ETHICS & CSR

THE ETHICAL PERCEPTION AT IKEA

Submitted By:

Group- 10
Sheetal Mehta 21A1HP087

Vinci Gupta 21A1HP005

Simaran Sinha 21A1HP080

Unnati Sahu 21A1HP048

Shubham Barnwal 21A1HP065
Sahil Chauhan 21A2HP418

Submitted to:
PROF. (DR.) B. PAVAN KUMAR BALIVADA
IKEA’S MISSION, VISION AND VALUES
IKEA, short for Ingvar Kamprad, Elmtaryd and Agunnaryd, is a furnishings and home décor
company that was founded in Sweden in 1943. The company is most widely known for its
unique selling of “Do-it-yourself” furniture, where customers can buy the furnishing piece
and assemble it themselves at their homes. While the company has not publicly declared a
Mission Statement, it has put forward a “Business Idea” to help people understand the
company's purpose better. It reads as –

“To offer a wide range of well-designed, functional home furnishing products at prices so
low that as many people as possible will be able to afford them.”

Ikea is widely known for being exactly what its business idea entails – by cutting down their
own costs, they can provide affordable, minimalistic furniture at price ranges that cater to a
wide range of income classes.

Ikea’s vision statement reads as follows –

“To create a better everyday life for the many people.”

Ikea’s business idea is clearly reflected in their vision, and this vision encompasses all of
Ikea’s stakeholders. The company strives to provide value and growth to not just its
customers, but to its suppliers, employees, and anyone the company interacts with. The
company also highlights its core values, which are reflected in the CSR practices that are
outlined ahead in this report. These values include the following –

1. Togetherness – the value of supporting each other in the company and growing towards
our goals together.

2. Caring for people and planet – provide a positive impact over the world’s future
generations and natural resources.

3. Cost-consciousness – striving to “make more with less” and provide more value to
customers with less costs burdening them and the company.

4. Simplicity – bringing efficiency with simplicity and removing complexity and

bureaucracy from as many processes as possible.

5. Renew and improve – always learning and thriving to renew the company’s approach to
their products and services, and constantly improving as well.

6. Different with a meaning – challenge preconceived notions and conventions by

reinventing ourselves with curiosity as a driving force.

7. Give and take responsibility – empower the abilities of your employees wholeheartedly
by entrusting them with responsibilities.

8. Lead by example – always prioritize the attitude of “walking the talk” and value the
ability to take the best possible decisions, instead of just prioritizing work experience and
age.

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 CODE OF CONDUCT
IKEA is a Swedish furniture company that adheres to a code of conduct. IWAY is IKEA's way of
doing business, from selling furniture to preventing child labour.

Why a code of conduct?

IKEA's work is founded on logic, honesty, openness, respect, and integrity. Their co-workers,
customers, business partners, and society all have high expectations. Ikea intends to do well by
exceeding expectations. This code of conduct assists them in doing so. It states the behaviour that
they will all follow based on their culture and values!

Business Integrity

 Fair and honest relations with business partners: IKEA conducts business with its
partners with honesty, respect, fairness, and integrity. Ikea abides by the laws and regulations
of every jurisdiction in which they do business. Ikea will not offer or accept any rewards or
benefits from customers, other business partners, official institutions, or representatives of
such entities that violate any applicable laws or this Code of Conduct.
 Zero tolerance towards corruption: IKEA Group values trust, respect, integrity, and
honesty. Any form of corruption is incompatible to do good business. Ikea has a zero-
tolerance policy for any form of corruption.
 Avoid conflicts of interest: A conflict of interest occurs when something interferes with or
influences a co-worker’ independent judgment in the best interests of the Inter IKEA Group.
IKEA employees must avoid situations in which their interest’s conflict with, or appear to
conflict with, the company's interests.
 Political neutrality: IKEA is politically agnostic when it comes to political parties and
candidates. Company names or assets related to companies within the company may not be
used to promote or discredit political parties or candidates' interests.

Human rights and working environment

 Equal opportunities: IKEA hires and treats their employees without regard to gender, race,
religion, age, disability, sexual orientation, nationality, political opinion, union affiliation,
social or ethnic origin.
 Good working environment: Providing a good working environment is one of IKEA's
priorities. Every employee who works for the IKEA Group is committed to a safe and healthy
working environment.

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  Harassment is not tolerated: Within IKEA Group, harassment is not tolerated, whether it is
within the company or on the job includes, but is not limited to, intimidation, discrimination,
sexual, racial, or otherwise, as well as acts or threats of violence.
 Right of association: As part of the company's commitment to employee freedom of
association and preference, each co-worker is entitled to participate in institutional and
recognized associations. No one at IKEA will retaliate, interfere, intimidate, or harass co-
workers for joining, forming, or not joining a co-worker association of their choice.
 No forced labour or child labour: The company's code of conduct prohibits child labour.
Nobody is compelled to work.
 Alcohol and drug abuse is never acceptable: Employees who are under the influence of
drugs are strictly prohibited from working in the workplace, which reduces productivity.

Environmental sustainability

 Work actively: The company works actively to maintain a balance between environmental
sustainability and resource utilization.

 Efficient use: Resource efficiency is achieved by utilizing raw materials, water, energy, and
waste efficiently.
 Good for the environment and business: In choosing equipment, materials, utilities, or
services, IKEA seeks the option that is most environmentally friendly.

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CSR ACTIVITIES FOLLOWED BY IKEA

IKEA became the third most globally known leader in environmental and sustainability and
social responsibility, after launching its People and Planet Positive program in 2012, and
since then they have taken various initiatives to incorporate social responsibility by the
employees of the company.
Their CSR activities focus on educating and empowering workers, working with the local
communities, and reducing gender fairness and any kind of minority in the company. They
also work on reducing energy consumption along with finding new alternative ways to derive
energy.

Supporting Local Communities:

IKEA with stores in around 50 locations aims to cause a positive influence on the local
communities in that area. They believe in working hard to be the good neighbor to those lives
they are present in. They support small businesses by bringing social change through social
entrepreneurs using their businesses. The social companies IKEA engage with hire local
craftspeople, primarily women
from rural regions who had little
to no access to stable
employment in the past.
IKEA has had several continuing
collaborations with social
entrepreneurs since 2012 that
employ regional craftspeople in
underprivileged regions all
around the world. Most of the
social enterprises with which
they collaborate are self-help
organizations and cooperatives
run by women. Their ability to make a living for their family along with their craftsmanship
has gained huge respect. These local artisans and IKEA work together to co-create one-of-a-
kind things using conventional handicraft techniques and materials. Few selected stores in
some countries sell these limited edition collections.

IKEA Foundation:

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Whatever their circumstances, every kid needs a secure place to live, a stable family income,
a good start in life, and a good education. The IKEA Foundation reinforces programs
conducted by organizations like UNICEF and the Clinton Health Access Initiative to assist
children and teens living in the world's poverty-stricken areas in creating a better future for
themselves and their households. There are four broad approaches to how IKEA helps these
children:

Empowering women and girls

IKEA aims on empowering women by educating them, providing finances to set up any
small-scale business, and training them with skills. They believe by taking such efforts
children’s health, education, and future chances can be improved.

Creating finer life for refugee children

With the world moving towards global warming and so much hatred towards each other,
millions of children are compelled to leave their families. IKEA foundation donated €76
million to the UN Refugee Agency to offer shelter, care, and education to refugee families in
Ethiopia, Sudan, and Bangladesh.

Stopping child labor

IKEA has already donated €80 million to UNICEF and other foundations like Save the
Children, to help fight the root cause of child labor in countries like India and Bangladesh.
This initiative has already benefited 12 million children by providing better education and
security in place of working as laborers. Furthermore, as per the estimate, this initiative will
help millions more students.

Emergency Response
With natural disasters and wars hitting and affecting the lives of children, IKEA donates its
products as emergency relief and provides financial support

Other CSR Initiatives and Charitable Donations

 The IKEA Foundation has donated €7.7 million to the "Brighter Lives for Refugees"
campaign.
 76% of the cotton we use is sustainably sourced
 IKEA carries out a supplier code of conduct that stops the use of child labor, forced or
bonded labor, and discrimination in the workplace. The Code of Conduct also calls for
employees' liberty of association and the provision of a safe and healthy environment.
 Since 2003, the IKEA Foundation, a separate charity, has donated his €1 to Save the
Children for every Soft toy being sold in all IKEA stores.

IKEA energy consumption

 The 2021 carbon footprint at IKEA was 26.2 million tons of CO2, a reduction of 5.8% in
complete terms compared to the 2016 baseline balance.
 IKEA products that use energy are on average 50% more efficient than they were in 2008.
 About 700,000 solar panels are put in place on IKEA buildings.
 IKEA possesses and operates its 327 wind turbines worldwide and invested in 730,000
solar panels in buildings around the world.

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 Recycling and Waste Reduction at IKEA

 In FY21, IKEA reduced waste by 46 percent compared to its baseline (FY17).

 In FY21, 55.8 percent of the materials procured by IKEA were renewable and 17.3% were
recycled.
 In the same period, 73% of materials used in IKEA products were renewable or recycled
 About 60% of the furniture retailer's total products are based on renewable raw materials,
and 10% of the products contain recycled raw materials.
 The retail giant aims to use 100% renewable and recyclable materials by 2030.
 The Skapro chair sold by IKEA is made from 100% reprocessed plastic.
 The IKEA catalog is the largest ever printed on 100% Forest Stewardship Council-
approved paper.

IKEA’S SUSTAINABILITY AMBITIONS FOR 2030:

· Healthy and Sustainability living - To motivate and to enable more than 1 billion humans to
live a better living standard every day within the boundaries of Mother Earth.
Ø Commitments – To spark a social movement centered on better living - living brighter, more
sustainable lives. Circular and sustainable usage should be promoted.

· Circular & climate positive- Proceed as a circular and climate-positive business and
regenerate resources while improving IKEA’s business too.
Ø Commitments- Transforming into a circular business to become climate positive. Resource
regeneration, ecological protection, and biodiversity enhancement.

· Fair & equal - Throughout the whole IKEA value chain, have a good social effect.
Ø Commitments- Ensure and promote decent and purposeful work throughout the IKEA value
chain. Being an inclusive company that promotes equality

IKEA’s STRATEGIC CSR ACTIVITIES

IKEA follows strategic CSR activities that does not only fulfils the social obligations but also
helps in the overall growth of the firm. The company has a set of goals to be achieved by
2030. The code of conduct shows behaviours that are in line with the values of the company.
The code revolves around “doing the right thing and doing things right”. This code helps the
employees and franchisees to understand what is expected in work environment: common
sense, customers, respect, fairness, and integrity.
IKEA practices more than enough CSR based on their size and business type. They have two
strong codes IConduct and IWay. IConduct describes code of conduct for franchisees
whereas IWay describes code of conduct for suppliers.
In conclusion, IKEA is highly committed to corporate social responsibility.

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 REFERENCES

 IKEA Corporate Social Responsibility (IKEA CSR): a brief overview (August 17, 2022)
https://research-methodology.net/ikea-corporate-social-responsibility/

 (n.d.). IKEA Foundation. https://ikeafoundation.org/wp-content/uploads/2019/05/IKEA-

Foundation-Ethical-Framework.pdf

 IKEA website (Community Engagement):

https://www.ikea.com/in/en/this-is-ikea/community-engagement/

 https://edubirdie.com/examples/ikea-company-overview-and-csr-analysis/

 https://about.ikea.com/en/sustainability/sustainability-governance