Introduction
Sustainability has become a crucial operational strategy for businesses worldwide. Organizations now recognize the importance of minimizing their ecological footprint as a responsibility toward future generations and the planet. Carbon audits play a pivotal role in this shift, helping businesses identify and reduce greenhouse gas (GHG) emissions. This blog examines how IKEA uses carbon audits to propel its eco-friendly business practices.
Case Study: IKEA
Background
IKEA, a multinational conglomerate renowned for its home accessories and furniture, has long demonstrated a commitment to sustainability. The company aims to become climate-positive by 2030, intending to reduce GHG emissions across its value chain while continuing to grow its business. A key component of this strategy is the rigorous conduction of carbon audits to identify and mitigate the carbon footprint throughout its global operations. In FY23, IKEA’s climate footprint was approximately 23.7 million tonnes of CO2, a 12% reduction from FY22 and a 22% reduction from the base year FY16. This was achieved through the use of renewable energy in production and retail, improved energy efficiency in lighting products, and reduced production volumes.
Challenge
IKEA faced the challenge of aligning its vast, global supply chain with its sustainability goals. The company needed to reduce emissions from both direct and indirect operations, including stores, manufacturing, product use, and the supply chain. Managing these emissions required a robust mechanism for measuring, tracking, and driving improvements.
Solution: Implementation of Carbon Audits
A comprehensive carbon audit was conducted to measure the carbon footprint of IKEA’s products and operations. The audit included the following components:
- Direct Emissions: IKEA upgraded its HVAC systems to energy-efficient models, installed solar panels on store roofs, and transitioned to electric vehicles for home deliveries and store operations.
- Supply Chain: The carbon audits extended to suppliers, where IKEA collaborated with raw material suppliers to reduce upstream emissions. The focus was on sustainable sourcing, particularly in areas like cotton and wood, which are significant components of IKEA’s product range.
- Product Life-cycle: IKEA began designing products for circularity, ensuring they were durable, easy to disassemble, and made from recyclable materials, thus reducing the carbon footprint of the product lifecycle.
Outcomes
The carbon audits resulted in several key outcomes:
- Investment in Renewable Energy: By 2020, IKEA had invested enough in solar and wind power to match 100% of the energy used in its operations. This was partly informed by the findings of their carbon audits, which highlighted high energy usage in factories and stores.
- Sustainable Sourcing: IKEA increased the proportion of wood sourced sustainably to 98.5%, with a goal of reaching 100% by 2020. The audits revealed that wood used in IKEA products accounts for a significant portion of the carbon footprint.
- Product Redesign for Sustainability: IKEA introduced products like the MUSSELBLOMMA collection, made from recycled plastic, including PET plastic waste caught in nets in the Mediterranean Sea. This initiative aimed to reduce the environmental impact of product materials, an insight derived from carbon audits.
- Improved Consumer Perception and Global Recognition: These initiatives enhanced IKEA’s reputation as a leader in corporate responsibility, attracting customers who value environmental responsibility.
Conclusion
IKEA’s commitment to driving the sustainability agenda has necessitated informed decisions and significant operational changes. The continuous focus on reducing its carbon footprint through innovative practices has brought the company closer to its climate-positive goals and set new standards in the retail industry. This case study demonstrates how carbon audits can translate corporate sustainability goals into impactful, actionable practices. It shows that investing in comprehensive carbon accounting not only ensures compliance but also fosters innovation and long-term business growth.
