning and improvement

Forestry Brussels 210415 EUTR Timber Coalition (IKEA, Kingfisher, , M & S) • Logical to expand the scope but hand-in- hand; • Uniform enforcement • Harmonised performance • Recognition of certification (Chain-of- custody) – Best Practice DDS – Contributing to sustainable forest management

Forestry Brussels 210415 20 Focus! Forms of Illegal logging in the Russian Far East

• Outright timber theft by wildcat logging brigades (becoming less common)

• “Illegal logging with paperwork” is now more popular:

• Overlogging on timber leases or logging of high-grade in place of low- grade material

• Abuse of “Intermediate” and “sanitary” logging

• Export of stolen timber under the “mask” of timber lease documents

Source: B. Milakovsky, WWF Amur

Forestry Brussels 210415