IKEA’s 2023-2024 sustainability and financial disclosures present a compelling example of how a global retail and home furnishings leader is advancing climate action, circularity, and social responsibility while maintaining business growth and affordability. The data show that, as of FY24, IKEA has achieved a 28% reduction in absolute greenhouse gas emissions compared to its FY16 baseline, with a further 5% decrease from FY23 to FY24, signaling steady progress in decoupling emissions from business expansion.
This emissions reduction is driven by several key strategic initiatives:
- Scaling renewable energy use and efficiency: IKEA increased the share of renewable electricity in its retail and operations from 67% to 71%, and achieved 100% renewable electricity at 491 factories and suppliers, representing 44% of direct suppliers.
- Material innovation and circular design: Recognizing that materials account for nearly half of its climate footprint, IKEA is intensifying efforts to increase the share of secondary raw materials, improve material efficiency, and develop products designed for reuse, refurbishment, and recycling, thereby addressing both climate and biodiversity impacts.
- Value chain engagement and responsible sourcing: IKEA expanded supplier support for renewable electricity access into 14 new markets and enhanced its supplier code of conduct (IWAY) to include social and environmental criteria, such as animal welfare and seafarers’ rights, strengthening accountability across the supply chain.
- Electrification and transport optimization: The company is actively reducing fossil fuel use in logistics and retail operations through electrification and efficiency improvements, contributing to emissions reductions despite fluctuating production volumes.
- Climate roadmap and science-based targets: IKEA’s FY30 climate roadmap, validated by the Science Based Targets initiative (SBTi), outlines a pathway to halve emissions across the value chain by 2030 relative to FY16, integrating circular economy principles and renewable energy transition.
Financially, IKEA continues to balance sustainability with accessibility, having lowered prices by an average of 10% across 63 retail markets in FY24 to make sustainable living more affordable. This approach underscores the company’s commitment to embedding sustainability in its business model without compromising growth or consumer reach.
IKEA’s disclosures illustrate a comprehensive and integrated approach to sustainability that encompasses energy transition, materials circularity, supplier engagement, and social responsibility. The company’s ability to reduce its climate footprint substantially while expanding its business and enhancing affordability positions it as a leader in sustainable retail, demonstrating that ambitious climate goals and commercial success can be mutually reinforcing in complex global value chains.