At first glance it seems like one of those odd trivia questions meant to trip quiz show participants: What does cotton farming in Pakistan have in common with global furniture icon Ikea? The answer, however, is anything but trivial and it holds the key to understanding how one organisation is working to mitigate its impact on climate change.

Faced with rising temperatures and dwindling natural resources, Ikea set out to place sustainability — of its businesses and the world around it — at the core of its operational framework. It also decided that the threat of climate change, although extremely real, was best dealt with when viewed through the prism of opportunities. Out of this thinking emerged an action plan that sought to minimise the environmental impact of Ikea operations worldwide. 

Ikea criss-crosses the globe through a network of sales and supply chain linkages — its products are retailed in 24 countries and sourced from 54 countries. Ikea believed that it could make a difference by trimming its energy and resource use and by influencing its suppliers and customers to do the same. This led the company to not just overhaul its internal attitudes and work practices but also to venture to supplier countries such as Pakistan and China where it works alongside WWF on several projects.

Sustainability had to become a central part of the way Ikea did business and the company took a well-deliberated stand which was: “We will conduct our business in such a way that we are at the forefront and a leading example of an organisation leaving the least possible impact on the environment.” This, Ikea says, was simply a matter of going back to its roots: “Our approach to sustainability started with ‘recycling’ in the small farming communities of Smaland where people lived in a sustainable way. The challenge presented by climate change could be met by adopting values that had been a part of the company’s formative years.”

Today, Ikea says its vision is to create a better everyday life for customers, coworkers and suppliers but it is clear that its products will conform to an overall vision which is: Low price but not at any price. The company says that it is clear that low prices “must not be achieved at the expense of people or the environment.”

One step at a time 

Ikea started out by identifying its carbon footprint throughout the value chain. “We looked at everything including the extraction of raw materials at source, the processing at suppliers and sub-contractors, transportation of customers to Ikea stores and products to customer homes (stores are often located in distant parts of the cities and the company encourages use of public transport and green transport vehicles for delivery of products) and use of our products in homes of the customers,” the company says. This helped target the areas that needed improvement.

Ikea found that the maximum impact on climate change was on account of raw materials and other input purchasing functions and customer habits. Raw material extraction and processing accounted for 61 per cent of the company’s total carbon footprint, while customer transportation to the Ikea stores and their use of products made up 26 per cent of the share.

The numbers helped the company establish a framework for mitigation activities and showed the areas that needed immediate attention. These were:

• Environmental design — consideration of safety, quality and environmental aspects from the initial design stage throughout the product’s life cycle.
• Energy efficiency and emission reduction in all its operations.
• Transportation efficiency with respect to products and people.
• Co-operation with WWF for development of responsible forestry and sustainable resources and energy use.

The company says that it believed right from the start that climate change mitigation efforts had to be tackled across all its operations, in conjunction with all stakeholders in every country. This would not only help achieve the targets that the company was to soon set for itself but also lead to tangible and demonstrable impact. This in turn would motivate employees and customers to further the green cause thereby setting in motion an irreversible chain of events to combat climate change.

Innovating at home

Dealing with climate change within the organisation translated into two major points of action: Reducing emissions of greenhouse gases and improving overall energy efficiency.

Ikea, in order to cut carbon emissions, has had to economise on its use of resources and materials, minimise its reliance on non-renewable materials that release greenhouse gases and develop sustainable solutions for customers.

It also meant developing efficient transport solutions. Economising is part of the company’s nature and it believes that this approach helps save not only money but the environment too. For instance, the furniture it makes is easy to dismantle which makes it simpler to recycle and reuse the materials.

Through simple yet effective steps such as this, the company believes that it can meet the challenges posed by a changing environment.

Over the past few years, designers, product developers and technicians have worked together to consider environmental aspects — along with safety and quality aspects — from the initial design stage through the product’s lifecycle.

The results have been significant. Nearly 75 per cent of the total material used in the company is renewable, and all Ikea stores and distribution centres have started recycling large quantities of waste including cardboard, paper, plastic, wood, metal and glass. Emissions from transport too have come down as transport companies working with Ikea have committed to the use of modern vehicles with cleaner fuels and emissions targets. The company has also developed packaging solutions that are innovative, less harmful to the environment and save the company time and money. An example is ‘flat pack’ packaging which uses less air and makes it possible for the company to fill every truck and container as full as possible. Flat packs get more items in each load and results in fewer journeys and hence fewer emissions. The company says, “Flat packs mean we only transport the minimum amount of air.”

Ikea has a similar story to tell on the energy front. According to the latest figures nearly half the company’s energy requirements come from renewable sources and there has been a 14 percent reduction in energy use since 2005.

This has been possible due to a concerted effort made by Ikea workers and partners across the world. For instance, Ikea workers in Shanghai, China, have reduced energy use per sold cubic metre by 23 per cent in the store by using more efficient systems. Lighting is now turned off during non-business hours and a new system controls the use of air-conditioning. In Canada, Ikea offices have reduced electricity costs by 50 per cent by installing motion sensors that regulate lighting. In the long run, all Ikea buildings aim to be supplied with renewable energy generated through sources other than fossil fuel. The company also wants to improve its overall energy efficiency by 25 per cent compared with 2005. Energy-saving lighting solutions is also being offered to Ikea customers. One such solution of using CFL systems can lead to savings of up to 80 per cent.

Ikea says: “We will use energy-saving light bulbs where possible, will have the lights on only when warehouses are open, and will install extra insulation to save on energy for heating and cooling. Then we are going to make sure that all Ikea group stores, warehouses, distribution centres, factories and offices are heated and cooled using renewable fuels such as wind power, solar power, bio fuels and geothermal energy.”

Spreading the message

As a furniture maker, Ikea was convinced that it had to look at climate change not just within the four walls of its factories or those of its suppliers but in the context of the world it operates in. It had to make sure that the materials used for manufacture — wood, cotton, glass, etc — were grown, made and used responsibly. This led to an alliance with WWF that has resulted in responsible forestry programmes, improved cotton farming techniques and greater awareness about the need to adopt a more responsible attitude towards the environment.

The partnership started out in 2002 as a three-year technical cooperation agreement that would promote responsible forestry around the world. The aim is to cut carbon dioxide emissions from Ikea suppliers and from passenger traffic to and from the stores. It has since grown in scope and reach. Today Ikea works with WWF in countries such as China, Russia, Bulgaria, Romania, Estonia, Latvia, Lithuania, Laos, Cambodia, India, Pakistan and Poland. Pilot studies in efficient ways of transporting people is being undertaken in many of these countries and work is in progress for reducing the world’s dependence on fossil fuels.

The impact has been tremendous. For instance, the Ikea intervention in cotton farming has led to a 45 per cent drop in the use of pesticides, a 40 per cent drop in the use of water and a 32 per cent fall in the use of chemical fertilisers. By 2015, the company aims to save 10.2 trillion litres of water apart from a similarly drastic reduction in the use of pesticides and fertilisers. Ikea is also training farmers in India and Pakistan in farmer field schools on sustainable cotton production techniques and on how to make more efficient use of water, essential pesticides and artificial fertilisers in a way that they don’t harm the environment.

Similarly the responsible forestry programme has led to better managed forests in China, Laos and Cambodia. Ikea has stipulated that wood used in its products must fulfil stringent norms in terms of the forests that it has been harvested in. This is forcing suppliers to shun illegally felled wood or that taken from intact natural forests and seek out those that are managed responsibly. Forestry know-how is vital since wood is one of the most important raw materials for the company and Ikea has its own forest specialists who work closely with suppliers to ensure that the wood is procured in a responsible manner.

The Ikea-WWF alliance has also led to the creation of several guides and manuals that are being used in countries that are still to meet all the supply norms. The company is also working with a few suppliers under the partnership to develop case-books of good examples and how to emulate these. Besides, there is an ongoing focus on developing green transport solutions and helping customers rely more on public transport in countries all over the world.

In the years ahead, the company plans to sharpen its attention water which, according to Ikea, “is a valuable natural resource that is subject to growing concern. Today, we monitor our water consumption in Ikea buildings. We also cooperate with WWF to reduce water use in cotton production. We support textile suppliers to reduce water use in the processing of textiles.”

For a company that was born in the woods of Sweden and whose founder Ingvar Kamprad started out by selling matches to neighbouring farms, climate change has been a cause that it has supported with fervour and passion. Its skills will be tested in the years to come as it tries to ignite the same fire in its customers and suppliers.