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IKEA Sustainability Report FY19

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IKEA Sustainability Report FY19 © Inter IKEA Systems B.V. 2020 © Inter IKEA Systems B.V. IKEA Sustainability Report FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX In this report INTRODUCTION Page 3 About this report This is an IKEA Brand report and it covers the entire IKEA The IKEA business FY19 Page 3 business and value chain. It summarises the performance Sustainability highlights FY19 Page 4 against the IKEA sustainability strategy, People & Sustainability challenges Page 5 Planet Positive, during FY19 and includes information from across the franchise system and the different ABOUT THIS REPORT Page 6 companies operating under the IKEA Brand. The FY19 IKEA Materiality Page 7 Sustainability Report is issued by Inter IKEA Group. The One brand – many companies Page 8 report is structured as follows: Introduction letter Page 9 BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 Page 11 Section one Healthy & sustainable living Page 13 Summarises key progress during FY19 against the Circular and climate positive Page 17 commitments in the IKEA sustainability strategy. Fair & equal Page 34 OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN Page 37 Section two Materials & sourcing Page 38 Production Page 63 Takes a complete value chain perspective – from Product transport Page 75 materials to product end-of-life – to demonstrate how IKEA retail Page 78 the IKEA business works at all steps of the value- Customer travel & home deliveries Page 88 chain (and even beyond) to reach our sustainability Life at home & consumption Page 91 ambitions. This section includes more details and activities during FY19. IKEA & social entrepreneurs Page 106 IWAY Page 109 COLLABORATION & ADVOCACY Page 113 SUSTAINABILITY GOVERNANCE Page 118 SDG INDEX Page 120 The financial year 2019 (FY19) is the period from 1 September 2018 to 31 August 2019. 2 - IKEA SUSTAINABILITY REPORT FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX The IKEA business in FY19 211,000 9,500 433 IKEA co-workers More than 9,500 products in the IKEA range IKEA Stores in more than 50 markets New IKEA stores opened 2,000 12 around the world More than 2,000 new products 43 IKEA Industry production units billion 1 billion in 9 countries 2.8 visits to IKEA websites More than 1 billion visits to IKEA stores markets introduced e-commerce 9 and customers in most IKEA markets can now shop online 1,000 41.3 billion increase in Nearly 1,000 home furnishing EUR 41.3 billion IKEA retail sales e-commerce sales suppliers in more than 50 countries 43% 3 - IKEA SUSTAINABILITY REPORT FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX Sustainability highlights FY19 A break in the trend for the IKEA Offering more plant-based food: After the Promoting decent work: Updating the climate footprint: The climate footprint success of the veggie hot dog (almost 1 out IKEA supplier code of conduct (IWAY), of the IKEA value chain decreased by of every 10 hot dogs sold in an IKEA bistro is ensuring that it’s relevant and up-to-date 4.3% and is now equal to the level of a veggie hot dog!), vegan strawberry soft ice for our suppliers to meet or even go baseline FY16, while the IKEA business was introduced in April 2019 and a plant-based beyond our requirements. Read more, continued to grow. Read more, page 28. version of the classic IKEA meatball will be page 109. launched in August 2020. Read more, page 102. Sourcing responsibly: 91% (84% FY18) of Transforming into a circular business: Collaboration with social entrepreneurs: wood used for IKEA products is now from Testing new models of product ownership, Launch of the first programmes not more sustainable sources1 (MSS). Read which offer furniture as a service in directly linked to the IKEA business to more, page 48. Switzerland, Netherlands, Poland and support even more marginalised people Sweden. Read more, page 100. around the world – for example the accelerator programme in partnership with Ashoka. Read more, page 106. Developing collections for people and Developing a circular product range: Investing to drive change: After the the planet: Using material innovation 80% of the IKEA home furnishing range end of FY19, Inter IKEA Group announced and design to tackle ocean plastic is now assessed according to the IKEA the decision to invest EUR 200 million to pollution (see MUSSELBLOMMA, page circular product design principles. Read accelerate the transformation to become 52) and air pollution (see FÖRÄNDRING, more, page 22. a climate positive business by 2030. Read page 43). more, page 28. Making renewable energy affordable for Using more recycled materials: The more people: Customers in seven markets share of recycled polyester in textile generate their own renewable energy with products has reached 59% (compared support from IKEA Home Solar. Through to 24% in FY18) – on our way to the goal Home Solar, customers saved on average of 100% by the end of 2020. Read more, EUR 400 per year on their energy bills. Read page 52. more, page 95. 1 More sustainable sources for wood includes FSC® certified or recycled wood. 4 - IKEA SUSTAINABILITY REPORT FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX Sustainability challenges Addressing unsustainable consumption: Improving working conditions: As decent Enable more people to live better everyday lives working conditions are fundamental to within the limits of the planet. doing good business, we are continuously strengthening our efforts to improve the Remaining affordable: IKEA products are for the conditions throughout our supply chains. Read many people, so we need to continue to ensure more, page 109. that the IKEA offer remains accessible to those with thin wallets. Including vulnerable groups in society: To Limiting climate change to 1.5°C: Decoupling create better possibilities for inclusion in areas of our climate footprint from growth takes time. the world that need it the most, we are working Even if we see a positive break in the trend with partners who employ marginalised groups. this year, we need to reduce the IKEA climate Read more, page 106. footprint, in absolute terms, the coming years before we can say that we are heading in the right direction. Read more, page 23. Sourcing recycled materials: There is a shortage of clean, recycled materials, such as plastics and textiles, and we are working to increase global availability. This is an important element of minimising environmental impact and moving towards a circular economy. Read more, page 39. 5 - IKEA SUSTAINABILITY REPORT FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX About this report FY191 is the second IKEA sustainability report since the relaunch of the sustainability strategy, People & Planet Positive, in 2018. The strategy covers the entire IKEA value chain and franchise system, with ambitions leading to 2030. This sustainability report gives an overview of the progress against the IKEA sustainability strategy. It includes both key activities from FY19 as well as an update on the ongoing work to further assess the total footprint from the IKEA value chain, our impact and our work to set baselines in order to better measure the progress towards 2030. We now, for example, have a comprehensive view of the total IKEA climate impact, as well as parameters on how to measure circularity. We are still in a development phase for how to better measure social impact and healthy and sustainable living. This does not, however, prevent us from leading activities and developing new solutions in these areas. The objective of this document is to be transparent about our journey even though not all new performance indicators and ways of measuring are complete. During the next two years, the aim is to have a new performance framework process in place in order to enable reporting for the next decade leading up to 2030. By working together with different stakeholders, we are gaining an increasingly clearer picture of our journey ahead. 1 The financial year 2019 (FY19) of the IKEA business is from 1 September 2018 to 31 August 2019. 6 - IKEA SUSTAINABILITY REPORT FY19 INTRODUCTION | ABOUT THIS REPORT | BECOMING PEOPLE & PLANET POSITIVE: PROGRESS FY19 | OUR IMPACT THROUGHOUT THE IKEA VALUE CHAIN | COLLABORATION & ADVOCACY | SUSTAINABILITY GOVERNANCE | SDG INDEX Materiality: Choosing our focus areas Our strategic priorities presented As an outcome, we clustered the identified forest management practices and product Healthy and sustainable material topics into three major challenges development. solutions for life at in the People & Planet Positive home & work critical to the IKEA business: strategy were selected by taking climate change, Human rights unsustainable consumption and inequality. This report aims to inform people about our key Climate footprint Decent work a materiality approach. Material achievements on the material topics in 2019. Materials Social impact topics are considered the most The IKEA sustainability strategy organises our Sourcing important sustainability issues efforts to tackle these challenges and to become people and planet positive around three focus Production in terms of the ability of the IKEA areas: Logistics business to have an impact as a global home furnishing and food Operations • Healthy & sustainable living business. • Circular & climate positive • Fair & equal We also looked at what stakeholders expected from us and where they could see us making During FY19, we continued the process of Unsustainable Climate Inequality consumption change the biggest positive changes.
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