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IKEA Group
Sustainability Report
FY14

Contents
0 2 CONTENTS
0 3 IN T RODUC T ION
0 4. A B O U T T HE IK E A G RO UP
06. A MESSAGE FROM PE TER
0 7. A M E S S A G E F R O M S T E V E
08. THE YE AR IN BR IEF
PAGE 11 Read about how 0 9. T H E I K E A P E O P L E & P L A N E T P O S I T I V E S T R AT E G Y

we are inspiring and enabling
people to live a more sustainable 1 1 A M O R E S U S TA I N A B L E L I F E AT H O M E
life at home.
13. PRODUC T S A ND SOLU T IONS
19. E N G A G I N G C U S T O M E R S
21. C O -WO R K E R E N G AG E ME N T
PA G E 7 9
2 3 R ESOURC E AND ENERG Y INDEPENDENC E
Learn about how we work with
43
our suppliers to maintain high 25. R ESP ONSIBL E SOURCING
standards for workers and the
3 7. M O R E S U S TA I N A B L E P R O D U C T S
environment.
4 3 . M O R E S U S TA I N A B L E B U I L D I N G S A N D T R A N S P O R T
6 2 . E N E R G Y A N D W AT E R I N O U R S U P P LY C H A I N
PA G E 10 7
The complete overview of progress See how we are transforming our 7 0 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES
towards the goals in our People & business by investing in renewable
energy, reducing waste and cutting 7 3 . A B E T T E R E V E R Y D AY L I F E AT W O R K
Planet Positive strategy.
energy use and CO2 in our supply 7 9. B E T T E R L I V E S F O R W O R K E R S
chain.
88. SUPP ORT ING HUMAN R IGH T S
92. L A S T ING C H A NG ES FOR COMMUNI T IES
9 6 GOVER NANCE AND E T HICS

9 7. H O W W E W O R K
PA G E 9 2 9 8 . S U S TA I N A B I L I T Y G O V E R N A N C E A N D M A N A G E M E N T
10 2 . B U S I N E S S E T H I C S
Find out how the IKEA Foundation
creates lasting change for millions 10 2 . P U B L I C P O L I C Y
of children in the world’s poorest
10 5 . A B O U T O U R R E P O R T I N G
communities.
1 0 7 P E R F O R M A N C E A G A I N S T TA R G E T S
CONTENTS > INTRODUCTION > A MORE SUSTAINABLE LIFE AT HOME > RESOURCE AND ENERGY INDEPENDENCE > A BET TER LIFE FOR PEOPLE AND COMMUNITIES > GOVERNANCE AND ETHICS > PERFORMANCE AGAINST TARGETS
> About the IKE A Group > A message from Peter > A message from Steve > The year in brief > People & Planet Positive Strategy

0 3
Introduction
At IKEA, sustainability is central to our business.
Over seven decades, our company has grown from
small beginnings in the woods of southern Sweden
WREHLQJDPDMRUJOREDOUHWDLOHU%XWWKHLQÀXHQFH
of our Småland origins remains strong – a region
where the people have a reputation for working
hard, being innovative and making the best use of
their limited resources. In this report, you’ll read
about how we’re building on many years of working
with social and environmental issues to ensure we
have a positive impact on people and the planet.

716 million
Store visits
About the IKEA Group In FY14, IKEA Group store visits
increased 4.7% over FY13.
The IKEA Group has

operations in 42 countries 270 million
visits to our 14 Shopping
As of 31 August 2014, we had a total of Centres in Russia.
315 stores in 27 countries; 27 Trading
315
6HUYLFH2I¿FHVLQFRXQWULHV
Distribution Centres and 13 Customer
Distribution Centres in 17 countries; IKEA Group stores
1.5 billion
44 IKEA Industry production units in In FY14, the IKEA Group opened 12 Visits to IKEA.com
11 countries. In total, we have 1,002 new stores in 10 countries. As of IKEA.com had more than 1.5
suppliers, including external suppliers. August 31, 2014, the IKEA Group billion visits during FY14, up
had 315 stores in 27 countries. 15% from FY13.
FY04 FY13 FY14
€28.7 billion
Total sales FY14
179 303 315
Number of IKEA Group stores
Total sales increased by 5.9% in

local currencies to €28.7 billion.
Translated into Euros, sales
1,002 Suppliers1
In FY14, the IKEA Group had
increased by 3.0%. 1,002 home furnishing suppliers
in 51 countries.
FY04 FY13 FY14
12.8 27.9 28.7
Billions of Euros
147,000
Total co-workers
Europe: 114,000;
Americas: 19,000;
Asia & Australia: 14,000;
Russia (included in Europe
total): 12,000.
1
Includes IKEA Industry which accounts
76% 41%
for 12% of the total production with 44
production units in 11 countries. 2More Wood from more
sustainable sources for cotton are:
Cotton from more sustainable sources 3
Better Cotton, cotton grown to other sustainable sources 2
sustainability standards in the US and We’re on track to reach 50%
cotton from farmers working towards More sustainable cotton production by 2017. This is in addition
the Better Cotton Initiative standards. uses less water, chemical fertilisers to the requirement that all
3
More sustainable sources for wood are: and pesticides, while increasing suppliers meet our IWAY
)RUHVW6WHZDUGVKLS&RXQFLOFHUWL¿HG SUR¿WPDUJLQVIRUIDUPHUV
or recycled. Forestry Standard.

100% Forest Stewardship

Council FHUWL¿HGSDSHU
™
The IKEA Catalogue is now the largest

75% print production ever to be printed on
of all lighting 100% FSC™FHUWL¿HGSDSHUPLOOLRQ
products sold in copies of the IKEA catalogue were
FY14 were LED or printed in 32 languages.
LED compatible.
IKEA Industry
46 million
app visits
IKEA Industry manufactures wood-based
furniture and boards. It’s part of the
The IKEA catalogue app was IKEA Group and its role is to develop and
opened 46 million times. manage production capacities. In total,
IKEA Industry has 20,100 co-workers in
44 production units located at 36 sites in
11 countries.
€104 million
Donated by IKEA Foundation
The IKEA Foundation donates to projects
€1.46 billion
that work to protect children from child IKEA Food turnover
labour, provide a better life for refugee IKEA Food is comprised of the
children, and empower girls and women. IKEA Restaurant, IKEA Bistro,
PLOOLRQFKLOGUHQZLOOEHQH¿WIURP IKEA Swedish Food Market and
current IKEA Foundation-funded the IKEA co-worker restaurant.
programmes by FY15.
224
Wind turbines
We have now committed to own
and operate 224 wind turbines
around the world, up from 137
in FY13. And there are 700,000
solar panels installed on our
buildings worldwide.
9,500 products
The IKEA range consists of about 9,500 products.
Every year we renew our range, launching
about 2,000 new products. We have 15 in-house
designers and 75 external designers via contracts.

A message
from Peter
IKEA is about creating a better everyday must be well designed, functional, good quality
life for the many people. That’s our mission and be affordable for the many, not a luxury
and starting point. Last year we had about for the few.
716 million visits to our stores. While that We are guided by the principle of ‘demo-
might sound like a lot, with over seven billion cratic design’, which incorporates these four
people on the planet, most people have not elements along with sustainability. It has to be
had the opportunity to visit IKEA. about better, affordable products that improve
If we are to continue to grow and be people’s everyday lives, for example home
successful in the long term, it is essential solar systems that can enable a family in the
that we work within the limits of the planet. UK to cut their electricity bill by half.
This is why sustainability is an integral part We want to make IKEA completely sustain-
of our business strategy. We have decided able which is why we go all-in with 100%
that rather than simply reducing the harm- targets, for example for LED lighting in our
ful impact of our business, we will go further. range, key raw materials and renewable
We want to make a positive difference for energy. When you go all-in, it creates transfor-
our customers, co-workers, suppliers and the mational change.
planet. I’m very proud of our People & Planet 6RPHPD\¿QGJRLQJDOOLQDOLWWOHELWVFDU\
Positive strategy. The thinking around it is well DW¿UVWEXWWKHVFDOHRIWKHFKDOOHQJHVIDFLQJ
anchored in everything we do, whether it’s society demands bold action. When I partici-
developing products, selecting materials or pated in the People’s Climate March in New
planning our investments. And great things York in September, it was clear that action is
are happening as a consequence. what the many people want from businesses
While we have achieved a lot, we still have and government leaders. It was powerful to
a long way to go. As we move forward we will see so many different people come together –
share our plans, successes and challenges. parents, kids, grandparents, business leaders,
And by collaborating with other businesses actors and politicians. People are asking
and organisations, we can learn from one all leaders to demonstrate real action and
another and have a greater impact. move forward.
We know that our customers want to live That’s why companies have a very important
more sustainably at home and this is an area role to play. We are determined to grow our
ZKHUHZHFDQPDNHDVLJQL¿FDQWGLIIHUHQFH business by becoming people and planet posi-
We also know that people won’t accept com- tive, and always acting in a responsible way.
promise, which is why ‘sustainable’ products
Peter Agnefjäll
President and CEO, IKEA Group

A message
from Steve
Many challenges shape society and the We have made huge savings in energy, for
world of business today. More and more instance by transforming the way we light our
people are lifted out of poverty yet many stores, using LED which is the next best thing
people remain extremely poor. Our large to daylight – the bulbs are up to 85% more
global population and growing economy HI¿FLHQWWKDQFRQYHQWLRQDOOLJKWLQJ$VSDUW
demands more natural resources, like timber, of People & Planet Positive we decided that by
cotton and water. And, of course, we can September 2015, LED will be the only kind of
see very real impacts as climate change lighting we will sell. We have worked hard to
goes from a future threat to today’s reality. reduce the price of LEDs and make great qual-
But where there are challenges there are ity, long lasting lights affordable. LEDs last for
also great opportunities, and at IKEA we can up to 20 years, and last year we sold many mil-
contribute to a more sustainable world. lions of years’ worth of light! We know that to
I am co-responsible for sustainability at the make sustainability accessible for many people,
IKEA Group with 147,000 co-workers in 42 it has to be affordable and attractive – it has to
countries. At IKEA we always do our jobs be about better products and smarter choices.
knowing that we can achieve great things We want to be energy independent and have
when many people work together - and so far committed to own and operate 224 wind
we only make progress with everyone’s turbines and have installed 700,000 solar pan-
contribution. els on our buildings. These are helping us meet
I believe our sustainability strategy – our goal to generate - from renewable sources
People & Planet Positive – is solid and well- – as much energy as all the energy we use.
tested; it lays out our plans and goals, and We also want to make renewable energy more
it is well understood by our business leaders available for home-owners and, in partner-
throughout the company. Working in colla- ship with the energy company Hanergy, we’ve
boration, we have taken sustainability from a started selling affordable solar panels in some
topic that some people worked on to the focus markets, so that our customers can have their
of the many. own energy production.
Our supplier code of conduct, called IWAY, The world is in the middle of a clean revolu-
is an important example of how sustainability tion and I’m convinced any challenge we face
is integrated into the way we work. It is a can be solved with the solutions we have
core part of business relationships with our today. But to be successful, businesses like
partners and we only work with home furnish- ours need to ‘go all-in’ on sustainability, and
ing suppliers that are approved according to fully embrace the innovation and reinvention it
IWAY. We are now expanding IWAY beyond entails. Sustainability is no longer about being
our direct product suppliers and further into incrementally less bad, but it is about trans-
the supply chain. IRUPDWLRQDOFKDQJHDQGPDNLQJEXVLQHVV¿WIRU
the 21st century.
Steve Howard
&KLHI6XVWDLQDELOLW\2I¿FHU,.($*URXS

41% of wood from

The year more sustainable
in brief
sources
We’re one of the world’s largest
EX\HUV RI )6& FHUWL¿HG ZRRG LQ
€66
the retail sector. In FY14, 41% of
the wood we used was from more million saved
VXVWDLQDEOHVRXUFHV)6&FHUWL¿HGRU WKURXJKHQHUJ\HI¿FLHQF\HIIRUWVLQ
recycled). All suppliers must meet our stores and warehouses since FY10.
our IWAY Forestry Standard.
Over ¾ of cotton 100% IWAY approved EUR 104 million

from more sustain- All home furnishing suppliers IWAY donated by the
able sources
approved, being phased out or pending
a scheduled audit.
IKEA Foundation
This funded projects supporting millions
We invested EUR1.34 million in
of children and refugees in some of the
projects to help 110,000 farmers
world’s poorest communities.
improve their incomes and produce
cotton using less water and chemicals.
100%
)6&FHUWL¿HG
catalogue
Generated renewable Halved the price of one of
energy equivalent to 42% our most popular LEDARE
of the total energy used bulbs (the 40W equivalent)
58%
We’ve installed 700,000 solar panels :H¶UH PDNLQJ HQHUJ\ HI¿FLHQW /('
on our buildings, and committed to The IKEA catalogue is now the largest lighting more affordable, enabling
own and operate 224 wind turbines. print production ever to be printed many more people to live more sus-
By 2020, we will generate – from on 100% Forest Stewardship Council tainably and reduce their electricity
increase in sales of products that renewable sources - as much energy FHUWL¿HGSDSHU)6&0L[&UHGLWDQGWR ELOOV » RI DOO WKH OLJKWLQJ SURGXFWV
contribute to a more sustainable life as we use. carry the FSC logo. sold in FY14 were LED or compatible
at home, compared with FY13. with LED bulbs.

0 9 IN T RODUC T ION munities where we source materi- We measure the success of People &
als and using resources within the Planet Positive with a number of targets,
limits of the planet. Produce as which are discussed throughout the re-
People & Planet much renewable energy as the en- port. Our key performance indicators are
ergy we consume and drive energy GH¿QHG RQ SDJH DQG JLYH D VQDSVKRW
Positive strategy HI¿FLHQF\ WKURXJKRXW RXU YDOXH FKDLQ of the progress we are making towards
See page 23. our goals.
3 Take a lead in creating a better
life for the people and communities The IKEA journey
impacted by our business. Extend Our vision is to create a better every-
our supplier Code of Conduct throughout day life for the many people. Our long-
our value chain; be a good neighbour, term strategic direction, Growing IKEA
support human rights and act in the best Together, outlines our aim to create a
interest of children. See page 70. better IKEA, and to be the leader in life
at home with long-term growth and prof-
In FY14, we updated our People & Plan- itability. Sustainability is one of the four
et Positive strategy to strengthen our cornerstones of our Group strategy, and
commitments and challenge ourselves working together is an essential part of
even further. For more information this. We have already achieved a lot, but
about how and why we have made these we have big challenges ahead, and meet-
changes, see page 100. ing these would not be possible alone.
To be the leader in life at home
OBJECTIVES
*URZWKDQGORQJWHUPSUR¿WDELOLW\
A better IKEA
We want our business to have a posi- 1 Inspire and enable millions of cus-
tive impact on the world. For many years tomers to live a more sustainable
1 2 PEOPLE
we have been focused on economising with life at home. Take the lead in develop- ...through developing all co-workers, strengthening
our culture and making IKEA a great place to work
resources and helping to create a better ing and promoting products and solu- CORNERSTONES GROWING
everyday life for the many people; and a tions that enable customers to save or
better life includes living more sustainably. generate energy, reduce or sort waste,
IKEA 3 SUSTAINABILITY
...through becoming “people and planet positive”
...through offering better products and always acting in a responsible way
We have done a lot over the years but with use less or recycle water: at the lowest
at lower prices, developing a more
our People & Planet Positive strategy we possible price. See page 11. vital IKEA and becoming more accesible
4 LOWER COSTS
are taking the next big step and are going 2 Strive for resource and energy to the many people ...through lowering our overall cost structure
and simplifying the way we work
to do even more. Our strategy focuses on independence. Securing long-term
three areas: access to sustainable raw materials,
having a positive impact on the com- GOALS

PEOPLE & PLANET POSITIVE KEY PERFORMANCE INDICATORS FY13 FY14 GOAL
Enabling change
We collaborate with customers
Share of IKEA co-workers that agree with the statement that 70% 79% 95% by FY17
to develop solutions that work
‘sustainability is a natural part of my everyday work’
best for them, and their homes Share of co-workers that view IKEA as a company that takes social and 82% 1 83%2 95% by FY17
are the starting place for all environmental responsibility
of our product development. Share of suppliers that view IKEA as a company that takes social and 89% NA3 95% by FY17
environmental responsibility
Share of customers that view IKEA as a company that takes social and 41%4 41%5 70% by FY15
environmental responsibility
The average length of our supplier
relationships is currently 11 years, and A more sustainable life at home
together we discover new ways of work- 6DOHVYDOXHRISURGXFWVFODVVL¿HGDVµPRUHVXVWDLQDEOHOLIHDWKRPH¶SURGXFWV EUR 641 EUR 1,015 EUR 2,600
ing that make IKEA and their companies million million million by FY20
more sustainable. The success of IKEA Resource and energy independence
depends on the contribution of every Share of wood used in IKEA products from more sustainable sources 6 32% 41% 50% by FY17
co-worker and it’s up to all of us to take Share of cotton used in IKEA products from more sustainable sources 7 72% 76% 100% by FY15
responsibility. Lastly, we collaborate on Renewable energy produced as share of total energy consumption 37% 42% 70% by FY15,
a wide range of social and environmen- 100% by FY20
tal issues with governments, NGOs and Home furnishing materials, including packaging, made from renewable, recyclable 98% 98% 100% by FY15
other organisations. (in at least one IKEA market on an industrial scale) or recycled materials
Share of waste from stores and other IKEA operations sorted for recycling 8 88%9 89% 90% by FY15
Share of the total sales value coming from home furnishing products 39% 52% 90% by FY20
FODVVL¿HGDVµPRUHVXVWDLQDEOH¶XVLQJRXUSURGXFWVFRUHFDUG
Reduction in carbon emissions from our own operations (compared with 19% 24% 50% by FY15
FY10 baseline and relative to sales)
Reduction in relative carbon emissions from 0%10 11.4% 20% by FY15
our tier 1 HF suppliers compared to FY12 (%)
A better life for people and communities
Share of home furnishing suppliers that are IWAY approved 11 99% 98.6% 100% by FY12 and
maintained thereafter
Share of suppliers (within the IWAY scope) that are IWAY approved 68% 92% 100% by FY15
6KDUHRIWLHUKRPHIXUQLVKLQJVXEVXSSOLHUVLGHQWL¿HGDVSURYLGLQJ 20% 91% 100% by FY17
critical materials and processes and compliant with IWAY Musts
1
FY13 - Data based on 82,488 participants of our VOICE survey. Not directly comparable with FY12 as different parts of IKEA participate in VOICE each year. 2 FY14 - Data based on 87,644
participants of our VOICE survey. Not directly comparable with FY13 as different parts of IKEA participate in VOICE each year 3 This data is collected every second year. 4 FY13 - Based
Read the full strategy: on response to Brand Capital survey. Calculated as average between two questions “IKEA takes responsibility for the environment” and “IKEA takes responsibility for the community”
5
FY14 - Based on response to new question in Brand Capital survey. IKEA “is committed to operating in a way that is better for society and the environment” 6 More sustainable sources for
People & Planet Positive ZRRGDUH)RUHVW6WHZDUGVKLS&RXQFLOFHUWL¿HGRUUHF\FOHG7 More sustainable sources for cotton are: Better Cotton, cotton grown to other sustainability standards in the USA and cotton
from farmers working towards the Better Cotton Initiative standards. 8 Excludes waste wood used for energy recovery or reused in products. 9 Figures restated from FY13 due to changes
IKEA Group Sustainability

in the methodology used in Division Board, and the integration of Division Board and Divisions Flatline and Solid wood (formerly Swedspan and Swedwood). 10 Restated from FY13 (-0.01)
GXHWR¿QHWXQLQJRIFDOFXODWLRQV11 Data for home furnishing suppliers includes IKEA Industry factories. Excludes new suppliers that have up to 12 months to be approved. Suppliers
ZKHUHDQRQFRPSOLDQFHKDVEHHQLGHQWL¿HGDQGDUHZLWKLQWKHGD\SHULRGDOORZHGWRFRUUHFWWKHQRQFRPSOLDQFHDUHFDWHJRULVHGDVDSSURYHG6XSSOLHUVSHQGLQJDVFKHGXOHGDXGLWDUH
Strategy for 2020 categorised as approved (applies to 0.5% of the total in FY14). In FY14, the remaining 1.4% applies to suppliers being phased out. In China we are working with suppliers to reduce working
hours to comply with working hour limits. As an interim step, suppliers can become IWAY approved if working hours do not exceed 60 hours a week including overtime.

1 1
A more sustainable
life at home
We are in a unique position to enable millions
of people to live a more sustainable life at home.
This is a responsibility we take seriously – we are
encouraging our customers to save and generate
energy, use less water, reduce waste and live
healthy lives. Small changes made by each of
the 716 million visitors to our stores will make a
big difference to the planet. By the end of FY20,
our goal is to increase by four times the sales of
products and solutions for a more sustainable life
at home, compared with our baseline of EUR 641
million sold in FY13.
> Produc t s and solutions > Engaging customer s > Co-worker engagement

1 2 A M O R E S U S TA I N A B L E L I F E AT H O M E
SAVING
WATER
SAVES
HALF THE
WATER2
SAVING ENERGY
ENASTÅENDE
DISHWASHER
SAVES
9/10 THE 1
WATER 50%
REDUCTION
3
ENERGY
SAVING
IN ENERGY
INDUCTION
HOBS
716 million
EACH LED BULB
SAVES
€160
4
people visit our stores every year, COMPARED TO

¿QGLQJSURGXFWVDQGLGHDVWKDWLQVSLUH INCANDESCENT
a more sustainable life at home. BULBS
Many small changes add up to make a big difference for the planet and to people’s wallets.
REDUCING WASTE €500

WORTH OF FOOD IS
THROWN AWAY BY EACH
HOUSEHOLD EVERY YEAR5
Space-saving solutions Food storage containers help cut food waste,

make recycling easy. saving money on food bills.
1
Our ENASTÅENDE dishwasher uses 10 litres of water compared to 120 litres needed to wash-up using a running tap without an aerator. 2All our taps
XVHDQDHUDWRUWKDWUHGXFHVZDWHUÀRZE\XSWRFRPSDUHGZLWKWKH(8VWDQGDUGZKLOHPDLQWDLQLQJZDWHUSUHVVXUH3Our energy consuming
SURGXFWVDUHRQDYHUDJHPRUHHI¿FLHQWWKDQRXUUDQJHZDVLQ4Over the life of a bulb at average EU electricity costs. 5Based on UK and
Netherlands data (WRAP/Zero Waste Europe).

PEOPLE & PL ANET P E R F O R M A N C E i n F Y 14
P O S I T I V E TA R G E T S
Products and Take the lead in developing and promoting In FY14, sales from products for a more
solutions products and solutions that inspire and

enable people to live a more sustainable
sustainable life at home were EUR 1,015
million, compared with EUR 641 million
life at home, and achieve more than a in FY13. In FY13, we allocated EUR 20
fourfold increase in sales by August 2020, million for the development of products
compared to FY13. for a more sustainable life at home
DFURVVD¿YH\HDUSHULRG
Our energy-consuming products will be, Energy-consuming products are on aver-

RQDYHUDJHDWOHDVWPRUHHI¿FLHQW DJHPRUHHI¿FLHQWWKDQRXUUDQJHLQ
than our range was in 2008 by August 2015. 2008.
By September 2017, offer the most 7KLVVFRUHUHÀHFWVRXUSURJUHVVRQHQHUJ\
HQHUJ\HI¿FLHQWKRPHDSSOLDQFHVDWWKH HI¿FLHQF\7KHUHDUHVRPHXQFHUWDLQWLHVLQ
lowest price. our calculation methodology, and we are
reviewing this so that we can implement
a new approach from FY15.
By September 2016, all our electric hobs 55% of the electric hobs in our range are
ZLOOEHHQHUJ\HI¿FLHQWLQGXFWLRQKREV now induction hobs.
By September 2015, our entire lighting In FY14, 75% of all lighting products sold
range will switch to LED offered at the were LED or were compatible with LED
lowest price. bulbs (e.g. lamps which customers can use
with an LED bulb).
PEOPLE & PL ANET NEW targets

Offer leading water and energy saving solutions in our range of taps, showers, sink
accessories and dishwashers by September 2016 – all at the lowest possible price.
Take action in more sustainable food by enabling and encouraging a more balanced diet.
Our customers want to live more sus- customers in the following areas:
tainably at home and our research shows • Energy management – including saving,
they want IKEA’s support.* We believe that home generation, and using energy more We have added healthy living to the list Where to go for
they should not have to spend more money HI¿FLHQWO\ because we want to play our part in pro- sustainable living
or time doing so. We create products that • Water management – including saving moting and enabling healthy diets, growing We are improving our products to offer
combine form, quality, function and afford- and reuse your own food and encouraging movement even more savings on energy, water and
DELOLW\ZLWKVXVWDLQDELOLW\EHQH¿WV:HFDOO • Waste management – including reducing in your everyday tasks. Read more about waste, and options for healthy living. We
this ‘democratic design’. Our solutions for food waste, recycling and reusing how we source the food in our stores and have introduced new ways for our cus-
DPRUHVXVWDLQDEOHOLIHDWKRPHEHQH¿WRXU • Healthy living. restaurants on page 34. tomers to live more sustainably, including
*
From IKEA research: Over 70% of consumers surveyed care about sustainability. They want to live sustainably and would welcome IKEA playing an active role to support them.

ENERGY-EFFICIENT PRODUCTS FY13 FY14

We want to make it easier for our % of all lighting products which were LED or 51 75
customers to live active and healthy were compatible with LED bulbs
lives. Here are two examples: % of electric hobs available in range that are 43 55
induction hobs
solar panels - purchased and installed in Energy

collaboration with Hanergy - and electric Managing energy use to reduce green-
bikes, and we are working with our cus- house gas emissions plays a really impor-
tomers to develop ideas for eating, living, tant part in living more sustainably. Every
sleeping and working more sustainably – action helps, whether it is changing a light
see page 19. bulb or installing solar panels on the roof.
We measure sales of products that We are reducing the amount of en-
enable people to live more sustainably at ergy our electrical products use, including
home. This enables us to improve custom-
er information and track progress towards
our target to increase sales of these prod-
XFWV,Q)<SURGXFWVFODVVL¿HGDVµPRUH S A L E S VA L U E O F
sustainable life at home’ products had a PRODUC T S CL A SSIF IED
combined sales value of EUR 1,015 million, A S “ M O R E S U S TA I N A B L E
L I F E AT H O M E ” P R O D U C T S
compared with EUR 641 million in FY13. (m i l l i o n E U R)
This rise is due in part to the increase in
Promoting WKHQXPEHURISURGXFWVFODVVL¿HGDVHQD-
healthy living bling people to live a more sustainable life
at home. It is also due to focus in our retail
EXERCISING ON THE MOVE E AT H E A LT H Y organisation on communicating and mar-
keting these products to customers. Sales
The FOLKVÄNLIG rechargeable We are combining healthy food options
RISURGXFWVFODVVL¿HGDVµPRUHVXVWDLQDEOH
electric bicycle is on sale at some in stores with products that enable
stores in Sweden and Austria. These our customers to grow their own food life at home’ products grew at more than
battery-assisted bikes are ideal at home. For example, our ÄPPLARÖ the average across our whole range.
for covering great distances with storage benches and wall panels make AUG 2,564
Sustainability is integral to our product 2020
less effort than a normal bike - gardening possible in a small space,
design, alongside form, function, quality GOAL
and they are emissions-free! DOORZLQJRXUJUHHQ¿QJHUHGFXVWRPHUV
to plant and grow their own herbs and low price. These are all important to FY14 1,015
and plants. us, and we do not compromise on any. We FY13 641
call this ‘democratic design’.

1 5 A M O R E S U S TA I N A B L E L I F E AT H O M E lighting, televisions and appliances such as
hobs, fridges, ovens and dishwashers. For
What will the kitchen example, our new VÄLGJORD dishwasher
LV$UDWHGIRUHQHUJ\HI¿FLHQF\,WVDYHV
of the future look like both energy and water by washing up to
15 place settings at once using only 7.5
Society never stands still, always They produced conceptual ideas
litres of water.
evolving new ways of living. We want based on sustainable behaviour
to understand how sustainable living in the kitchen of the future, encour- )URP PRUH HI¿FLHQW SRWV DQG SDQV
might change so that we can con- aging life around food through a to insulating window coverings, here are
tinue to provide relevant products multi-functional, adaptive space: some examples of our products that save
and solutions. That’s why we wanted equally suited to cooking, working
to explore what the kitchen of the and socialising. energy indirectly:
future could look like. We are now developing proto- Our SENSUELL cookware works on all
We worked with the people who types. We will show these in Milan hob types and retains heat really well, us-
might have the answer – students at during the spring and summer of
ing less energy to cook a delicious dinner.
Lund University in Sweden and Eind- 2015, coinciding with the Design
hoven University in the Netherlands. Week and the World Expo 2015. In FY14, 55% of the electric hobs in our
range were induction models, compared
with 43% in FY13. The great thing about
induction technology is that energy is
transferred directly to pans and pots, so We want our customers
less heat is wasted. to be able to generate their
Several of our taps, including our new own power at home.
DANNSKÄR mixer tap, feature a ‘cold start’
energy-saving design. It automatically
releases only cold water when the lever is Our solar panel purchase and installa-
lifted straight up, without the need to turn tion service in collaboration with Hanergy
the tap to the cold position. This uses 30% helps our customers save up to 50% on
less hot water over time compared to taps their energy bills – see page 17.
without a cold start function and saves the At the end of FY14, our energy-con-
project mässa
iJate
Behaviors
of 2025
We’ll navJy Zith energy used to heat it. suming products are on average 50%
technolo nses.
project mässa
all our se We’ll need the kitchen The HOPPVALS window blind helps PRUHHI¿FLHQWWKDQRXUUDQJHLQ7KLV
Behaviors
of 2025
project mässa
Even simp
equipped
le devices
with CPUs
will be
be networked
and senso
.
rs
Behaviors
to be our sanctuary. insulate rooms against heat loss, offering indicates that we are on track, and we have
and will all
Everything
will be quan
inform
tiÀed and
ation than
of 2025
We’ll be doinJ more

a potential 22% energy saving.* reached our goal a year early, although
more
we’ll have So
to do with.
in less space.
we know what the
be
ology will
the best techn e: it will invisibly We’ll be spending more time at
trusiv
most unob unicating home, and the kitchen is where
lives, comm
improve our
We are working on a range of fea- uncertainties in the calculation methodol-

sound, smell we will be at our most active,
gh touch,
with throu social and expressive. We will
sight.
as well as prepare, cook and eat inmässa
project
the
project mässa
kitchen. But we will also do work
tinJ
The majority of us will be
We’ll be Zasurces.
there - far more than we do now.
tures to enable more effective use of RJ\PHDQWKDWWKLV¿JXUHLVDQHVWLPDWLRQ

living in
ally
We’ll habitu t
cities. Households will be And it will be the most important
smaller,
and the increasing cost room in the house for families to
Behaviors of urban Behaviors
property will force us to of 2025
get together socially.
of 2025 live in
order instan y.
smaller spaces. We’ll be
far less reso

working
energy around the home. For example, ,PSURYHPHQWVLQWKHHQHUJ\HI¿FLHQF\RI

from home far more than
we
do now: most often doing
so in
home deliver
the kitchen, Rooms will
need to
be multifunctional and
quickly
we are launching energy management lighting products remain the main reason
adaptable, to change with
our
needs throughout the day.
know it will have

conception of Shopping as we
The 20th century d. We will
as seemingly dramatically change g and
water and energy
meters in Sweden in FY15 and plan to for this increase - see feature on page 16.
learnin
es will have come go to shops for
inÀnite resourc our ordering will
inspiration, but ted
to a close. y and automa
be done digitall
will have items
expensive, trucks and drones
Food will be more homes whene
ver
expand sales to other locations.

cuts of meat, deliver ed to our
especially prime
our cooking within minutes.
which will change
and storing habits.
*
Compared to a window with no curtain.

Encouraging the switch

to LED lighting
Using less energy reduces green- AMOUN T OF ENERG Y NEEDED
house gas emissions. It also saves TO PRODUCE 400L M1
our customers money on their
energy bills. We focus on reducing
costs so that more people can afford
HQHUJ\HI¿FLHQWSURGXFWV)RUH[DP-
40W
ple, our LEDARE LED light bulbs use
85% less energy and last 20 times
longer than incandescent bulbs.
In FY14, we halved the price of
one of our most popular LED bulbs
(the 40W equivalent), which con-
tributed to many more customers
LQYHVWLQJLQWKHVHHQHUJ\HI¿FLHQW
light sources. We launched nine new
LED bulbs and about 25 new LED
products in FY14. 8.5W
6.3W
In FY08, 25% of the bulbs we
Through the Brighter Lives for renewable energy and primary educa-
sold were low energy and 75% were
Refugees project (see page 94), the tion in refugee camps across Africa,
halogen and incandescent. This
IKEA Foundation donated EUR 1 to the $VLDDQGWKH0LGGOH(DVW,QLWV¿UVW
trend has now reversed: 68% of the Old incan- 2011 LEDARE 2014 LEDARE UN Refugee Agency (UNHCR) for every year, this campaign raised EUR 7.7
bulbs sold in FY14 were low energy descent LED LED
LEDARE light bulb sold in February and million for UNHCR, while encouraging
and LED, and 75% of all lighting
March 2014 – providing sustainable PRUHSHRSOHWRDGRSWHQHUJ\HI¿FLHQW
products sold in FY14 were LED or
lighting, LEDs.
were compatible with LED bulbs
(compared with 51% in FY13). 1
For comparison, a low-energy bulb gives about
40 lm for each watt.

1 7 A M O R E S U S TA I N A B L E L I F E AT H O M E Water We have already increased water
Water is precious and, in some parts of HI¿FLHQF\E\XSWRDFURVVRXUGLVK-
the world, a scarce resource. Energy is washer range, compared with our range
required to clean, heat and transport wa- in 2008. We are working on new ways to
ter. We enable our customers to use less reduce water consumption. This includes
water, without compromising the quality using grey water from showers, baths and
of our products. Our taps and dishwash- EDVLQV DQG ZDWHU ¿OWUDWLRQ V\VWHPV IRU
ers are designed to save water. Our cus- showers.
tomers can also use less water by using Our washing up bowls and drainers of-
D ZDWHUHI¿FLHQW GLVKZDVKHU UDWKHU WKDQ fer simple ways to save water and energy.
washing up by hand. The bowls reduce the amount of hot water
needed to wash dishes (saving energy),
and cold water used for washing fruit and
All IKEA taps use a pressure vegetables.
compensating aerator. This reduces
the consumption of water by
up to 50% compared with EU
Making home solar standard taps, without affecting
the customer’s experience.
affordable
“There’s really no excuse not to install installing solar panels. The payback Each IKEA tap used in the average Euro-
solar in your home,” says Alan Cotton, time for our solar panels can be as lit-
pean household saves between 1,800 and
who has Hanergy solar panels sold tle as seven years and we expect this
through IKEA on his roof near South- to fall as energy prices rise. After that 3,000 litres of water per year*. This re-
ampton in the UK. point the system will produce renew- duces costs for customers through lower
“Installation was so easy. It took just able energy for free and the panels energy bills for hot water and lower water
one day to get it up and running, and have a lifespan of at least 25 years.
we’ve halved our electricity bills within We’ve teamed up with global solar bills where water use is metered. In FY14,
two months. It’s changed our lives.” energy specialist Hanergy to offer the taps we sold resulted in a combined
Solar energy is a great way for in-store advice and easy installation. saving of between 173 and 288 million
families and businesses to reduce IKEA FAMILY members get big dis-
litres of water, compared with convention-
energy costs and cut their carbon counts on the price of a system, and
emissions. During FY14 we completed a solar loan enables customers to pay al taps without an aerator.
the roll-out of our solar panel offer to for the system with the money earned From September 2014, four of our
all 18 UK stores at prices affordable from UK feed-in tariffs. There is also
bathroom taps had a cold start function.
to people with smaller homes than the a handy monitoring app that enables
average solar customers. This enables users to keep an eye on their energy This saves hot water, which saves ener-
more people to invest in solar, some- consumption via their mobile phone. gy (see page 15). All new bathroom taps
thing which was previously out of We are rolling out the service at will be equipped with cold start, and from
their reach. our stores in the Netherlands and
An average UK household can save Switzerland, and will cover six more September 2015, so will one model of
up to 50% on their electricity bills by countries in FY15 and beyond. kitchen taps without an aerator.
* Compared with EU standard taps without an aerator.

Waste away 290 million* fewer batteries as a

We want to help reduce or stop waste from result, if they use their new batteries for
homes. That is why we provide our cus- their full life span. We plan to do this inter-
tomers with products, services and advice nationally, using our Swedish experience to
that make it easy for them to recycle more make sure we engage the greatest number
and waste less. of customers.
Food containers are good for storage
but can also reduce waste and save mon-
ey. For example, our FÖRTROLIG jars can In an increasing
be used to store, reheat and serve food, number of markets, we offer
all in a single container. This reduces food customers the opportunity to
waste and saves on washing up. recycle, sell or donate their
Our space-saving kitchen furniture has furniture at the end of its life.
integrated sorting systems, which make
it easier to recycle. Our RATIONELL and
VARIERA waste sorting systems can be For example, in Romania there is no in-
used with IKEA or non-IKEA kitchens, and frastructure for people to recycle their
even outside the kitchen. furniture. IKEA Bucharest invited custom-
We sell our LADDA rechargeable bat- ers to bring in old furniture, co-operating
teries pre-charged and ready to use. In with a local NGOs to recycle or redistrib-
FY14, we experimented by selling only ute it. In four weeks, 22 tonnes of furni-
LADDA batteries in our Swedish stores. ture was collected. See page 60 for more
The many more customers that bought information about our furniture take-back
LADDA instead of single-use batteries programmes.
during this period will theoretically throw
* Calculations are based on all batteries being recharged 500 times.

Engaging customers Take a lead, together with our customers Six out of eight test families have complet-
and others in society, in re-thinking the ed their time in the Living Lab trying out
nature of future homes and communities the Flexible Space concept – see page 20.
to provide examples of attractive, afford-
able and sustainable living.
Walking the talk with a

sustainable cook-off
We inform our customers about how IKEA Food organic products, producing
our products can save energy, water zero waste and using minimal water.
and money, and reduce waste, but can Customers voted for their favourite
we prove it? and Chef Damien, from recipe-sharing
Our success at encouraging a more sus- ter use, but less than half of that number In April 2014, 29 IKEA stores in website 750g.com, chose the winner.
France participated in a ‘Zero Waste The cook-off was followed on social
tainable life at home depends on us get- was aware that IKEA had the solutions. Cook-Off’ to demonstrate how IKEA media, with several sustainability-
ting our customers excited and engaged. We have set goals to increase customer products can be used to create deli- focused posts on blogs, and is es-
awareness of this. cious, sustainable food. timated to have reached almost 13
Each store formed a team consist- million unique visitors with messages
Increasing customer We spend a lot of time learning how
ing of a local food blogger, an IKEA co- about more sustainable food. IKEA
engagement our customers live by visiting homes all worker and a blog follower. The teams France was awarded the Sustainability
In FY13, our consumer tracker survey over the world. This helps us understand cooked simultaneously across all 29 Leadership Prize at the TOP/COM Con-
stores. They each created 50 sustain- sumer Awards 2014 for this innovative
showed that more than 85% of consumers how we can enable people to lead more
able canapés every hour, integrating promotion of sustainable cooking.
wanted to reduce energy, waste and wa- sustainable lives by designing suitable

2 0 A M O R E S U S TA I N A B L E L I F E AT H O M E Future homes
The Living Lab is our test apartment. It’s
solutions and products, and then commu- ,Q)HEUXDU\ZHODXQFKHGRXU¿UVW where we invite people to come and live
QLFDWLQJWKHLUPDQ\EHQH¿WV ever sustainability marketing campaign, in and help us evaluate new concepts for an
We know that our co-workers are our the UK and Ireland. The campaign includ- easier and more sustainable life at home.
best ambassadors and we make sure that ed a television advert and used radio and Our focus is on what we call Flexible Liv-
they are inspired by our products so that
they can tell our customers about the ben-
social media to give tips and ideas to our
customers on how to make their homes
ing and one of its concepts is Flexible
Space, which enables living comfortably millions
H¿WVVHHSDJH PRUH ZDVWH HQHUJ\ DQG ZDWHU HI¿FLHQW in a smaller space. We are experimenting of IKEA FAMILY members around the
world receive information and discounts
During the campaign, sales of LED bulbs with moveable walls, so that rooms can be to encourage them to live a more
Inspiring our customers to more than tripled, and the number of visits converted from one function to another as sustainable life at home.
live a more sustainable life to IKEA UK’s People & Planet Positive web needs change. For example, a living room
at home pages grew by over 30 times. We also held could double as a bedroom, saving both
We include sustainability information on an ‘Ideas Festival’ in our stores with work- money and energy. solar installation service in collabora-
many of our price tags, on our website, shops, activities and promotions show- We are testing Flexible Living with tion with our partner Hanergy (see page
in-store and in our catalogue. IKEA stores casing a more sustainable life at home. eight families of different nationalities and 17). We communicate regularly with IKEA
around the world tailor sustainability mes- Co-workers took the lead in inspiring cus- background – asking them to host a party FAMILY members across all countries,
sages to the needs of their customers. tomers with ideas for saving energy and or dinner and have a sleepover with guests telling them about our ambitions to be
For example, IKEA Poland provides online water and reducing waste in ways that en- in our Living Lab. We record their emotion- a sustainable company, and providing
guides to LEDARE lights and Lyocell fabrics hance their quality of life. al responses and ask them about how they inspiration and ideas for a sustainable life.
– highlighting their practical and environ- used the different solutions. The reactions We have developed two new ideas to
PHQWDOEHQH¿WV have been very positive, and our next step inspire IKEA FAMILY members to live a
ZLOOEHWRUH¿QHWKHLGHDVXVLQJIHHGEDFN more sustainable life at home:
from the families. • The ‘Mega Event’ is a sustainability-
themed day held at a single store, de-
IKEA Family signed to engage, inspire and inform.
Millions of customers worldwide are part Each event can include sustainability-
of the IKEA FAMILY - our club for loyal WKHPHG DFWLYLWLHV RIIHUV RQ VSHFL¿F
FXVWRPHUV%HQH¿WVWRPHPEHUVLQFOXGH products, and free LED bulbs to IKEA
special prices on the IKEA FAMILY prod- FAMILY members. In FY14, 19 IKEA
uct ranges and selected parts of the stores in the UK and Ireland held
IKEA range. We also like to engage IKEA Mega Events. Many more countries
FAMILY members in our sustainability plan to run these events in FY15.
efforts. • The Home Furnishing Workshop
Products in the IKEA FAMILY range, ranges from a quick 10-minute work-
such as a cookbook for leftover food, shop to a longer in-depth discussion.
can support our customers to live more It inspires and enables IKEA FAMILY
sustainably. In the UK, IKEA FAMILY members to make changes to the
members get a discount on our home way they live.

Co-worker Enable our co-workers to live a more sustainable life at home by using our solutions or
knowledge for reducing energy, water and waste at home, through a dedicated global
engagement project beginning in 2014.
70% in FY13 and FY12. At some stores, energy or reduce waste in their homes.
the change was greater. For example, at To support the project, we produced a
IKEA Houston, 80% of co-workers now co-worker engagement handbook, which
agree sustainability is a natural everyday provides recommendations on everything
part of their work, compared with 66% from budgeting to sharing project results.
previously. In FY14, 10 countries joined the project,
We think activities at individual stores engaging 1,773 co-workers. These coun-
combined with the global Co-worker En- tries will engage more co-workers in FY15,
gagement Project (see below) are increas- alongside a further 10 countries that are
ing our co-workers’ awareness of how we planning to join. We expect thousands of
work with sustainability. IKEA co-workers to join the movement in
Read more about how: the coming years.
• Our Product Sustainability Scorecard Co-workers involved in the project
enables our product developers to share their experiences on our internal
create more sustainable products, social media platform and Facebook. In
on page 38. March and April 2014, the co-worker en-
• We are engaging co-workers in making gagement project group was the most ac-
sustainability part of the everyday life at tive of all our social media groups within
IKEA, on page 44. IKEA globally.
• We are improving our stores through Our aim is for the project to reach all
the Sustainable Store Project on our co-workers – either as ambassadors
page 50. or by being inspired by their co-workers -
Our co-workers are essential to our vi- feels proud to work for us and feels able by FY16. We want them to understand the
sion for more a sustainable life at home. to contribute to making IKEA people and Co-worker Engagement Project relevance of sustainability in their person-
They are ambassadors for our products planet positive. We launched our global More Sustain- al and work lives, in turn increasing sales
and services, helping customers live more Each year we run an online survey for able Life at Home Co-worker Engagement of products and solutions that inspire and
sustainable lives. The more our co-workers all co-workers in the IKEA Group – read Project in FY14. This is designed to build enable customers to live a more sustain-
know about the environmental and cost more on page 77. In FY14, 79% of co- co-worker knowledge about living a more able life at home. Read more about our ex-
savings of our products, the better they workers agreed with the statement “within sustainable life at home. perience with the Co-worker Engagement
can communicate with our customers. It is my department sustainability is a natural Co-workers in each country and store Project around the world on page 22.
important to us that every IKEA co-worker part in everyday work”, compared with can choose IKEA products to save water,

CREATING INSPIRED
AMBASSADORS F O R
Around the world, our co-workers S U S TA I N A B L E L I V I N G
are becoming better prepared to be
ambassadors for all the things we are Test and tell. This was the motto of the
project that led to 313 UK co-workers being
doing to become more sustainable, chosen to become ambassadors for a more
especially in enabling our customers to sustainable life at home. They were given a
live more sustainable lives at home. budget of GBP 450 (EUR 560) towards IKEA
Sarah Garwell
products that save water, consume less
energy or reduce waste in their homes over
a four-month period.
)ROORZLQJWKH¿UVWURXQGRIWKHSURMHFW
scores from our annual online survey measur-
ing co-workers’ opinions about our approach
WRVXVWDLQDELOLW\URVHVLJQL¿FDQWO\ZHWKLQN
directly as a result of this initiative. UK sales
of energy-, water- and waste-saving products
rose by 29% compared with FY13.
Our Contact Centre co-workers worked Chris Messer

particularly hard, delivering some great
results. Sarah Garwell saved more than 600
litres of water a week by changing her family’s
behaviour to have more showers instead of
baths. Over a year this would work out to a
saving of 31,200 litres and a saving of GBP
120 (EUR 150) per year on energy. Chris
Messer saved over GBP 216 (EUR 270) per
year by upgrading his old oven to an A-rated
appliance. Simon Blakemore saved GBP 21
(EUR 26) a month on his energy bills – GBP
A global movement 252 (EUR 316) per year!
Simon Blakemore
towards sustainable living
Our More Sustainable Life at Home for management teams, and aim “I was easily the worst at sustainability
Co-worker Engagement Project has to train all co-workers by the end in the entire store. I recycled nothing,
created much of this progress: of FY15 wasted food and plugged in everything
• Stores in the Netherlands organ- IRUKRXUVRQHQG,KRUUL¿HGWKHRWKHU
• Co-workers in Canada wanted to ised activities around national ambassadors with my disregard for the
learn about the sustainability sustainability day planet. But now the whole store – me
features of our products and how • Co-workers in Russia have been included – is infected with enthusiasm.
this links to our identity discussing ways to create ‘zero We’re all committed to the cause.”
• Stores in Italy have rolled out ODQG¿OO¶OXQFKHV
sustainability training workshops Carole Gutherson, Unit Project Leader for Co-
worker Engagement Project, IKEA Gateshead, UK.

2 3
Resource and energy

independence
We want to be less dependent on conventional
supplies of natural resources and energy. This
will help us reduce the potential risks to our
business from climate change and keep costs low
so that we can continue offering our customers
inspiring, functional and sustainable products
at affordable prices.
We have the most control over our own
operations and our products. By focusing on
where we can make the biggest difference, we
DUHVHHLQJVLJQL¿FDQWLPSURYHPHQWVLQHI¿FLHQF\
across our buildings. Our products are continually
assessed to ensure that they are better for
people and the planet.
> Responsible sourcing > More sustainable produc t s > More sustainable buildings and transpor t > Energy and water in our supply chain

IKEA GROUP STORES

AND BUILDINGS
42% WE PRODUCED
RENEWABLE ENERGY
EQUIVALENT TO
42% OF OUR TOTAL
ENERGY USE
EFFICIENT TRANSPORT
15%
MORE ENERGY
EFFICIENT COMPARED
WITH FY10
BILLY
BOOKCASE
PRODUCT
30% LIGHTER
INNOVATION 89%
OUR 11 CRITERIA
TO EVALUATE PRODUCTS OF WASTE RECYCLED
More from less
64%
Renewable materials
Reused and recycled materials
FILL RATE Materials from more sustainable
sources
SKARPÖ CHAIR
Recyclability at end of life
Quality
100% MORE
SUSTAINABLE
58%
7UDQVSRUWHI¿FLHQW
Energy use in production RECYCLED
SOURCES
41%
PLASTIC
DIRECT DELIVERY FROM Renewable energy in production
SUPPLIERS TO STORES Raw-material utilisation
SAVING CO2 OF WOOD
3/4
Sustainable life at home
FROM MORE
SUSTAINABLE
SOURCES
OF COTTON
FROM MORE
19% SUSTAINABLE
.
es
SOURCES
li v
IMPROVEMENT IN
s
e’
ENERGY EFFICIENCY
pl
o
pe
COMPARED WITH
M
FY12
an to
y
sm nd
all e ta
SUPPLIERS GO RENEWABLE ch p l an
an g
es a r the
dd e fo
up t o m
ake a big dif f e r e nc

Responsible By August 2015, all cotton used in IKEA We sourced 76% of our cotton from
sourcing products will be sourced from more
sustainable sources such as Better Cotton,
more sustainable sources* in FY14,
up from 72% in FY13. We support the
and we will continuously investigate com- Better Cotton Initiative to train cotton
SOHPHQWDU\¿EUHVZLWKLPSURYHGVXVWDLQ- farmers around the world in more
ability performance relative to cotton. sustainable farming methods.
*
More sustainable sources for cotton are: Better
Cotton, cotton grown to other sustainability standards
in the USA and cotton from farmers working towards
the Better Cotton Initiative standards.
By August 2017, all of the leather we use From FY14 we require greater chain of
will have full chain of custody and be custody transparency in high risk areas.
produced according to standards that help We have developed draft guidelines for
protect forests and respect human rights responsible leather sourcing that are
and animal welfare. under implementation.
By August 2017, at least 50% of our wood We sourced 41% of all wood from
will come from more sustainable sources. more sustainable sources*, up from
7KHVHVRXUFHVDUHFXUUHQWO\GH¿QHGDV 32% in FY13.
)6&FHUWL¿HGRUUHF\FOHGZRRG
*
More sustainable sources for wood are: Forest
6WHZDUGVKLS&RXQFLOFHUWL¿HGRUUHF\FOHG
By December 2015 all palm oil, currently 3DOPRLOIURPVHJUHJDWHGFHUWL¿HGVRXUFHV

used in home furnishing products such made up 32% of the amount we purchased
as candles or as a food ingredient, will in FY14.
HLWKHUFRPHIURPFHUWL¿HGVHJUHJDWHG
sustainable sources or be replaced by
more sustainable raw materials.
We aim to make a positive difference to able and reliable supply.

industries that produce the key raw ma- We buy a lot of wood and cotton and P O S I T I V E TA R G E T S
terials in our products. By working closely focus our attention on these materials.
with our suppliers and other partners, we Other important materials are leather, By August 2020, we aim to source 100% of our wood, paper and cardboard from
try to ensure the materials we use are pro- SDOPRLOFRIIHHFRFRDDQGQDWXUDO¿EUHV more sustainable sources.
duced using methods that are better for including rattan, down and feathers. Al-
7KHVHVRXUFHVDUHFXUUHQWO\GH¿QHGDV)6&FHUWL¿HGRUUHF\FOHGZRRG2QFHWKHPRUHVXVWDLQDEOH
people and the environment. This helps us though we purchase relatively small quan- sources goal has been met, we will re-evaluate this criteria.
to safeguard valuable natural resources tities of these, we take seriously the poten-
for future generations and sustains our tial impacts of their production on people,
business by providing access to an afford- communities and the environment.

2 6 R ESOURC E AND ENERG Y INDEPENDENC E Wood
Wood is essential for our business. And it is WOOD FROM MOR E
a sustainable material, as long as it comes S U S TA I N A B L E S O U R C E S *
(% w o o d s o u r c e d )
from responsibly managed forests. Wood
T O TA L W O O D I N is renewable, recyclable and biodegradable
IKE A PRODUC T S and expanding responsibly managed
(m i l l i o n m 3 r w e) * 41.4
forests is better for people and the planet.
FY14 15.50
FY13 13.97 32.4
As one of the largest
FY12 13.56
users of wood in the retail sector,
FY11 13.78 22.6
ZHFDQXVHRXULQÀXHQFHWR
FY10 12.32 FY14
change things for the better. 15.8 16.2
FY13
*
Roundwood equivalent (rwe) is the volume of roundwood (logs) required FY12
to produce our products. Data covers all solid wood and wood-based
board used in IKEA products, but excludes wood used in packaging and FY11
printing and paper used in products such as napkins. By August 2017, at least 50% of our wood
FY10
will come from more sustainable sources.
This means wood that is recycled or certi- *
)URPIRUHVWVFHUWL¿HGWRWKH)6&)RUHVW
¿HG WR )RUHVW 6WHZDUGVKLS &RXQFLO )6& Management standard and recycled wood.
COUN T R IES WE SOURCE T Y P E S O F W O O D S O U R C E D (%) Includes solid wood and wood-based board.
standards. And by August 2020, our tar-
W O O D F R O M F Y 14
(% w o o d s o u r c e d ) get is to buy 100% from more sustainable
sources.
Our ‘forest positive’ approach (see page
29) goes beyond the immediate needs of Performance in FY14
our business to help change how forests The equivalent of 15.5 million m3 of round-
are managed in the long term. We do this wood was sourced for the solid wood
by working with partners, such as the glob- and wood-based board materials in IKEA
al conservation organisation WWF, to im- products in FY14 (not including paper and
prove forestry management practices and packaging), 11% more than in FY13, due
Poland 25.8% Solid wood 42% WR¿JKWLOOHJDOORJJLQJDQGGHIRUHVWDWLRQ to business growth. The proportion from
Lithuania 7.9% Wood based board 58% Suppliers must comply with our IWAY PRUH VXVWDLQDEOH VRXUFHV )6& FHUWL¿HG
Sweden 7.0% Forestry Standard so that we can ensure or recycled) increased to 41.4%, of which
Germany 6.5% that the bamboo, board material and solid LV )6& FHUWL¿HG :H DUH RQ WUDFN
Russia 6.5% wood in our products has not been grown for 50% of our total wood volume to come
Romania 6.1% or harvested in a way that harms the from more sustainable sources by FY17.
China 4.9% environment. We support suppliers that Of the wood volumes that underwent an
France 3.2% don’t meet our standards, but if they show IKEA audit, 99% complied with IKEA mini-
Other countries <3.0% 32.1% no improvement we are forced to end mum forestry requirements.
the relationship. We will continue to focus on improving

2 0
AUDITS OF OUR WOOD SUPPLY FY10 FY11 FY12 FY13 FY14

practices in areas where there is a high- • Annual auditing by accredited FSC certi- CHAIN
er risk of illegal or irresponsible forestry ¿FDWLRQ ERGLHV RI VXSSOLHUV ZKR KDYH
Share of IKEA suppliers that are 20.3% 34.9% 42.2% 52.5% 66.1%
practices, such as Eastern Europe, Great- )6&&KDLQRI&XVWRG\&R&FHUWL¿FDWLRQ )6&&KDLQRI&XVWRG\FHUWL¿HG
er China and South East Asia. In these • IKEA audits of wood suppliers who are
Share of total wood volume from 47.0% 62.0% 63.5% 84.5% 94.8%
areas, we have set a separate target to handling wood not covered by FSC CoC )6&&KDLQRI&XVWRG\FHUWL¿HG
reach 100% wood from more sustainable FHUWL¿FDWLRQ DUH FDUULHG RXW E\ XV RU suppliers
sources by FY17. occasionally by independent auditors
Number of IKEA audits — under 124 139 116 149 143
• IKEA wood supply chain audits for high- IWAY Forestry Standard and IKEA (7) (5) (5) (11) (4)
er risk areas, which can cover the entire wood supply chain audits (number
All co-workers who supply chain back to the forest. performed by 3rd party auditors)
purchase products containing wood Share of total wood volume from 10.3% 12.3% 17.3% 12.4% 19.7%
must be trained as part of their Using these procedures, most of our tim- suppliers which underwent an
IKEA audit during the year
professional development. ber suppliers are audited annually (almost
100% in FY14). A small number of suppli- Wood volumes that underwent an 97.0% 94.0% 95.2% 99.1% 99.0%
ers that are considered low risk because IKEA audit that comply with IKEA
minimum forestry requirements
During FY14, we trained 250 co-workers of their location, or the type of timber they
on our standards, relevant laws and FSC provide, are audited every two years. Share of total wood volume 57.3% 74.3% 80.8% 97.8% 94.8%
from suppliers audited during
FHUWL¿FDWLRQ8SJUDGHVWRRXU,7V\VWHPV 7KH&KDLQRI&XVWRG\VWDQGDUGYHUL¿HV
the year (as part of FSC chain
will improve our data and due diligence )6&FHUWL¿HGPDWHULDODQGSURGXFWVDQGLV of custody audit or IKEA audit)
processes, further supporting our co- designed to prevent illegally logged and
workers in all their responsible roles. other types of unwanted wood from en-
We use paper in a wide range of prod- tering the supply chain. We encourage all
XFWV DQG RI¿FH VXSSOLHV LQFOXGLQJ SDFN- manufacturers, processors and traders of ,Q )HEUXDU\ WKH )6& FHUWL¿FDWH a solution that supports our ambition to
aging, products in our paper shop, our products containing wood to achieve certi- for our forestry operations in Karelia, create a better life for workers through-
catalogues, and napkins and cups in our ¿FDWLRQDFFRUGLQJWRWKH)6&&KDLQRI&XV- Northern Europe, was temporarily sus- out our supply chain. For example, we are
restaurants. In FY14 we mapped all the tody standard by undergoing regular third- pended. However, the temporary sus- partnering with WWF to support small-
different ways we use paper across the party audits – this is one way for suppliers pension was withdrawn a few weeks later holders who produce acacia and rattan in
IKEA Group and evaluated the relevant to demonstrate IWAY compliance. after the appeal committee judged that a Cambodia, Laos and Vietnam to improve
sustainability challenges for each. This The proportion of suppliers that are number of the deviations were incorrectly their forest management, and to move
work will enable us to align our paper and &KDLQRI&XVWRG\FHUWL¿HGLQFUHDVHGIURP FODVVL¿HG WRZDUGV)6&FHUWL¿FDWLRQLQ/DRVDQG9LHW-
wood principles. In FY14, we achieved 52.5% in FY13 to 66.1% in FY14. These Working with smallholders can present nam (see page 30).
)6&FHUWL¿FDWLRQLQDOOHGLWLRQVRIWKH suppliers provided over 90% of the vol- VLJQL¿FDQW FKDOOHQJHV 7KH KROGLQJV PD\
IKEA catalogue (see page 68). ume of wood we bought, although not all comprise just one or two hectares of for- Government relations
the wood we received from each supplier est and meeting our requirements may be )RUHVW PDQDJHPHQW LV KHDYLO\ LQÀXHQFHG
Auditing and compliance ZDV)6&FHUWL¿HG7KHVXSSOLHUVQRWFHUWL- YHU\GLI¿FXOWFRVWO\RULPSRVVLEOHIRUWKH by government policies and regulations. We
Auditing in our timber supply chain ¿HGWHQGWREHWKRVHWKDWSURYLGHDYHU\ smallholders. But excluding them from our collaborate with governments so that we
includes: small proportion of our wood. supply chain is unfair. We are working on can improve forest management practices

0 8
I WAY - F O R E S T R Y S TA N D A R D
IWAY, the Code of Conduct for all We update IWAY regularly, and in
,.($VXSSOLHUVFRQWDLQVVSHFL¿F FY13 added new requirements for
criteria for wood and board suppliers. bamboo suppliers.
The IWAY Forestry Standard states
that these materials should: Forest Stewardship Council (FSC)
standards
• Only come from forests that
have been legally harvested FSC principles and criteria
• Not come from forestry outline best practices for
operations engaged in forest- forest management. These
UHODWHGVRFLDOFRQÀLFWV are then applied regionally and
• Not be harvested in nationally, taking into account local
JHRJUDSKLFDOO\LGHQWL¿HGLQWDFW conditions, stakeholder
0DNLQJIRUHVWFHUWL¿FDWLRQ natural forests (INF) or high interests and forest types. The
conservation value forests, 10 principles outline the FSC’s vision
the norm in Russian Siberia XQOHVVWKH\DUHFHUWL¿HGDV and include:
responsibly managed
• Not be harvested from natural • Protecting the natural
“By changing the attitudes of our forest managers (normally second
forests in the tropical and sub- environment and its biodiversity
suppliers in China, we have boosted or third tier suppliers and therefore
tropical regions being converted • Ensuring long-term economic
GHPDQGIRUFHUWL¿FDWLRQLQ5XVVLD removed from IKEA), we have been
to plantations or for non-forest DQGVRFLDOEHQH¿WVIURPWKH
where they source their wood. The working with our direct suppliers to
use forest
entire wood supply chain now un- promote better forest management.
• 1RWFRPHIURPRI¿FLDOO\ • Upholding the rights of the
derstands that good forest manage- Any wood in the products they sell us
recognised and geo-graphically forest’s indigenous communities
ment is critical to doing business with PXVWQRZEHFHUWL¿HGWR)RUHVW6WHZ-
LGHQWL¿HGFRPPHUFLDOJHQHWLFDOO\ • Implementing and monitoring
IKEA.” ardship Council (FSC) standards.
PRGL¿HG*0WUHHSODQWDWLRQV a comprehensive forest
Mikhail Tarasov is Greater China Kristina Svyazhina works for IKEA
management plan.
Forestry Manager for IKEA and, to- supplier Liaoyang Ningfeng Wooden-
We ensure that all suppliers have
gether with his team of forestry and ware in Russia, and has noticed the
procedures in place to implement Find out more about the FSC at
business co-workers, is making dra- difference in the forests where they
these standards throughout their www.ic.fsc.org.
matic changes in the places our wood source wood. “Forest managers are
operations and supply chains.
comes from. realising that there’s more to certi-
They must demonstrate that they
³:KHQ,.($¿UVWLQVSHFWHGWKH ¿FDWLRQWKDQIROORZLQJWKHUXOHVOLNH
can track and report the origin of
forestry operations in Russian Siberia, PRUHHI¿FLHQWSURGXFWLRQDQGKHDOWKL-
their wood.
we found that many weren’t follower, happier workers.”
ing the law,” says Mikhail. “Some We are making good progress in
were cutting irresponsibly – outside China and Russia, and Mikhail feels
their allowed areas and using poor positive: “Three Russian forest man-
techniques. They also lacked the right agement units supplying our Chinese in each country where we source wood (see the regulation varies in each country. We
standards for workers’ safety.” VXSSOLHUVKDYHEHHQ)6&FHUWL¿HGLQ page 103). are working with governments where we
Through our partnership with FY14. It’s really exciting – and it’s a For example, in the EU, 17 of 28 mem- source wood to explain our due diligence
WWF’s Global Forest & Trade Network good sign that we’re on track to meet
(GFTN), we promote better forest our goal of getting 100% of Chinese ber countries have now fully implemented systems, to minimise the risk of illegally
management throughout the supply solid wood products from more sus- the new EU Timber Regulation, introduced harvested timber entering our supply chain.
chain. Instead of imposing rules on tainable sources by FY15.” in FY13. Interpretation and application of

T O WA R D S F O R E S T P O S I T I V E
We have a goal to become forest In FY14 we have been supporting 13

positive by 2020, which means going projects in 11 countries that contrib-
beyond our own supply chain. We XWHWRLQFUHDVLQJ)6&FHUWL¿FDWLRQ
want responsible forest management These projects also focus on:
to be the norm, not just in the forests
we use for our own products. We will • Strengthening the protection
contribute to ending deforestation by of high conservation value forests
promoting the adoption of sustainable – those that are particularly
forestry methods across the whole important because of their bio-
industry, not just our business. diversity and other local factors
Our forest positive commitment • Raising awareness of responsible
includes these targets: forestry management
• Promoting responsible trade in
• By August 2017, at least 50% of forest products
our wood will come from more • Combating the illegal timber
sustainable sources – Forest trade.
Stewardship Council (FSC)
FHUWL¿HGRUUHF\FOHGZRRG%DVHG We support other initiatives to im-
on current projections, this is prove forest management through
expected to represent more funding NGOs as well as government
than 9 million m3. training and education initiatives.
• By August 2017, 100% of our These include a conservation study
wood sourced from priority centre in the Maliau Basin, Borneo,
areas 1 will be from more that will share research with scientists
sustainable sources. and students worldwide.
• By August 2020, we aim to source We have committed to not source
100% of our wood, paper and wood from areas linked with defor-
cardboard from more sustainable estation (see IWAY forestry standard,
sources.2 page 28). Deforestation is usually
• By August 2020, we will contrib- linked to land use changes caused
XWHWR)6&FHUWL¿FDWLRQRIDQRWKHU by expanding agriculture. We also
10 million hectares of forest in consider palm oil and leather in our
priority areas – which is equiva- commitment to becoming forest
lent to more than double the total positive (see page 33).
area needed to supply IKEA. This
is in addition to 35 million hec-
tares of FSC forest already added
through our earlier partnership
projects.
1
&RXQWULHVZKHUH,.($DORQJZLWKRXUSDUWQHUVKDVLGHQWL¿HGDKLJKHUULVNRIVXVWDLQDELOLW\FKDOOHQJHV
2
7KHVHVRXUFHVDUHFXUUHQWO\GH¿QHGDV)6&FHUWL¿HGRUUHF\FOHGZRRG2QFHWKHPRUHVXVWDLQDEOH
sources goal has been met, we will re-evaluate this criteria.

0 0
3 R ESOURC E AND ENERG Y INDEPENDENC E
“The IKEA and WWF partnership

is unique – in its ambition, its
results and the manner in which
both organisations have brought
together their values, expertise,
presence on the ground and so-
lutions for a better future.
After 12 years our partner-
ship is more solid than ever and
we always focus on delivering
results at scale.
Our shared ambition is to
help secure a real and long-last-
ing positive impact on forests
and the cultivation of cotton, in
DPDQQHUWKDWEHQH¿WVQDWXUH
and its wildlife, people and their
livelihoods, and the planet we
all live on.
Should we be proud of our
Achieving impact through collaboration results? Certainly. Will we do
more together to achieve our
– a partnership for change with WWF shared ambition? Absolutely.”
Marco Lambertini, Director General,

Collaboration is essential to tackle and communities are supported. In the supply chain has been transformed, WWF International
the biggest social and environmental Greater Mekong region, we are working with 76% of cotton now from more
challenges we all face. with small-scale producers of acacia, sustainable sources.
That is why in 2002 we joined forces rattan and bamboo in developing their Sustainable farming methods can
with WWF, a leading conservation business management skills, including make a big difference in reducing the
organisation, with a shared ambition to resource planning and market co-ordi- harmful impacts of cotton farming.
have a positive impact on forests and nation. And in Indonesia, where we buy In Pakistan and India, our projects to
the cultivation of cotton. More than 12 wood from smallholders and communi- improve farming practices are helping
years later, we are excited to be enter- ty-owned forests, we are supporting the to protect the environment, improving
LQJWKH¿IWKSKDVHRIWKHSDUWQHUVKLS JURZWKRI)6&FHUWL¿FDWLRQ working conditions, and making farmers
Working with WWF, we have se- Cotton is one of the world’s most im- PRUHSUR¿WDEOH
FXUHG)6&FHUWL¿FDWLRQIRUUHVSRQVLEOH SRUWDQWQDWXUDO¿EUHV%XWFRQYHQWLRQDO We are using what we have learned
management for 35 million hectares of cotton farming techniques can harm to increase the scope and scale of our
© WWF-Canon / Richard Stonehouse

forest worldwide, and by August 2020, the environment and communities. work, particularly in vulnerable regions
IKEA will have contributed an additional Our work with WWF began with a small where a lack of water availability would
10 million hectares of forest in prior- group of 500 uncertain cotton farm- threaten the viability of communities.
ity areas. We have prioritised credible ers in Pakistan. Today, around 110,000 7KH¿UVWSURMHFWVZLOOEHJLQLQ-DOQD
IRUHVWFHUWL¿FDWLRQFRPEDWLQJLOOHJDO farmers in a number of countries have a district in Maharashtra, India, and
logging, promoting a responsible timber adopted more sustainable farming in Punjab, Pakistan. For more on our
trade and protecting high conservation practices, such as the Better Cotton strategy for becoming water positive,
value forests (HCVF). Initiative, which IKEA and WWF joined see page 35.
We are also ensuring that people as founding members. Our own cotton

Cotton
We use cotton in many of our home fur-
nishing products, including sofas, cush-
ions, bed sheets and lampshades. Each
year we use around 0.6 to 0.7% of the
world’s cotton supply.
The cotton industry provides jobs and
incomes for many, particularly smallhold-
ers. But it has also brought problems such
as child labour, health issues for farmers,
and damage to natural resources including
water supplies through the use of agricul-
tural chemicals and wasteful irrigation. We
are working to transform the social and
environmental standards of cotton pro-
duction through our partnership with WWF
and others (see page 30).
As a founding member of the Better
Cotton Initiative (BCI), a multi-stakeholder
organisation that sets social and environ-
mental criteria for more sustainable cotton,
we are supporting increased traceability
Making more
of Better Cotton (produced to BCI stand- sustainable cotton a success
ards). We are encouraging better practices
DQGYHUL¿FDWLRQWKURXJKIDUPDXGLWV,.($ Since 2005, we have been working Cotton, and we are totally committed watering and we’re using less pesticide.”
is the largest consumer of Better Cotton in with WWF to make cotton farming more to the initiative – so much so that we Although IKEA’s cotton programme
the world, and we want to create positive sustainable. We helped set up the Bet- set ourselves the ambitious target of is under 10 years old, it has improved
ter Cotton Initiative (BCI), which aims procuring 100% of our cotton from more farming livelihoods and the environment.
change beyond our business, throughout to reduce the use of pesticide, water sustainable sources by the end of FY15. Our vision is that more sustainable cot-
the whole cotton industry. and chemical fertilisers while increasing Farmers like Swarupchand Maher, ton becomes a mainstream commodity
HDUQLQJVDQGVRFLDOEHQH¿WVIRUZRUNHUV who has a 28 acre cotton plantation in before 2020.
The Better Cotton Initiative has so far is- Maharashtra, India, have increased their We want to promote lasting change
sued licences to 240,000 farmers around gross margins by 45% and are using – not only for our customers, but for
Our goal is to buy all our the world. 24% less water. He says: “Before, it was everyone in the cotton supply chain.
cotton from more sustainable In FY14 we used 134,000 tonnes of hard to make enough money from selling
sources by the end of FY15. cotton from more sustainable sources* in our cotton. With the new techniques,
our products. This makes us one of the our yields have improved. We don’t have
world’s largest consumers of Better to spend so much time on weeding and
* This includes Better Cotton (BC), cotton from farmers working towards the Better Cotton Initiative (BCI) standards, and cotton grown to other regional sustainability standards.

3 2 R ESOURC E AND ENERG Y INDEPENDENC E more sustainable sources did not increase Working with WWF in developing coun-
proportionally. tries, we are focusing on smallholder farm-
COUN T R IES WE SOURCE Cotton from more sustainable sources is We have also developed detailed prod- ers. We are supporting them to apply more
C O T T O N F R O M F Y 14 GH¿QHGDV XFW VSHFL¿FDWLRQV IRU KRZ ZH ZRUN ZLWK sustainable farming techniques, such as
(% o f c o t t o n s o u r c e d )
cotton from more sustainable sources in using less water, chemical pesticides and
• Better Cotton (BC) new and existing products. These include chemical fertilisers (see page 31).
• Cotton grown by farmers working a directive stating that recycled cotton ,Q WKH ¿IWK SKDVH RI RXU SDUWQHUVKLS
towards the Better Cotton Initiative does not need to have originally been from with WWF we will focus on reducing the
(BCI) standards more sustainable sources, and a guide to amount of water it takes to produce cot-
• Sustainable cotton from the USA the reporting process we require from ton in water-scarce regions, with the aim
(such as e3 Cotton Program). FRWWRQVXSSOLHUV7KHVSHFL¿FDWLRQVVKRXOG of protecting water levels in reservoirs and
clarify and align our practices across the water tables. Pilot projects in India and
To support the growth of the Better whole business. Pakistan are developing and implementing
Cotton market, we source our cotton from effective water management techniques
India 23.1%
more sustainable sources in nine countries that can be scaled up and adopted by a
Pakistan 19.5%
including Brazil, China, India, Pakistan and large number of farmers in both rain-fed
Turkey 15.0%
Turkey. Spreading our supply in this way We invested EUR1.34 million and irrigated cotton growing areas (see
USA 8.8%
enables other companies to buy Better in sustainable cotton farming page 30).
China 7.0%
Cotton, encouraging uptake and demand, projects, and reached around For more on how we are support-
Brazil 3.5%
and preventing market distortions. 110,000 farmers. ing cotton-growing communities, see
Others 23.1%
We also look for ways to reduce the page 93.
YROXPHRIFRWWRQZHEX\E\LPSURYLQJHI¿-
ciency, blending it with other materials and
replacing it with alternative materials such
COT TON FROM MOR E DVFHOOXORVH¿EUHVVHHSDJHIRUPRUH
S U S TA I N A B L E S O U R C E S on how we use alternative materials).
(% C O T T O N S O U R C E D)
76 Performance in FY14
72
We sourced 178,000 tonnes of cotton,
almost 62% more than in FY13. The in-
crease is due to business growth and
improved data collection. The share of
cotton from more sustainable sources in-
34 creased to 76%, compared with 72% in
FY14 FY13. We sourced 70% more cotton from
24 FY13 more sustainable sources (134,000 tonnes
13 FY12 in FY14 compared with 79,000 tonnes in
FY11 FY13), but due to the increase in overall
FY10 cotton volumes, the share of cotton from

3 3 R ESOURC E AND ENERG Y INDEPENDENC E In addition to securing segregated sus- Performance in FY14
tainable palm oil for our products, we pur- For a number of years, all our suppli-
Palm oil requirements to include two additional FKDVH *UHHQ3DOP FHUWL¿FDWHV IRU HDFK RI ers have been required to document the
Palm oil is an ingredient in our candles and criteria: the 44,000 tonnes of palm oil in our prod- source of their leather, right back to the
some of our food products, and is some- ucts. The GreenPalm programme – ap- slaughterhouse. In FY14 we went a step
times used for processing rattan for furni- • No deforestation. Forests of high value, proved by the RSPO – supports the pro- further, asking for greater chain of custody
ture. Its cultivation can cause environmen- for conservation and carbon storage duction of sustainable palm oil and sells in high risk areas, back to farms directly
tal and social harm, including deforestation purposes, will be protected. All new WUDGHDEOH*UHHQ3DOPFHUWL¿FDWHVWRXVHUV supplying the slaughterhouses.
and loss of biodiversity in tropical regions, palm oil developments should be on land We are in the third year of working ,Q)<ZHPDGHSURJUHVVLQGH¿QLQJ
which is why we are committed to buying where biodiversity and natural vegeta- ZLWK-RKQVRQ -RKQVRQ0RQGHOŋ]DQGWKH guidelines with key stakeholders for re-
palm oil that is produced responsibly and tion are already highly degraded. United Nations Development Programme sponsible leather sourcing related to issues
sustainably. • No new development on peat, regard- (UNDP) to support the Indonesian gov- such as deforestation, indigenous peoples’
We believe that Roundtable on Sustain- less of depth. Peat wetlands also have ernment and the Sustainable Palm Oil rights and animal welfare. We aim to im-
DEOH 3DOP 2LO 5632 FHUWL¿FDWLRQ LV FXU- high conservation value due to their Initiative, which encourages sustainable plement these guidelines in FY15. This will
rently the best tool available to improve the unique biodiversity and ability to store palm oil production, particularly to pro- result in all the leather we buy being pro-
palm oil industry. By December 2015 we carbon and methane. tect the environment, reduce greenhouse duced to standards that protect forests,
aim for 100% of our palm oil to come from gas emissions and support smallholders in prevent pollution and respect animal wel-
VHJUHJDWHG 5632FHUWL¿HG VRXUFHV 7KLV improving their livelihoods. fare. The guidelines will complement our
ZLOOJLYHXVWKHFRQ¿GHQFHWKDWRXUSDOPRLO work with our suppliers on IWAY, our sup-
FRPHV IURP FHUWL¿HG VXVWDLQDEOH VRXUFHV Leather plier Code of Conduct, and IWAY Must cri-
and is not mixed with conventional sources. Cattle farming and leather production can teria for critical sub-contractors (see page
create environmental problems like defor- 79 for more on IWAY).
Performance in FY14 estation and pollution from tanning. There In FY14, we used 3.7 million m2 of leath-
3DOP RLO IURP VHJUHJDWHG FHUWL¿HG are also related impacts on communities, er in upholstery.* Some of the leather we
sources made up 32% of the amount we such as the displacement of indigenous buy comes from Brazil, a country where
purchased in FY14. people and forced labour. We work closely social and environmental problems in the
with our suppliers and other stakeholders OHDWKHUVXSSO\FKDLQKDYHEHHQLGHQWL¿HG
to improve standards in the production We have been implementing additional
We want all of our palm oil to of the leather used in our sofas, rugs and minimum requirements for suppliers there
FRPHIURPFHUWL¿HGVHJUHJDWHG other home furnishings. on issues such as traceability, deforesta-
sources by December 2015, or to By August FY15, all our leather will be tion and forced and bonded labour since
replace it if more sustainable alter- produced using ‘wet-white’ or other al- FY13. We will build on these require-
native materials are available. ternatives to chromium. We are working ments as we roll out the leather sourcing
with a number of chemical companies to guidelines.
ensure continuous improvement in the im-
We also want to contribute to the continu- pact of the tanning process, reducing tox-
ous improvement of standards, including icity, carbon footprint and water impacts.
the RSPO Principles and Criteria. To this
end, during FY14 we have updated our
* Excludes rugs (cattle hides, sheep and goat skins).

Food “IKEA is an excellent example

From the products we sell in our Swedish which includes a new approach to food. of a company that simply wants
Food Markets to the famous IKEA meatballs We aim to take a lead in providing a sus- ‘to do the right thing’. Including
animal welfare as a key pillar
served in our restaurants, over 600 million tainable and healthy diet by promoting a
in its strategy on sustainabil-
customers enjoy our food every year*. We balanced diet of more vegetarian food. ity, People & Planet Positive,
estimate the total carbon footprint of our To support this, we are introducing is an important development;
food products is around 651,000 tonnes of vegetarian meatballs in stores in 2015. it anchors IKEA’s high aspira-
tions for animal welfare across
CO2. We source our food from around 600 These have a lower water and carbon foot- the organisation and integrates
global and local suppliers. print, and are healthier than the original people, planet and animals into
beef and pork variety. humane sustainable food pro-
duction. It’s not easy securing
Reducing the levels of salt, sugar, fat, a higher welfare supply, espe-
In FY14 we have been engaging DUWL¿FLDO DGGLWLYHV DQG DOOHUJHQV ZLOO LP- cially at a global level, but it’s a
with external stakeholders through prove the nutritional value of our meals challenge we are proud to be a
part of. And we are delighted to
meetings and workshops, to develop and products. Better labelling and com-
be working with IKEA on their
our understanding of important munication with customers will enable ambitions for farm animals in
global trends and issues. them to make more informed choices. To “IKEA’s commitment to supply the future.”
H[FOXVLYHO\FHUWL¿HGVXVWDLQDEO\
implement this we will create guidelines caught and responsibly farmed
that will be used by our product develop- seafood in all markets is a major Dr Tracey Jones, Director of Food
These have included animal welfare, health ers when designing new food products milestone in the history of the Business, Compassion in World
sustainable seafood movement. Farming
and nutrition, food waste and social condi- and dishes. It is essential to think glob-
tions throughout the value chain. This pro- By certifying ingredients in more of our ally to achieve a sustainable
cess is helping us to develop an effective products, we will continue to ensure that seafood industry. By offering
FHUWL¿HGVHDIRRGLQWKHLUUHV-
Food strategy and plan for how we can be they are produced sustainably. We will
taurants worldwide, IKEA will
as sustainable as possible in the future – also work more closely with sub-suppliers enable millions of people each
see page 99 for more on our stakeholder like farmers to improve standards in ani- year to contribute towards en-
engagement. mal welfare and shrink their environmen- suring that the world’s oceans
are teeming with life for future
These discussions have informed our tal footprints. generations.
updated People & Planet Positive strategy, Having been involved in this
project from the early days, I am
pleased to see our shared vision
is becoming a reality.”
CERTIFIED FOOD ITEMS FY14

Nicolas Guichoux, Global
RIFRIIHHWKDWLV87=FHUWL¿HG 100 Commercial Director, Marine
Stewardship Council
RIFKRFRODWHWKDWLV87=FHUWL¿HG 25
* Based on 282 million receipts, and at least two customers per receipt.

3 5 R ESOURC E AND ENERG Y INDEPENDENC E Coffee, tea and chocolate: The goal of In FY14, IKEA Italy received a Good
VHUYLQJ87=FHUWL¿HGWHDLQRXUUHVWDXUDQW Sow Commendation from Compassion in
has been extended to August FY15 due World Farming (CIWF) for its commitment
WR GLI¿FXOWLHV ZLWK VXSSO\ LQ DOO PDUNHWV to source its ham from farms with higher
87= FHUWL¿FDWLRQ VWDQGV IRU VXVWDLQDEOH welfare standards.
farming, improving working conditions for To make sure we have a secure sup-
farmers and safeguarding the environ- ply of free-range eggs in all countries, we
PHQW %XLOGLQJ RQ WKH H[LVWLQJ FHUWL¿FD- have extended our deadline for achieving
tion for our chocolate products, all three the goal of 100% free-range egg products
remaining varieties of our CHOKLAD bars to the end of FY15. In countries where
(milk, dark and nut) will contain only UTZ availability of free-range eggs is limited,
FHUWL¿HGFRFRD&XVWRPHUVFDQXVHDQRQ- we will show leadership and work with
OLQHWUDFHUKWWSXW]FHUWL¿HGRUJLNHDWR farmers and suppliers to increase supply,
¿QGRXWZKHUHWKH87=FHUWL¿HGFRFRDLQ and stimulate greater demand to make
their chocolate bar has come from. this supply sustainable.
Fish and seafood: Our goal is for all the

seafood served in our restaurants and During FY15, we will assess our
sold in our Food Markets will be Aquacul- whole approach to animal welfare,
ture Stewardship Council (ASC) or Marine from the salmon we use in our food,
6WHZDUGVKLS&RXQFLO06&FHUWL¿HGE\WKH to the wool we use in our carpets.
end of FY15. Achieving our target will be a
challenge because there is a limited supply
RIFHUWL¿HGVHDIRRGLQFHUWDLQPDUNHWV%XW
Strengthening IKEA Food quality &HUWL¿FDWLRQDQGRUJDQLFIRRG we hope that our commitment can support
requirements Berries and jam: The lingonberries, the growth of this market.
We are focusing on improving traceabil- blueberries and cloudberries in our jams
ity and food quality in our supply chain, and beverages are picked in Sweden and Animal welfare
ensuring that products only contain the .5$9FHUWL¿HG.5$9LVD6ZHGLVKRUJDQLF Animal welfare is important to IKEA. In
ingredients listed in recipes and product FHUWL¿FDWLRQVWDQGDUGZLWKVSHFL¿FUHTXLUH- FY14, we approved the new IKEA Group
labels. We are continuing to strengthen ments on working conditions, including Animal Welfare standard and added two
our standards for food suppliers, includ- forced and child labour, equal treatment existing animal welfare goals to our updat-
ing regular and unannounced third-party of employees, and freedom of association. ed People & Planet Positive strategy:
auditing of food suppliers and sub-sup- It also covers wider environmental, animal
pliers. In FY14, we began auditing all our welfare, health and social responsibility is- • All eggs served in the IKEA restaurant
meatball, hot dog and salmon suppliers, to sues. Three of the jams sold in our Swed- will come from free range hens with
ensure compliance with legal and stricter ish Food Markets are already organic, and outdoor access by August 2015
,.($VSHFL¿FUHTXLUHPHQWV7KHDXGLWVZLOO all our jams will be organic by the end • Develop and start implementing higher
be completed in FY15. of FY15. welfare standards for pigs by August
2016 and for beef cattle by August 2017.

Developing our
water strategy
Water is an essential resource for stakeholders) to advocate for long-

our business, and just as we take care term improvements to water man-
to source other key materials, we must agement.
be responsible water stewards. Our
greatest water impacts are in our sup- Being water positive means that we
ply chain, such as cotton farming and will be good water stewards. In FY14,
textile production; and customer use of ZHEHJDQWRZRUNZLWK::)WRGH¿QH
RXUSURGXFWVFRQWULEXWHVVLJQL¿FDQWO\WR exactly what water stewardship will
our water footprint. mean for IKEA. This water stewardship
We have committed to being ‘wa- strategy will be complete in FY15.
ter positive’ by the end of FY20. This In FY14, we continued to use the
means that we will act as responsible World Resources Institute (WRI) Aque-
water stewards by contributing to im- duct tool and WWF’s Water Risk Filter
proved water management in some of to map out the higher water risk areas
the most water-stressed areas where in our supply chain and operations. This
we operate, so that there is enough will help us to prioritise areas for focus
clean water for ecosystems, people and in our water stewardship strategy.
communities. We will do this by: Read more about how we are:
Animal welfare in
producing down and feathers ,PSURYLQJZDWHUHI¿FLHQF\DQGTXDO-
ity in our own operations and in our
• Managing water in our own opera-
tions, on page 58
supply chain
Around 20% of our pillows and industry is rare. • Supporting our customers to reduce • Managing water in our supply chain,
quilts contain down and feather. Duck feathers are a by-product their use of water by developing and on page 64
Live plucking is common in the of the food industry. We trace down promoting innovative and affordable
goose down and feather industry. IKEA and feather from the suppliers back products • Helping our customers to reduce their
does not accept animal cruelty and to to the slaughterhouse. We audit • Going beyond the boundaries of water use, on page 17.
eliminate the risk of feathers and down slaughterhouses for animal welfare our own business, by collaborating
from live plucking entering our supply standards and suppliers must ensure with others (such as communities,
chain, we only use down and feathers sub-suppliers comply with the same companies, governments and other
from ducks. Live plucking in the duck requirements.

More sustainable By August 2020, 90% of the total sales 52% of the total sales value was from
products value will come from home furnishing

SURGXFWVFODVVL¿HGDVPRUHVXVWDLQDEOH
according to the product scorecard.
By August 2015, all our main home 98% of home furnishing materials and
furnishing materials, including packaging, packaging were renewable, recyclable*
will be either made from renewable, or recycled.
recyclable (on at least one market on an
*
:HGH¿QHPDWHULDOVDVUHF\FODEOHLIWKH\FDQEH
industrial scale) or recycled materials. recycled on an industrial scale in at least one of our
major retail markets.

By August 2020 - the aim is that the plastic material used in our home furnishing plastic
products* will be 100% renewable and/or recycled (equivalent to approximately 40% of
all the plastic used in our products).
*
The scope is plastics category products which we sell, textile products, packaging and components for furniture.
Product sustainability well. This includes checking to see if the

scorecard Scorecard is being used as it should be at
Since FY09, we have been using our Prod- the design concept stage, rather than as
uct Sustainability Scorecard to continually a checklist later. We will get the results of
assess and improve the sustainability of our latest Scorecard review in FY15 and
our products. It is an essential tool that use what we learn from them to make im-
will enable us to get 90% of our sales provements.
value from more sustainable products by So far, 89% of our current product
August 2020. range, by sales value, has been scored.
‘More sustainable’ products score Because a proportion of our range chang-
IKEA products are known for their This is good for the environment and more than 120 on the Scorecard. If a new es each year, we may never reach 100%,
style, quality, affordability and functional helps us to keep prices low for our cus- product scores well below the average but we will continue to work towards this
designs. We have challenged ourselves to tomers. We give co-workers the necessary score of other products in its category, we target so that we have an accurate picture
make our whole range more sustainable, tools and information to create products act to improve the score, or exclude the of how sustainable our products are. The
and we do this by looking at all aspects of that meet all our criteria on form, function, item from our range. share of the total sales value that came
our products and making improvements at quality, sustainability and a low price. We We review the Scorecard regularly to IURPSURGXFWVFODVVL¿HGDVPRUHVXVWDLQ-
every step. call this approach ‘democratic design’. ensure it is up to date and performing able increased from 39% in FY13 to 52%

OUR PRODUC T HOW WE IMPROVE

in FY14, enabling us to make progress More sustainable materials SUSTA INABIL I T Y PRODUCT SUSTAINABILITY
towards our goal. The average score for SCOR EC AR D PERFORMANCE
products evaluated using the score card Materials from more sustainable
increased to 107, from 86 in FY13, show- sources We assess our products against We provide our designers with the
11 criteria: necessary guidance and tools to
ing an overall improvement in the sustain- We want to make it as easy as possible for make our products more sustain-
ability performance of the range. our designers and developers to choose 1 . More from less (using lightweight able. These include:
Our goal is to ensure that the Score- more sustainable materials. These include materials and applying smart
designs that enable us to use The Product Sustainability
card and other tools, such as our Materi- WLPEHU FHUWL¿HG E\ WKH )6& RU UHF\FOHG
fewer resources) Scorecard - helps developers and
als Guides, can effectively challenge co- wood (see page 26), cotton from more technicians assess and improve
2 . Renewable materials
workers to take action to help make our sustainable sources (see page 31), seg- 3 . Reused and recycled materials
the sustainability of products.
products more sustainable. UHJDWHGFHUWL¿HG5632SDOPRLOVHHSDJH Criteria relate to how the product
4 . Material from more sustainable is designed, produced and used.
See page 13 for more about the prod- 33) and recycled materials. Our Materials sources
ucts that support our customers to live a Risk Council reviews new materials that 5 . Recyclability at product end- Materials Guides - explain the
of-life sustainability performance of
more sustainable life at home. KDYHEHHQLGHQWL¿HGDVPRUHVXVWDLQDEOH
6 . Quality individual materials and help
Read more about how we are engaging The results of their assessment, including product teams choose the most
7. 7UDQVSRUWHI¿FLHQWQXPEHURI
co-workers in sustainability on page 21. ZKHWKHU D PDWHULDO FDQ EH FODVVL¿HG DV products per container) sustainable ones.
more sustainable, are included in our Ma- 8 . Energy use in production
The Resource Chain framework
terials Guides to help developers make the 9. Renewable energy in production
– a project launched in FY12 that
best decisions. 10 . Raw-material utilisation aims to design products that can be
in production easily and repeatedly recycled, so
11 . Sustainable life at home that they can be brought back into
Renewable, recyclable and recycled
(products that enable our the IKEA product value chain as
materials customers to reduce energy raw materials.
With billions more people joining the con- and water use, reduce waste
sumer society, moving to a circular econ- in their homes, and lead a The Material Risk Council
DEMOCR ATIC healthier lifestyle). - assesses all potential new materials
omy is critical to ensure their hopes and for safety, quality and sustainability.
DESIGN
dreams can be met whilst staying within
the limits of our planet. We are contrib-
FORM uting to this shift by avoiding reliance on
QUALIT Y ¿QLWH PDWHULDOV ZLWK DQ DLP WR XVH RQO\ recyclable, and we aim to reach 100% by industrial scale in at least one of our major
renewable, recyclable and recycled ma- August FY15. This does not include addi- retail markets. Although national recycling
FUNC TION
terials. But even with these materials, we tives, lacquering or other substances that infrastructure and regulations vary, we
SUSTAINABILIT Y can further reduce our impacts and better ZRXOG¿QLVKJOXHRUVXUIDFHWUHDWDSURG- anticipate that suitable recycling facilities
A L L AT A meet customer demands in the long term uct. In FY14, 9.8% of the wood used by will be available in the majority of our mar-
LOW PR ICE E\¿QGLQJZD\VWRPDNHPRUHIURPOHVV Division Boards of IKEA Industry Group kets by the time our products reach the
and minimising waste. was recycled material, and we aim to end of their lives.
In FY14, 98% of the main materials in UHDFKE\:HGH¿QHPDWHULDOV Where the infrastructure exists, our
our products were renewable, recycled or as recyclable if they can be recycled on an stores are encouraging customers to

return their old mattresses for recycling, choosing the right materials from the start
and we are planning the roll-out of a tar- is crucial. Take-back programmes are also
geted take-back scheme in 20 countries in important, because they give us access to
FY15. In countries like Russia and the USA, valuable materials to use for making new
mattress recycling can be challenging, es- products. The programmes make it sim-
pecially where the infrastructure does not pler for customers to dispose of old and
exist or differs across the country. We aim unwanted products.
to stimulate the development of the nec- We have made progress on the key
essary facilities wherever possible. materials we use that are not renewable
or widely recycled, such as polyurethane
New sources of materials foam, melamine and silicone. We have
We are excited about developing new, been exploring alternatives to replace pol-
high-performing raw materials that can yurethane in our sofas and mattresses. We
help us keep costs down and reduce envi- are on track to phase out melamine from
ronmental impacts. all our products, such as plastic tableware
We established a Resource Chain pro- and food storage, by FY15, to be replaced
Renewable
ject in 2012 with the ambition of develop- by partly renewable polymers with similar mattress foam
ing a framework for how used materials properties. We are replacing silicone with
can re-enter our supply chain, and how we thermoplastic elastomers (TPEs) in some Not all plastics are made from fossil known as ‘second-generation’ feed-
secure access to secondary raw materials of our products, but we are not yet able to fuels. stocks, such as waste wood.
We want to increase our use of We recognise there is increasing
in the future. To create suitable products phase it out completely.
renewable and recycled materials in global demand for renewable materials,
from this process, we have learned that Read more about how we are encour- our products. for example for replacing fossil fuels in
aging customers to return unwanted items We have been working with two of transport. While the amount we buy for
for recycling and upcycling on page 60. our suppliers in FY14 to test a solution making plastic is a very small propor-
that will enable us to reduce the pro- tion of the total demand, we want to
portion of petroleum-based, non-re- ensure that we do not harm people or
R E N E WA B L E , R E C Y C L A B L E
Durability newable foam used in our mattresses. the environment and are working in the
A N D R E C Y C L E D M AT E R I A L S * IN
Style, quality and functionality are essen- From FY15, a new foam made of most sustainable way possible.
H O M E F U R NI S HIN G P RO D U C T S
15% soy-oil will be used in our foam The results of an independent life-
tial qualities of IKEA products. And they mattresses, such as MALFORS and cycle assessment show that replacing
2011 > 88% are always affordable and designed to last. MOSHULT. petroleum-based materials with those
We continually develop our product test- Because soy production can be made from soy could enable our foam
2012 > 91% associated with poor environmental suppliers to reduce CO2 emissions sig-
ing techniques to ensure we are using the
2013 > 98% and social standards, we buy our soy QL¿FDQWO\$VZH¿QGZD\VWRLQFUHDVH
latest methods. We evaluate our products oil from segregated, traceable sources the proportion of soy-based material,
2014 > 98% thoroughly before sale and regularly after- in North America, and the suppliers and combine this with a new process
GOAL 2015 > 100% wards. Sofas and chairs go through me- comply with IWAY, our supplier Code of for recycling conventional foam, we
Conduct. will be able to reduce emissions
chanical tests and we assess textiles for One of our long-term goals is to even further.
*
7KHVHDUHPDLQPDWHULDOVGH¿QHGDVDOO colour-fastness and wear and tear. produce plastics from waste materials
materials except additives, lacquering or
RWKHU¿QLVKLQJVXEVWDQFHV
We monitor the number of product

4 0 R ESOURC E AND ENERG Y INDEPENDENC E returns and this data is entered into the edge about customer needs and ex-
Product Sustainability Scorecard. We are pectations, are used to develop our
FRQ¿GHQWWKDWRXUSURGXFWVKDYHWKHOHYHO product safety standards
of durability to meet the required function, • We use thorough assessments during
and offer extended guarantees of up to 25 product development, production and
years on many items, including kitchens, after products go on sale, to identify
knives, selected mattresses, pans and risks
taps. • Before full production begins, our rig-
orous testing programme ensures the
(I¿FLHQF\ safety of materials, and of all items
At IKEA we are always looking for ways to made by suppliers
make more from less, by improving pro- • During production and after products
cesses and being more inventive in our go on sale, we undertake regular spot
use of resources. checks
• We train and support co-workers to
continually monitor the products in
Every day, we challenge ourselves our range and comply with our IKEA
to continue making brilliant designs product safety and compliance alarm
that require less material and we ask process.
our suppliers to do the same.
Our dedicated Product Safety and
Compliance School works with different
Product safety functions across IKEA so that they can
If our customers cannot trust our prod- identify, investigate and prevent safety
ucts to be safe, we will have failed in our incidents. All co-workers have a duty to
aim to create a better life for the many report incidents or concerns about safety
people. We stay focused on product safety through our global safety alarm system,
Examples of at all stages, from development through to and our central safety team monitors and
investigates all reports. If needed, they
products made from... production and after-sale.
There are several stages to product can stop sales of a product around the
development and production: world immediately.
We make our SKRUTT desk pad the RISSLA series, consists of 100% Occasionally, we decide to recall a
IURPUHF\FOHGSODVWLF¿OPSDUWO\ recycled paperboard.
• We continually monitor all sales mar- product for safety and compliance rea-
deriving from packaging that was used We weave water hyacinth to con-
to transport our products. struct our RIFFLA basket. By harvest- kets for new and updated product sons. To ensure that customers are aware
Our MÄSTERBY step stool uses only ing this invasive weed, which can grow safety legislation and other compli- and can act on an issue, we communicate
100% recycled, post-industrial plastic double its size in two weeks, we can ance requirements. We also partici- through many channels, including stores,
in its construction. LPSURYHZDWHUÀRZVLQULYHUVODNHV
The main body of the RISSLA and ponds and also support their pate in the development of local and internet sites, press releases, our inter-
PDJD]LQH¿OHDQGRWKHUSURGXFWVLQ ecosystems. global product safety standards nal newsletter, social media sites and our
• These insights, along with our knowl- IKEA FAMILY network. We always investi-

gate the causes of problems with suppliers children in cots and playpens. All custom-
and our safety teams to prevent similar ers responding to our request received a
situations from happening again. free repair kit containing a warning label,
In FY14, we recalled the following safety instructions and self-adhesive fas-
items: WHQHUVIRU¿[LQJWKHODPSFRUGWRWKHZDOO
• Bed canopies for infants and small Chemicals

children – after identifying a poten- We always avoid chemicals that could harm
tial strangulation hazard. We received people and the environment. Our aim is
valuable feedback from customers and to select materials, surface treatments
reports of infants becoming entangled and production techniques with the low-
when the net was pulled into the bed. est possible emissions. As a minimum, we
• LYDA jumbo cup – following reports of comply with the strictest laws and regula-
the cup breaking when in contact with tions in every country where we make and
hot liquid, leading to the possibility of sell products. When one country tightens
burns. The affected cups were sold be- its rules, we introduce these new require-
tween August 2012 and April 2013, and ments in all IKEA markets, if applicable.
the recall took place between June and During FY14, we started to implement
October 2013. the IKEA Chemical Strategy. We know that
• GUNGGUNG indoor and outdoor swings customers, governments, NGOs and other
– after four reports of the suspension stakeholders want to know more about
¿WWLQJVEUHDNLQJZKHQLQXVHOHDGLQJ the chemicals we use. Therefore the main Chemical-free
to risk of injury from falling. focus of our work has been to develop a ÀDPHUHWDUGDQWV
PRUH HI¿FLHQW ZD\ RI FDSWXULQJ DQG DV-
We extended a recall to repair KRITTER sessing data about the chemical content
Creativity and innovation is part $FFLGHQWDOVXUIDFH¿UHVDUHLQFUHDVLQJ
and SNIGLAR children’s beds, to include of our products. With access to more in- of everyday life at IKEA and we know so many countries are keen to address
items made over a longer period than we formation, we can improve our chemical that even the best ideas need help to this problem. Measures to reduce the
RULJLQDOO\VSHFL¿HG:HGLGWKLVEHFDXVHRI risk assessments and be faster to phase get off the ground. ULVNRIDFFLGHQWDO¿UHVDUHPDQGDWRU\LQ
In FY14, we invested in a collabo- countries such as the UK and the USA.
reports that the metal rod connecting the out potentially harmful substances. ration between a supplier and external Through our support, the experts
guardrail to the bed frame broke, creating We have also encouraged the Euro- experts to support the development of KDYHFUHDWHGDQHIIHFWLYHÀDPH
a laceration hazard. pean Commission (EC) to develop a com- DÀDPHUHWDUGDQWWHFKQRORJ\IRUXS- retardant technology which does not
KROVWHU\IXUQLWXUHZLWKRXWXVLQJÀDPH compromise on safety or compliance,
:HDOVRLGHQWL¿HGDSRVVLEOHLVVXHZLWK prehensive policy on endocrine disrupting
retardants – chemicals which can be and which helps us to phase out
the SMILA and similar models of mounted chemicals (EDCs) for all EU states, which toxic to people and the environment certain chemicals from our products.
children’s wall lamps. To prevent the possi- takes into account their potential to harm during manufacture and disposal. The We are planning to roll out the
bility of strangulation, we encouraged cus- people and wildlife. QHZÀDPHUHWDUGDQWWHFKQRORJ\FDQ QHZÀDPHUHWDUGDQWWHFKQRORJ\
SUHYHQWDFFLGHQWDOVXUIDFH¿UHVRQ in the USA.
tomers to check that the cord was securely Read about how IKEA Industry furniture like sofas from spreading.
fastened to the wall and out of the reach of manages chemical waste on page 61.

TIMELINE OF PHASED
OUT C HEMIC AL S
We have been working on phasing out One of our recent achievements has
certain chemicals from our products been to dramatically reduce the amount
for decades and we continually look of lead in the brass alloy used in our
for alternatives for the chemicals we taps by 84%. EU regulations allow up to
use now. The timeline below shows the 3.5% and North America 8%. Our brass
progress we have made. alloy now has just 0.25% lead.
D AT E O F P H A S E - O U T
19 9 5 PVC 1
19 9 6 Azo dyes in textiles and leather that may
release carcinogenic arylamines
2000 %URPLQDWHGÀDPHUHWDUGDQWVLQIXUQLWXUH 2
2004 Chromium 6 in paint and lacquers

2005 Chromium 6 in the chrome-plating process
2006 BPA containing polycarbonate plastic in
children’s products 3
2008 Chromium 6 in metal surface treatments
2 011 /HDGLQPHWDO¿WWLQJV
2 01 2 BPA containing polycarbonate plastic
in food contact item
1
Exception: electrical cords.
2
For electrical components and products we comply with EU Restriction of Hazardous Substances Directive
(RoHS), which bans poly brominated biphenyl (PBB) and poly brominated diphenyl ether (PBDE).
3
In products for children aged 0-7 years.

More sustainable buildings By August 2015, produce renewable en- Produced renewable energy equivalent to
and transport ergy equivalent to at least 70% of our

energy consumption and by August 2020,
42% of our total energy consumption, up
from 37% in FY13.
on Group level, produce as much renew-
able energy as we consume.
%HFRPHPRUHHQHUJ\HI¿FLHQWLQRXU &RPSDUHGZLWK)<HQHUJ\HI¿FLHQF\
own operations by August 2015 and 30% increased by 15% in stores, 27% in distri-
by August 2020, compared to FY10. bution centres, 26% in IKEA Components
and 17% in IKEA Industry Group Divisions
Flatline and Solid Wood.
In IKEA Industry Group Division Board
HQHUJ\HI¿FLHQF\GHFUHDVHGE\PDLQO\
due to growth and site acquisitions over
the last few years.
By August 2015, reduce carbon emissions &DUERQHI¿FLHQF\LQFUHDVHGE\

from our own operations by 50%, compared to FY10.
compared to FY10.*
*
Compared to FY10 in relative terms, measured by
CO2/m3 products sold, or CO2/m3 goods purchased.
By August 2016, reduce carbon emissions In FY14, we reduced total carbon

from the transport of goods by 20% emissions for transport of goods by
compared to FY11, and by 30% compared 12.8% compared to FY11.
to FY12 by August 2020.*
*
Compared in relative terms and measured by m3
transported goods.
By August 2020, 90% of the waste from 89% of the total waste generated was
our own operation will be recycled or recycled or energy recovered, up from
energy recovered, of which 80% of the 88% in FY13.
waste from stores and distribution centres At stores, 77% was recycled and 13%
and 90% from IKEA Industry Group will be incinerated for energy recovery. At
material recycled. distribution centres, 81% was recycled and
11% incinerated for energy recovery. And
at IKEA Industry Group, 66% was recycled
and 11% incinerated for energy recovery.
We want to make sure our business Carbon footprint use to calculate our total footprint helps us This is why we focus on:
growth is sustainable by using resources Our total estimated carbon footprint, from identify areas such as raw materials pro-
HI¿FLHQWO\DQGLQYHVWLQJLQUHQHZDEOHHQ- raw material to product end-of-life, was duction, product manufacturing and prod- • Using more sustainable sources for our
ergy. This is good for the planet and it around 33.2 million tonnes of CO2 in FY14. uct use (use of products that consume en- raw materials (page 38)
helps us manage our costs so that we keep This estimated total footprint was higher ergy), that contribute the most to our total • Working with suppliers on manag-
prices low. than in previous years, mainly due to use carbon footprint. ing their environmental impacts and
of more complete data. The method we HI¿FLHQF\SDJH

NEW targets PEOPLE & PL ANET
• Designing more sustainable products 24% compared to our FY10 baseline. It im-
(page 37) proved in all parts of the business due to By August 2020, close at least two material loops (not currently existing in a region)
• Enabling customers to save or LPSURYHGHQHUJ\HI¿FLHQF\DQGLQFUHDVHG for post-consumer waste.
generate energy at home through our use of renewable energy, with the excep-
By August 2020, reduce waste from our store operations by 10% compared with FY13.
products and services (page 14). tion of the IKEA Industry Group Division
%RDUG&DUERQHI¿FLHQF\DW,.($,QGXVWU\
But we also know that we can make a big Group Division Board decreased due to in-
difference by making IKEA buildings more creased production of HDF (high density (QHUJ\HI¿FLHQWEXLOGLQJV KLJK GHQVLW\ ¿EUHERDUG +') 7HFKQLFDO
HI¿FLHQW PDQDJLQJ FRZRUNHU WUDYHO EHW- ¿EUHERDUG ZKLFK UHTXLUHV PRUH HQHUJ\ (QHUJ\ HI¿FLHQF\ LPSURYHG E\ LQ problems with press heating plates caused
ter, reducing the energy and water we use to produce than standard board; the fact stores, 27.1% in distribution centres and several months of lower productivity – the
DQGLPSURYLQJRXURYHUDOOSURFHVVHI¿FLHQ- that our newly acquired Novgorod site 17.2% in IKEA Industry Group Divisions same energy consumption but lower out-
cy. Even though these areas represent a which uses a gas boiler was operational for Flatline and Solid Wood, compared with put – at our Novgorod site in Russia, and
small share of our total carbon footprint, DIXOO\HDUIRUWKH¿UVWWLPHVHHSDJH FY10. It decreased by 1.6% in IKEA Indus- the installation and start-up at our new
we have direct control over them and can and challenges in accessing renewable try Group Division Board, largely due to its plant in Malacky, Slovakia, consumed en-
make quicker improvements. energy at some sites. expansion since FY10 and the acquisition ergy but there was no or very low output.
In FY14, absolute carbon emissions Read about how we are enabling our RIQHZVLWHV7KHVHVLWHVKDYHOHVVHI¿FLHQW 3URSRVHGHQHUJ\HI¿FLHQF\SURMHFWVPXVW
in our own operations decreased by 2% customers to reduce their carbon footprint machinery, which we are working to re- produce savings that pay back the initial
compared to FY13, to 757,841 tonnes, and when travelling to and from our stores place, and more energy-intensive produc- investment within eight years. Since FY10
RXURYHUDOOFDUERQHI¿FLHQF\LPSURYHGE\ on page 57. tion processes such as the production of we have saved EUR 66 million through
Making sustainability
everyone’s business
We want sustainability to be a to play in meeting our People & Planet with customers.
natural part of our everyday job no Positive goals.” “We’ve achieved a lot already, but
matter where we work in the store. Pia’s team has found that the key to there is still much to do. In the com-
“With 315 stores in 27 countries, success is for country operations to ing year we will focus on training and
this is not easy. But we are determined have the freedom to develop their own engaging our co-workers, and giving
to make it happen,” says Pia Heiden- sustainability activities, based on the them, and our customers, the oppor-
mark Cook, Head of Sustainability for global framework of People & Planet tunity to share stories about how they
Retail & Expansion, IKEA Group. Positive strategy. It has led to some live a more sustainable life at home,”
“To create a sustainable business, great results. says Pia.
it is important co-workers understand For example, some stores have Read more about how co-workers
that engaging customers on how to live conducted sustainability training and are engaging customers in living a
a more sustainable life at home is just projects engaging co-workers in living more sustainable life at home on
as important as their part in cutting en- a more sustainable life at home. They page 19.
ergy use or waste at the store. And we have seen big changes in motivation
believe that every co-worker, no matter DQGFRZRUNHUVDUHPRUHFRQ¿GHQWLQ
where they work in the store, has a role VKDULQJWKHEHQH¿WVRIWKH,.($UDQJH

IKEA CARBON FOOTPRINT FY14

– from raw materials to product
end-of-life (tonnes CO2)*
Raw materials 15,032,624
FY14 26.2
Production and distribution 3,809,036
FY13 27.6
Suppliers 2,703,957 C A R B O N E F F I C I E N C Y: FY12 27.0
Home furnishing, catalogue and food suppliers C ARBON FOOTPR INT
PER PRODUC T SOL D FY11 34.4
Goods transport 1,054,217
Excludes customer delivery suppliers ( k g / C O 2 /m 3 ) * FY10 34.3
Business travel 50,862 *
Scope 1 and 2 emissions
IKEA 875,225
Buildings 757,841
CARBON EFFICIENCY FY11 FY12 FY13 FY14 FY15
Co-worker commuting 117,384 (% improvement GOAL
Customers 12,751,943 against FY10 baseline)
Transportation to stores 2,384,752 Stores 9.5 26.9 29.1 36.8 50
Product use 10,367,191 Distribution centres 10.7 38.4 32.0 49.5 50
Products’ end-of-life 731,606 IKEA Industry Group Divi- -9.4 8.9 2.7 22.1 50
sions Flatline and Solid
Total 33,200,434 Wood
We use reported data for carbon emissions in our operations and tier 1 suppliers, and IKEA Industry Group - 25 15 12.8 50
*
models and estimations to assess our full value chain.

Division Board
Base year: FY11
IKEA Components - - - 7.8 50

IKEA CARBON FOOTPRINT (tonnes CO2) Base year: 2012
Total -0.4 21.3 19.3 23.6 50

GHG emissions FY14
Scope 1 (IKEA owned energy generation 143,837
from gas, biomass and oil boilers and diesel
generators) Scope 1 and 2 emissions FY10 FY11 FY12 FY13 FY14
– IKEA buildings
Scope 2 (purchased electricity and district 614,004
(tonnes of CO2)
heat)
Stores 435,344 428,997 353,809 359,990 333,576
Total scope 1 + 2 757,841
Distribution centres 47,999 45,151 31,451 35,113 29,273
Scope 3 (raw materials production, 32,442,593
emissions from suppliers, goods transport, IKEA Industry 330,112 380,677 324,225 369,740 390,416
business travel, Co-worker commuting,
IKEA Components* - - - 819 1,095
customer transportation, product use and
product end-of-life) 2I¿FHV 4,730 4,791 4,641 3,766 3,481
Total scope 1,2 and 3 emissions 33,200,434 Total 818,185 859,616 714,126 769,427 757,841
*
IKEA Components data is reported for the calendar year.

ANSWER
HQHUJ\ HI¿FLHQF\ LQ RXU VWRUHV DQG lights to LED lamps to save energy, lower
“We want to have a positive
distribution centres alone. Rising ener- internal air temperatures and reduce the impact on people and the planet,
gy prices may mean that some projects ULVNRI¿UH$/LIH&\FOH&RVW$QDO\VLVPRG- and that means going beyond
could achieve payback more quickly than el has been developed to enable us to se- our direct operations and fo-
cusing on the areas where we
projected. lect LED suppliers that offer the best value can make the most difference.
DQGWKHPRVWHQHUJ\HI¿FLHQWSURGXFWV And since we operate across
:H QRZ KDYH PRUH HQHUJ\HI¿FLHQW the whole value chain, we have
a unique opportunity, and a
Our store designers use the IKEA kitchen ventilation systems in 88 stores,
Stakeholder responsibility to do so. Working
energy model to integrate energy most of which were installed during FY14.
challenge with others, we are helping to
HI¿FLHQF\DQGUHQHZDEOHHQHUJ\LQWR On average, they save a total of more than transform the sustainability of
heating, cooling, lighting and energy 160 MWh per store each year, of which the cotton and forestry sectors.
QUESTION 7KLVDSSURDFKEHQH¿WVSHRSOH
in new and existing stores. 25% is from a reduction in electricity and and the environment and is
75% from a decrease in heating. For most “IKEA already has ambitious helping to make more sustaina-
stores, we expect the investment payback sustainability initiatives, in- ble sources such as FSC and Bet-
cluding aggressive renewable ter Cotton mainstream commod-
In FY14, the tool was used to support 19 to be within two years. energy procurement goals. But ities. We’ve set ambitious goals
projects to make both big changes to the In FY14, we have started to test fuel as a leading product design and to reduce energy and water use
way stores are designed and smaller im- cell technologies in the USA; they use a UHWDLO¿UPZLWKDJOREDOUHDFK and CO2 emissions in production,
it is well positioned to drive and have achieved good results
provements to everyday activities. This chemical reaction to convert biogas and
sustainable change well beyond by working together with some
has resulted in lower capital spending and natural gas into electricity and water. We its own business. How will IKEA of our more impact intensive
less energy use. expect that a 300 kW fuel cell installation XVHLWVLQÀXHQFHDQGH[SHUWLVH suppliers. We also have a unique
can generate enough energy to cover 40% to achieve more transformation- opportunity to enable millions of
7KHUROORXWRIHQHUJ\HI¿FLHQWOLJKWLQJ
al progress across its industry people to live more sustainably,
continues, with a total of 62 stores now of the annual energy consumption of an and value chain on issues such for example by making energy
¿WWHGZLWK/('DQGRWKHUHI¿FLHQWOLJKWLQJ average store. as energy and water?” HI¿FLHQW/('OLJKWLQJDIIRUGDEOH
systems. We have invested over EUR 20 We are extending effective energy and attractive and by offer-
Andrew Steer, President and CEO, ing affordable home solar to
million in the lighting project and expect to management further into IKEA opera- World Resources Institute our customers. These are good
invest another EUR 80 million to improve tions. For some time every store has had results, but there is much more
the lighting in 220 stores and other build- an energy goal, but responsibilities for to do. The scale of sustainability
challenges like climate change
ings by the end of FY17. The investment of who managed energy were not clear or
and water scarcity requires
EUR 100 million will deliver EUR 15 million consistent. We have now changed our transformational change. As we
savings each year and reduce energy working methods so that roles are clearly move forward, we will continue
consumption by 15% per store. GH¿QHG LQFOXGLQJ ZKR LV UHVSRQVLEOH IRU to go all-in to transform our
business and will work with oth-
The rest of IKEA Group, including IKEA setting goals and gathering data. This ers to advocate for wider change
Industry and Distribution Services, are means we will have more accurate and in society.”
joining the LED transformation. So far, complete data on energy management
Steve Howard, Chief Sustainability
of the six units in IKEA Industry Division and accountability for meeting goals. Our 2I¿FHU,.($*URXS
%RDUG¿YHQRZKDYH/('OLJKWLQJ,QRXU new Energy Performance Year Cycle feeds
furniture factories we are changing UV in data from individual stores and distribu-

Towards
climate positive
Climate change is one of the biggest nities in the USA and forced us to tem- Our major commitments to tackle sustainable sources for cotton and
challenges facing society, and urgent porarily close nine IKEA stores, leading climate change include: wood
action is needed to protect people and to USD 9 million (EUR 7.2 million) in lost • Advocating for ambitious policies to
the planet. revenue. • Making a more sustainable home life address climate change, individually
Some of the countries we source from affordable and attractive for millions and through coalitions.
But the transition to a low-carbon are particularly vulnerable to the effects of customers, including home solar
economy offers huge opportunities, of climate change, increasing the risk of DQGHQHUJ\HI¿FLHQW/('OLJKWLQJ We are calling for long-lasting, robust
bringing new jobs, economic growth and disruption in our supply chain and harm • Transitioning to 100% renewable policies that will unlock the innovation
energy security. For IKEA, taking action to communities. energy, by producing as much energy and investment needed for companies
on climate change drives innovation, We are working to make our business from renewable sources as all the to commit to more sustainable business
investment and renewal. It is an oppor- climate positive. By this we mean becom- energy we consume in our buildings models and a low-carbon economy. We
tunity to make our business better and ing energy independent by investing in • Purchasing renewable electricity will continue this in FY15 in the run-up to
meet the needs and expectations of our UHQHZDEOHHQHUJ\DQGHQHUJ\HI¿FLHQF\ from others the COP21 meeting in Paris, where world
customers. (see page 52), cutting emissions in our ,PSURYLQJHQHUJ\HI¿FLHQF\DQG leaders will come together to negotiate a
Our direct operations are already be- supply chain (see page 62) and inspir- encouraging the uptake of renewable global agreement to tackle climate change.
ing disrupted by extreme weather. For ing and enabling millions of customers energy in our supply chain Read more about our approach to climate
example, in 2012, Hurricane Sandy seri- to reduce their energy use and generate • Transforming the materials we use, change and public policy on page 102.
ously affected co-workers and commu- clean energy at home (see page 14). for example aiming for 100% more

Becoming a leader in
sustainable furniture production
IKEA Industry – our own furniture for vehicles, by the end of FY20.
production business – makes around We will do this by increasing
15% of our products and is responsible the use of biomass to generate Regulating voltage
for around half of our energy use.
We want to be the leader in sustainable
our own energy, purchasing more
renewable energy and improving
saves energy
furniture production. To achieve this HQHUJ\HI¿FLHQF\:HDOVRZDQWWREH
by 2020, we have developed the IKEA a great place for our co-workers to The power that comes from the energy bills and repairing or replacing
Industry Sustainability Plan, in line work and a good neighbour in all areas grid in many countries has a higher equipment. In countries where elec-
with the People & Planet Positive where we operate. To make sure the voltage than needed in most buildings. tricity is not from renewable sources,
Strategy, and set ambitious targets materials and services we buy are in Our store in Vantaa, Finland, further reducing voltage can also cut carbon
for all IKEA Industry sites. line with our sustainability principles, LPSURYHGLWVHQHUJ\HI¿FLHQF\E\LQ- emissions.
We want to make boards and we will continue to engage all suppliers stalling a voltage optimiser. This saved In six years, the Vantaa store will
furniture from recycled wood or wood to understand and implement IWAY. 5.5% of the energy used in FY14 have saved enough energy to pay
coming entirely from well-managed (compared with FY13), without having back the EUR 120,000 cost of the unit.
forests. Our products will be made Read more about how we are to change any electrical equipment. The payback period could be quicker
ZLWKRXWVHQGLQJDQ\ZDVWHWRODQG¿OO working towards a carbon neutral The unit reduces the mains voltage in stores where energy consumption
or discharging wastewater from IKEA Industry on page 49. DQGUHJXODWHVÀXFWXDWLRQVLQYROWDJH is greater and the cost of electricity
production, and using the least This reduces energy consumption and is higher. The results of the pilot are
amount of resources possible. We Read more about how we engaged extends the life of electrical equipment being analysed and communicated
aim to be carbon neutral in all IKEA policy makers on becoming carbon by protecting it from damage caused across IKEA to encourage the installa-
Industry operations, including fuel neutral on page 102. by power surges, saving us money on tion of the units from FY15.

ENERGY EFFICIENCY FY11 FY12 FY13 FY14 FY15

tion centres for analysis and informs our Energy management is an integral part (% decrease against FY10 GOAL
yearly goal setting for country operations. of the new sustainability training that has baseline*)
Store managers now have a clearly de- been rolled out in FY14. Stores 4.1 7.1 9.6 15.1 20
¿QHGUROHDVWKH\DSSURYHWKHDFWLRQSODQV IKEA Industry Group has been working
Distribution centres 12.4 18.5 9.0 27.1 20
and necessary resources to meet the en- to set up an energy management struc-
ergy goals. Store operations managers ture at all sites. Local energy teams were IKEA Industry Group 7.5 14.0 10.3 17.2 20
Divisions Flatline and Solid
also have energy management included in formed in FY14, and in FY15 an energy Wood
WKHLUMRESUR¿OHV management system will be implement-
IKEA Industry Group Division 9.6 13.8 3.4 -1.6 20
HGDW¿YHSLORWVLWHV/HVVRQVIURPWKHVH
Board
pilots will help us develop the next phase Base year: FY11
Changing co-worker behaviour of the roll-out. IKEA Components - - - 25.9 20

is essential if we want to meet Base year: 2012
HQHUJ\HI¿FLHQF\JRDOV
*
Historical data (FY11-FY13) has been restated for all areas, due to changes in the methodology.
How co-workers
go the extra mile
Corneliu Andreiev, Maintenance ting heating, cooling and ventilation
Manager in IKEA Bucharest, Roma- equipment.
nia has tirelessly worked on making Michael Schmidt, Energy Special-
small changes that have a big impact ist at IKEA Germany, has worked
RQHQHUJ\HI¿FLHQF\VXFKDVZHHNO\ enthusiastically across the country
monitoring of the store’s energy throughout FY14 to improve energy
consumption and optimising use of HI¿FLHQF\(DFKPRQWKKHSURYLGHVWKH
lighting, heating, cooling and ventila- stores with updates on their progress,
WLRQWRLPSURYHHI¿FLHQF\+HKDVDOVR shares best practices and uses his
coached co-workers to be more aware many years of experience to support
of their energy use. The store was one their efforts. With help from Michael,
RIWKHOHDVWHQHUJ\HI¿FLHQWRIDOO,.($ the stores have reduced energy use
stores, but he has helped to reduce across Germany by 11% in FY14, more
energy consumption by around 30% than double the target.
since FY13. During FY16 he plans to
cut energy consumption by half, com- For more on how we support our
pared with FY13, by installing better co-workers to play a role in making
LQVXODWLRQDQG/('OLJKWVDQGUHWUR¿W- IKEA more sustainable, see page 21.
Corneliu Andreiev Michael Schmidt

SITE
SELECTION
WATER
POSITIVE
ENERGY INDEPENDENCE
SUSTAINABLE BUILDING STRONG COMMERCIAL OFFER ZERO WASTE

MATERIALS Sustainable life at home
CHANGE AGENT IN SUSTAINABLE

PEOPLE
SUSTAINABILITY OPERATIONS
The Sustainable LOWEST CARBON MEETING THE GOOD NEIGHBOUR
Store journey
EMISSIONS CUSTOMERS
We want to make all our stores more workers who are specialists in sustainable ment all 12 principles. Our ambition is learn how to live a more sustainable life
sustainable and we have been making buildings, store operations, materials, to create stores that are relevant for the at home. Inspiring our co-workers will be
progress to improve their location, design architecture, working environment, urban community and provide local people with essential to achieving this vision. We will
DQGHI¿FLHQF\ living and mobility to take part in creative a great place to be. We want to achieve share our progress towards achieving our
%XWZHZDQWWRJREH\RQGHI¿FLHQF\ workshops. Working with sustainability this through beautiful store and landscape vision in FY15.
and make our stores an important part experts, they established 12 principles for design, implementing sustainable prac-
of the lives of co-workers, customers and what a sustainable store should be like. tices at every stage of construction and We have already started following some of
the community. Our Kaarst store in Germany and throughout our operations. These stores the 12 principles in new stores:
In FY13, we launched the Sustainable Maebashi store in Japan, opening in FY16 will become hubs for customers to meet,
Store Project by bringing together co- and FY17 respectively, will aim to imple- have a great shopping experience and

A LT O N A S T O R E , H A M B U RG ,
G E R M A N Y: O PE N E D F Y14
$VRXU¿UVWFLW\FHQWUH bike trailers for free if they

location – in a pedestrian return them within three
zone – Altona is unlike most hours, so larger furniture
IKEA stores. items can be taken home
Arranged over seven lev- without the need of a car or
els, windows let in natural van. A bike courier service
light and cars park on the costs between EUR 9.90 and
top four levels. Most cus- EUR 19.90, depending on
tomers travel on foot and by the distance from the store.
public transport. The store has required
Despite having a sales a bigger investment but it is
area of 18,000 m2 – 20% an exciting experiment that
smaller than other IKEA will help us develop a blue-
stores in the Hamburg area print for more sustainable
– it will stock the full IKEA stores.
range.
Customers can rent
cargo bikes, wagons and
P I S A S T O R E , I TA LY:
O PE N E D F Y14
(QHUJ\HI¿FLHQF\LVDWWKHKHDUW
of the store. Z AG R E B S T O R E , C ROAT I A:
Installing LED lights at the store O PE N E D F Y14
has the potential to reduce con-
sumption by up to 60% compared
with traditional lighting. ‘Assembling dreams to- Through a mattress
The photovoltaic plant, the big- gether’ – this is the motto take-back service and
gest roof array in IKEA Italia Retail, for the Zagreb store project, strong communications
has a peak capacity of 690 kW and RXU¿UVWLQ&URDWLD about living a more sustain-
generates around 20% of the store’s Sorting waste and able life at home, customers
electricity. recycling are not the norm will be encouraged to think
Hot water is produced from heat in Croatia. Also, it can take and behave differently
recovered by heat pumps in the VLJQL¿FDQWWLPHDQGHIIRUWWR about waste, recycling
spring, summer and autumn. install photovoltaic panels DQGUHVRXUFHHI¿FLHQF\
In addition to recovering rain- and geothermal heating This aims to help them
water and sorting food, cardboard, systems. save money and reduce
ZRRGSODVWLF¿OPDQGPHWDOZDVWH But with state-of-the-art their carbon footprint.
the store has facilities to make waste management equip-
customer travel more sustainable ment, including cardboard
through a free shuttle bus, two balers, the store aims to
electric vehicle charging posts EHODQG¿OOIUHHDQGOHDGRQ
and plans to become part of the sustainability among local
municipal bike sharing network. retailers.

Investing in renewable energy RENEWABLE ENERGY PRODUCED BY TYPE FY12 FY13 FY14
We are working hard to meet our goal of By 2020, we plan to produce
Wind (GWh) 290 298 410
energy independence. By the end of 2015, as much renewable energy as
Solar PV (GWh) 29 68 90
we aim to have invested and committed all of the energy we consume.
Biomass (GWh) 899 1,059 1,310
to invest EUR 1.5 billion in renewable en-
ergy projects, mainly offsite wind farms Total (GWh) 1,218 1,425 1,810
and photovoltaic (PV) panels installed on Our investment in energy independence Percentage of total energy consumption (%) 34% 37% 42%
our buildings. We have already committed makes good business sense. Being more
to own and operate 224 wind turbines and HQHUJ\HI¿FLHQWDQGSURGXFLQJUHQHZDEOH
RENEWABLE ENERGY (purchased FY10 FY11 FY12 FY13 FY14
have installed 700,000 solar panels on our energy enables us to reduce costs and electricity and on-site generation)
buildings. makes us more resilient by protecting us AS % OF TOTAL CONSUMPTION*
IURPÀXFWXDWLQJHQHUJ\SULFHV Stores 35 41 48 50 53
We contribute to the development of Where possible, we use the energy Distribution centres 34 39 51 54 66
renewable energy by: produced by our wind turbines and solar IKEA Industry 60 61 63 61 63
panels to power our buildings, but in most IKEA Components - - - 49 42
• Investing in our own power genera- cases the electricity is sold to the grid.
Total 47 51 56 56 59
tion equipment, including offsite wind This is because in some countries, nation-
turbines, on-site biomass boilers al regulations and the set-up of electricity
and on-site solar panels. This helps grids prevent us from directly using the
us work towards becoming energy energy we produce. By purchasing renew-
independent. able electricity, we can also indirectly con- of renewable energy. These include adding door IKEA distribution centre. In FY14,
• Purchasing renewable electricity to tribute to more availability by helping to quality criteria for purchased renewable IKEA Industry Divisions Flatline and Solid
supply our stores and other buildings increase demand. energy to or energy purchasing guide- Wood produced 796,800 MWh worth of
(not included as part of our energy In FY14, we produced 1,810 GWh of lines. In FY14, we purchased 1,150 GWh of waste wood pellets and briquettes, which
independence goals). renewable energy, a 27% increase com- renewable energy from the grid. were sold to others.
pared with FY13 and equivalent to 42% More than 63% of the energy used by
We use geothermal equipment to heat of our total energy consumption. That is IKEA Industry is from renewable sources,
and cool some of our buildings. While this ¿YHSHUFHQWDJHSRLQWVPRUHWKDQLQ)< including 80% of its heat energy. Heat
is renewable energy generation, it is not (37%), despite the growth of our business HQHUJ\ LV XVHG IRU GU\LQJ ZRRG ÀDNHV
included in our renewable energy goals which caused energy use to increase by for producing particle boards and planks
because it represents a small proportion 11% in FY14 compared with FY13 (from for making wood furniture. In FY14, we
RIRXURYHUDOOSURGXFWLRQDQGLWLVGLI¿FXOW 3,890 GWh to 4,333 GWh). converted to using biomass boilers at
to measure output. We are taking steps to make sure that wood board production sites in Slovakia
the renewable energy we buy is in line and Sweden.
with the World Resources Institute’s guid- The IKEA Industry facility in Esipovo,
ance on accounting for greenhouse gas Russia, now gets around 30% of its energy
emission reductions through the purchase from a biomass boiler located in the next

New renewable
energy projects
“People talk about renewable en- Projects we worked on in FY14 include:
ergy as ‘alternative’, but that does it a
disservice,” says Steve Howard, Chief • Our new wind farm in Dalarna,
Making our Novgorod 6XVWDLQDELOLW\2I¿FHUDW,.($*URXS Sweden, consisting of seven 120 m
IDFWRU\PRUHHI¿FLHQW “It’s just sensible, mainstream energy.”
We have invested in many solar and
high turbines capable of producing
enough electricity to power 16,000
wind projects to get closer to being Swedish homes
Most IKEA Industry sites use boil- VLJQL¿FDQWO\WRRXUFDUERQIRRWSULQW energy independent. • Our new 1 MW solar system on a
ers fuelled by wood by-products from and throwing away wood as waste was In FY14 we made further invest- store roof in Australia is the largest
operations. In 2013, we acquired a LQHI¿FLHQWDQGDJDLQVWRXUVXVWDLQ- ments – our biggest so far is the com- of its kind in the country
QHZIDFWRU\LQ1RYJRURG5XVVLD¿W- ability principles. In FY14, we began mitment to purchase the Hoopeston • We have PV installations in 20
ted with a gas boiler. The site’s wood engineering works to install an 80 MW wind farm in Illinois, USA. Once it is states in the USA and at 90% of
E\SURGXFWVZHUHVHQWWRODQG¿OODV biomass boiler, which will be running running in early 2015, Hoopeston will our sites there, and are one of the
waste. in the second half of 2016. This will re- generate the equivalent of 165% of the WRS¿YHQDWLRQDOVRODUJHQHUDWLQJ
The low cost of gas in Russia sult in a 75% reduction in the carbon electricity consumed by the whole of companies. Our distribution centre
meant that an investment to convert footprint of the factory, and a 30% IKEA USA each year. in Perryville, USA, recently almost
the boiler to burn wood (biomass) reduction across Division Board. In a similar project in Alberta, Can- doubled the size of its solar array to
would not meet our required eight- The decision is in line with our ada, we have committed to purchase a give an output of 4.6 MW.
year payback period. goal for IKEA Industry to be carbon 46 MW wind farm which will generate
Despite this, we decided to go neutral and to build a business that is more than twice the total energy used
ahead because the gas boiler added resource and energy independent. by IKEA Canada.

Transport FDQKDYHDELJLPSDFWRQWKHHI¿FLHQF\RI
Around 7.5% of our total carbon foot- transport because the more products we
print is from customer and co-worker FDQ¿WLQWRDFRQWDLQHUWKHIHZHUMRXUQH\V
travel and 3.2% is from transporting our we need to make. This lowers our costs
products. and our CO2 emissions.
In FY14, we reduced CO2 emissions per
Product transport cubic metre of products transported by
We sell millions of products in countries 12.8% compared to FY11, taking us closer
around the world every day – so our ser- to our target of 20% by FY16. This is a 2%
vice providers need to move products improvement on FY13, short of our goal of
HI¿FLHQWO\ IURP VXSSOLHUV WR GLVWULEXWLRQ 3.5%. The main reason we did not meet
centres and on to stores, or direct from our annual goal was a decrease in the uti-
suppliers to stores, by rail, road and sea. lisation rate (cubic metres of products per
(I¿FLHQF\LVHVVHQWLDOWRWKH,.($EXVL- shipment) in some regions. We are looking
QHVVLGHDDQGWKLVLVUHÀHFWHGLQWKHZD\ for ways to improve by focusing on:
we design our product range and ship- • Reducing the number of shipments by New trucks reducing
ments to minimise the number of journeys improving our ordering process, equip- delivery emissions
and distances travelled. Packaging and ment, packaging and net cubic metres
the way products are packed into vehicles of transported goods per shipment Moving our products to and from Together with our suppliers, we are
IKEA stores contributes to our local investigating the possibility of install-
emissions. Changing transport meth- ing public biogas refuelling stations.
T R ANSP ORT OF PRODUC T S ods and fuels is a way to reduce this In southern Europe, we are replacing
pollution. conventional fuels in long-haul trucks
FY12 FY13 FY14 GOAL All local customer deliveries from DQGXVLQJFRPSUHVVHGRUOLTXH¿HG
2016 our Kungens Kurva store in Stock- natural gas (CNG and LNG) instead.
holm, Sweden – around 36,000 a year Compared with regular diesel trucks,
Increase in cubic metres of products per 2.5% 1.7% 1.5% -
– are made by trucks run on biogas the initial investment in these models
shipment (m3/shipment) compared with the
made from waste. Biogas can be is around 25% more, but they are qui-
previous year
made from almost any organic mate- eter and produce fewer emissions.
Reduction in CO2 per cubic metre of products 7.3% 10.8% 12.8% 20% rial, such as agricultural and forestry In Spain, all the trucks that replen-
transported (CO2 grams/m3) compared with FY11 waste. Using it can result in CO2 sav- ish stock in our Valencia store use
% of products delivered directly from 56 60 58 - ings of more than 25% and completely CNG and LNG, and by spring 2015, all
supplier to stores prevent sulphur dioxide and particu- the trucks we use to transport goods
late emissions. in the Piacenza area of Italy will be
We are working closely with care- fuelled by LNG. We are planning to
FY10 FY11 FY12 FY13 FY14 fully selected partners who provide us extend the use of CNG and LNG across
with a reliable source of pure biogas Europe, including in Italy, the Neth-
Filling rate for transport of prod- 63 64 62 62 64
DQGHI¿FLHQWYHKLFOHVZKLFKUXQRQLW erlands, Portugal and Spain. We are
ucts (%)
We want to create a strong infrastruc- already using LNG for transporting
Net cubic metres of transported - - - - 55.4* ture for our roll-out of these delivery products in China and will continue to
goods per shipment trucks, and encourage more compa- expand this into other parts of Asia
nies and customers to use them too. and North America.
*
In FY15, the m3VKLSPHQW.3,ZLOOUHSODFHWKH¿OOLQJUDWH

5 5 R ESOURC E AND ENERG Y INDEPENDENC E • Developing common methodologies for deliveries, often in towns and cities,
for measuring and reducing CO2 and to customer homes or pick-up points, we
other transport emissions, formulating KDYHDPD[LPXPYHKLFOHDJHRI¿YH\HDUV
approaches to public policy, the use This is because driving in urban areas is
of alternative fuels and fuel consump- OHVVIXHOHI¿FLHQWWKDQRXWVLGHFLWLHV
tion in partnership with Green Freight In our warehouses, we use shunt-
Europe, Green Freight Asia and the ing trucks to move shipping containers
Clean Cargo Working Group from BSR, and trailers, and forklift trucks to move
a sustainable business membership products. They account for around 10%
organisation. of CO2 emissions from distribution cen-
tres. We have been exploring alternative
We increased the volumes per ship- technologies that produce fewer harmful
ment by 1.5% in FY14, compared with emissions, such as hydrogen fuel cells for
)< DQG RXU ¿OOLQJ UDWH LQFUHDVHG WR forklift trucks and electric shunting trucks
:HDUHUHSODFLQJµ¿OOLQJUDWH¶ZLWKD to test whether they could replace vehicles
new key performance indicator (KPI) that using conventional fuels.
measures the net cubic metres of trans-
Streamlining our ported goods per shipment, which was
55.4 m3 in FY14. We switched from con- To help us accelerate reductions
services for customers ventional containers to high containers of CO2 emissions from the transpor-
ZLWK H[WUD YROXPH ZKLFK FDXVHG WKH ¿OO- tation of our products, we are
We want everyone to be able to bly and installation).
buy our products whenever, wherever That is why we decided to change ing rate to decrease in some cases, de- working on a strategy for reducing
and however they want. Our aim is to how we manage home delivery trans- spite having more products per shipment. and replacing fossil fuels.
ensure it is convenient for customers port and associated services. We are 7KHQHZ.3,EHWWHUUHÀHFWVWKHHI¿FLHQF\
to shop online or travel to our stores currently creating new distribution and
on public transport and have their supplier structures, and updating our
of our transport because it is not affected
purchases delivered to their homes IT systems, so that we have a consist- by the type of equipment we are using to In FY15, we will involve external stake-
E\HI¿FLHQWORZHPLVVLRQVYHKLFOHV ent approach to all the transport ser- transport our goods. holders, such as NGOs, policymakers and
To make this a reality, our delivery vices we offer, including home deliv-
In April 2014, the roll-out and imple- suppliers who will challenge and inspire us
VHUYLFHVPXVWEHHDV\WRXVHÀH[LEOH ery. By making our transport services
and affordable. PRUHHI¿FLHQWZLWKVKRUWHUGHOLYHU\ mentation of IWAY 5.1, our supplier Code to be ambitious.
We have some way to go. Our re- times, fewer mistakes and items going of Conduct, was complete and all trans- Our home delivery service is becoming
search shows that our customers love missing and greater choice, we will port suppliers must now meet its require- more important to our business, especially
our stores, catalogue and products, make our customers happier while
but they want us to do better on home cutting the number of journeys and ments. Because national engine emis- as customer travel habits and expecta-
delivery and services (such as assem- reducing CO2 emissions. sions standards vary, we adapted our road tions of us change (see page 57 for more
WUDQVSRUWJXLGHOLQHV2QO\WUXFNVWKDWIXO¿O on customer travel).
the national engine emissions standards In FY14, IKEA Transport became IKEA
• Increasing the use of rail, barge • Working with our transport suppliers may be used. In countries where no engine Transport and Services because our trans-
and sea and moving away from road to explore ideas and test innovations emission standards exist, trucks must be SRUW RSHUDWLRQV QHHG WR UHÀHFW WKH LQ-
transport, which produces higher CO2 that can reduce CO2 emissions, such no older than 10 years. For smaller trucks creasing demand for home delivery and
emissions DV PRUH HI¿FLHQW YHKLFOHV DQG PRUH (weighing up to 3.5 tonnes) that are used assembly and installation services. Bring-
sustainable fuels

ing all our product transport and service tinue to reduce travel where possible. But
requirements into one organisation makes sometimes travel is necessary and we en-
XVPRUHHI¿FLHQWVHHIHDWXUHRQSDJH sure that our booking tools, information
available on IKEA Inside (our co-worker
Co-workers’ meetings and travel intranet) and travel companies help co-
6LPSOLFLW\ HI¿FLHQF\ VDIHW\ VXVWDLQ- workers select the most sustainable op-
ability, cost-consciousness and common tions for transport, accommodation and
sense are the guiding principles for the meetings. Public transport is always the
way our co-workers meet and travel. We ¿UVWFKRLFH
avoid unnecessary trips and meetings to We have reduced the number of travel
protect the well-being and life balance of management suppliers we work with, so
our co-workers, and to reduce our impact WKDW ZH FDQ EH PRUH HI¿FLHQW DQG FDQ
on the environment. We have invested in work more closely together to make the
134 video meeting facilities, which have right sustainable travel decisions.
been installed at IKEA sites worldwide to We have implemented an improved
support our ‘green meetings’ approach system for gathering and reporting travel
for face-to-face and virtual meetings. In data. This will enable us to understand
FY14, virtual meetings – web and phone – costs, travel patterns, booking behaviour
increased by 26%. We reduced our busi- and policy compliance better and identify
ness travel costs relative to sales by 29% how to improve our approach to travel. For
Inspiring co-workers to
in FY14 (37% in FY13), compared with the example, it will help us weigh up the ben- change their commuting habits
FY07 baseline. We did not reduce travel H¿WV DQG FRVWV RI UDLO RYHU DLU WUDYHO DQG
costs at the same rate as FY13 because support us to expand the use of bio-fuel It is not just our customers who As part of the campaign, we made
need to access IKEA stores – co-work- electric bikes available to co-workers
of business growth, and we aim to con- rental cars. ers around the world make thousands in Itingen, Switzerland to encourage
of journeys to and from work every them to cycle to and from work. This
day. We want to encourage our co- was particularly good for co-workers
workers to travel in the most sustain- who would not normally cycle be-
BUSINESS TRAVEL FY09 FY10 FY11 FY12 FY13 FY14
able way possible. Alternative forms of cause the distance between home and
Number of web and 52,000 82,434 104,920 146,015 189,416 235,121 transport are good for the planet and work is too far to cycle on a conven-
phone meetings WKH\RIWHQSURYLGHKHDOWKEHQH¿WVWRR tional bike. There was a prize for the
co-worker who travelled the furthest
Number of hours of - 760 2,800 6,900 12,407 19,081 Across Distribution Services (DS) using either an electric or conventional
video meetings in Central Europe, we regularly hold bike, or another alternative mode of
co-worker mobility campaigns be- transport. Around 300 co-workers
Business travel expend. 69 67 66 72 63 71 tween June and August. Co-workers across DS Central Europe participated,
index (travel costs in who travel to work using bicycles, raising around EUR 5,000 for charity.
relation to sales: public transport or car sharing earn a
FY07 = 100)
donation for every kilometre travelled, See more about how we engage
IKEA sites with video - - 70 110 130 134 which goes towards local charities run- and inspire our co-workers on page 73.
meeting facilities ning mobility projects.

Norway Sweden
Canada Russia
United Kingdom
Belgium
France
Austria
United States Germany
Switzerland Japan
Spain China
Italy
Netherlands
Poland
Croatia
Australia
C O U N T R I E S W H E R E W E H AV E
E V C H A R G I N G S TAT I O N S
Customer travel affordable home delivery and publicising

Most of our stores are located outside public transport information, such as bus
Plugging in to town centres, so travel is often part of the DQGWUDLQWLPHWDEOHV2XU¿UVWFLW\FHQWUH
electric transport experience of visiting IKEA. We want the store is in a pedestrian shopping area in
millions of customers who visit our stores Hamburg and around 80% of our visitors
We want to enable our customers which supplies the electricity. Custom- every year to be able to travel easily and and customers travel to the store without
to live more sustainable lives, and this ers can recharge their electric vehicles cost-effectively, without affecting local a car, by walking or using public transport
journey should begin at our stores. (EVs) for free while they shop – plug in communities or harming the environment. (see page 51).
“By 2020, we expect far more of for just 30 minutes to go from empty
our customers will travel to and from to 80% charged.
Car ownership is declining in some In Poland, we are encouraging custom-
our stores using electric vehicles and Within six months, the IKEA Leeds countries, but currently most customers ers to cycle to our stores by offering free
car sharing. We are encouraging them store became the sixth most used of WUDYHO E\ FDU ± WKLV FRQWULEXWHV WR WUDI¿F bicycle maintenance facilities, such as re-
to make this change now, and invest- all charging points in the UK.
congestion and air emissions, and it can pair tools and pumps. We currently offer
ing in the infrastructure to help make In France, we rolled out a fast
it happen,” says Radek Pazour, Global charging network across all our stores, also be expensive because of rising fuel this at three stores and plan to roll out to
Customer Relations Manager, IKEA in partnership with Nissan. We held prices. more in FY15.
Group. events across the country that gave We are encouraging newer ways to
We have installed charging points customers a fun introduction to elec-
in 18 countries and all of our largest tric vehicles, including opportunities travel, such as car sharing, including elec-
markets. Over 25% of our stores now to learn more about alternative Over 90% of our stores are tric car pools. Over a quarter of our stores
have charging points. We continue to mobility and even take a test run accessible by public transport and now offer charging stations for electric ve-
roll this technology out across other in an electric car.
markets. We installed charging points at
this is a must for any new store. hicles. In Paris, customers will be able to
'XULQJ)<ZHEHFDPHWKH¿UVW many stores during FY14, including at rent an electric van or book zero emission
UK retailer to offer rapid electric our Atlanta store in the USA, Klagen- home delivery from autumn FY15.
vehicle charging points at all stores. IXUWVWRUHLQ$XVWULD3R]QDĔVWRUHLQ
We encourage customers to use the
We are partnering with Nissan, which Poland, Zagreb store in Croatia and
provides the charge points, and with nine stores in Italy. service by providing free shuttle buses
green energy provider Ecotricity, between public transport hubs, offering

5 8 R ESOURC E AND ENERG Y INDEPENDENC E we reconstructed the reservoirs at one of Waste
our largest sites to increase its capacity Our long-term aim is to send no waste to
for water harvesting and reuse. But this ODQG¿OO:HVHWDWDUJHWRIUHF\FOLQJRUUH-
WATER USE BY FY10 FY11 FY12 FY13 FY14 meant that we could not reuse water at covering energy from 90% of our waste by
IKEA UNIT (m3) that site during the installation. At another August 2020. The original deadline was the
Stores 3,927,551 4,438,075 4,608,175 4,775,309* 4,853,478 site we installed a wet electrostatic precip- end of FY15, but we adjusted it because
LWDWRU :(63 HPLVVLRQ ¿OWHU ZKLFK XVHV although we were very close to achieving
Distribution centres 265,524 228,772 223,292 224,430 197,953
ZDWHUYDSRXUWR¿OWHURXWJDVHVIURPSUR- our goal, some countries outside Europe
IKEA Industry 766,373 1,014,603 1,315,821 1,280,350 1,468,498 duction and reduce emissions. We plan to do not have the recycling infrastructure
IKEA Components - -
- 4,830 4,711 adapt it to reuse water. All sites are work- needed for us to reach our target within
LQJRQVSHFL¿FVWUDWHJLHVWRPRYHWRZDUGV this timeframe.
Total 4,959,448 5,681,450 6,147,288 6,284,919 6,524,640
being water positive by 2020. In FY14 we introduced an even more
* Data for stores in FY13 restated from FY13 report (3,853,637) as it was not complete Read more about our water positive ambitious target – 80% of the waste from
strategy on page 35. stores and distribution centres and 90% of
WA S T E P R O D U C E D H O W WA S T E I S D I S P O S E D
Water in our operations I N F Y 14 (%) O F I N F Y 14 (%)
We use an estimated 770 million m of 3
We are working on reducing
water per year in our own operations and water use and impact in our retail
across our extended supply chain. The operations, particularly in
methods we use to understand our water waterstressed regions.
use and risks helps us to identify the loca-
tions and materials that have the biggest
water impact. Most water impact is from For example, we have installed a mem- Stores 77.5% Share of total waste recycled 77.2%
sub-suppliers who produce raw materials, brane bioreactor treatment plant which
IKEA Industry 10.0% Share of total waste incinerated 12.1%
such as cotton, and from processing sites can clean wastewater at our new store in for energy recovery
Distribution centres 8.2%
like dyeing mills. You can read more about Pisa, Italy. The treated water can be re- Share of total waste incinerated 2.1%
IKEA Components 4.3%
how we support cotton suppliers to man- used for in-store bathrooms and for irriga- without energy generation*
age water on page 31. Read about how we tion. We estimate the treatment plant will 6KDUHRIWRWDOZDVWHWRODQG¿OO 8.6%
are working with our direct suppliers to re- halve the store’s water use. Includes small amount sent to aerobic and anaerobic
*
digestion. Figures not available to report separately.

duce their water impact and energy use At IKEA Industry Group, we are reus-
on page 62. ing and recycling the water we use during HOW WASTE IS Recycled Incinerated Sent to Incinerated
In FY14, IKEA buildings used 6,254,640 manufacturing and returning some of the DISPOSED OF IN for energy ODQG¿OO without
m3 of water, 3.8% more than in FY13. We storm water to the local water cycle. Our FY14 (%) recovery energy
recovery
have restated our FY13 data to include all water use increased by 14.7% in FY14.
Stores 77 13 8 2
stores, and we have worked to improve The greatest increase was in IKEA Indus-
the data collection process during FY14. try Group Division Solid Wood, where we Distribution Services 81 11 3 5
have invested in new sites and upgrades IKEA Industry Group 66 11 23 0

of facilities at existing sites. For example, IKEA Components 100 0 0 0

5 9 R ESOURC E AND ENERG Y INDEPENDENC E by business units).
In the majority of countries where we CONVERTING TO
waste from IKEA Industry that is not sent waste material, and make it easier for it to have stores, food waste from customer A CIRCUL AR ECONOMY
WR ODQG¿OO PXVW EH PDWHULDO UHF\FOHG QRW EHUHF\FOHG:KHUHSRVVLEOHZH¿QGZD\V restaurants and co-worker canteens is
incinerated or used for energy recovery, to reuse it to make our products. This is sorted for composting or sent to a third IKEA is a part of the Circular
party to convert it into biogas that can be Economy 100 (CE100), a global
by August 2020. good for the environment and reduces
platform established by the Ellen
This will be very challenging in some costs. used as fuel for cars and buses, or as ani- MacArthur Foundation to bring
countries, but with more time, we aim to mal feed. But this still leaves some coun- together companies and innovators
support the development of the necessary Performance in FY14 WULHV ZKHUH IRRG ZDVWH LV VHQW WR ODQG¿OO from around the world with a single
goal: to speed up the transition to
facilities and processes in these countries. In FY14, we generated 477,714 tonnes of because they do not have the necessary a circular economy.
Because most of our waste is generated in waste, 13% more than in FY13. Our mate- infrastructure.
stores, we have added a new target – to rial recycled rate was 77.2%, and 12.1% IKEA Industry Group produced 6.2% The idea is to move beyond
the traditional linear ‘take, make,
reduce waste from our store operations by was incinerated for energy recovery. This less waste in Divisions Flatline and Solid
dispose’ model, and to create an
10% compared with FY13. is a total of 89.3%, compared to 88.1% in wood (measured in kg of waste/m2 prod- economy which mimics renewal
)<7KLVLVWKH¿UVW\HDUWKDWZHKDYHUH- uct produced) and 13.8% less in Division cycles of the natural world. A
ported the recycling and energy recovery circular economy relies more on
Board (measured in kg waste/m3 board-
renewable energy, minimises
As a minimum, all stores sort rates separately (see table for breakdown sproduced). Overall, IKEA Industry Group chemical use and eradicates waste.
materials such as cardboard, glass,
metal, paper, plastic and wood for re- Being part of the CE100 allows us
to build on our existing partnerships
cycling, and many have implemented and learn from our peers. We are
WASTE RECYCLING RATE (% total FY10 FY11 FY12 FY13 FY14
new initiatives to increase recycling. amount waste recycled or energy a member of the working group on
recovered)1 fabric and textiles alongside compa-
QLHVOLNH$TXD¿O+ 0DQG0 6
Stores 84 86 88 89 90 We meet regularly and collaborate
In FY14, 90% of all waste at our stores Distribution centres 91 90 94 95 92 to develop new opportunities for
was sent for recycling or energy recovery. closing the loop in our operations.
IKEA Industry 2
- - - 79 77
Key facts about the CE100:
Because a big proportion of our waste is
IKEA Components - - - 98 100
from packaging, we are working on ways • Number of participants: around
Total 82 85 86 88 89
to reduce the amount of packaging we use 50 (goal is 100)
to transport products to stores and cus- • Key stakeholders: corporations,
WASTE PRODUCED, FY10 FY11 FY12 FY13 FY14 emerging innovators and regions/
tomers (see page 54 for more on product governments
TONNES3
transport). Two-thirds of our stores have • Focus areas: insight, innovation
Stores 279,778 307,877 335,167 338,463 370,040
compacting machines for processing card- and education
Distribution centres 34,369 41,758 41,933 39,428 39,196 %HQH¿WVFROOHFWLYHSUREOHP
board, which makes up a big proportion
IKEA Industry 4 41,191 50,798 48,146 43,054 47,983 solving and capability building
of our product transport packaging. By in- 2XWFRPHV¿QDQFLDOJDLQ
stalling balers – machines that compress IKEA Components - - - 1,391 20,495 resilience, growth, innovation
Total 355,338 400,433 425,246 422,336 477,714 and job creation.
WKH PDWHULDOV PRUH HI¿FLHQWO\ ± ZH FDQ
reduce the number of journeys needed to 1
Excludes waste wood used for energy recovery or reused in products. 2 Figures restated from FY13 due to Read about how we are develop-
remove the material from stores by 80%, changes in the methodology used in Division Board, and the integration of Division Board and Divisions Flatline
and Solid wood (formerly Swedspan and Swedwood). 3 Excludes waste wood used for energy recovery or re-
ing products made from recycled
increase the amount we can earn for the used in products. 4 Figures restated from FY13 due to changes in the methodology used in Division Board, and and renewable materials on page 37.
the integration of Division Board and Divisions Flatline and Solid wood (formerly Swedspan and Swedwood).

6 0 R ESOURC E AND ENERG Y INDEPENDENC E recycled and recovered energy from furniture to families in need. We be-
76.9% of their waste. lieve that giving furniture a second life
In FY14, we launched a new waste is the right thing to do. But all furni-
management guideline and reporting sys- ture we sell or give away must be safe
tem that will give us data to track perfor- to use and we are developing global
mance and identify areas that need to be guidelines to support stores in every
improved so that we can meet our tar- country to offer used furniture without
gets. We also launched Recovery Direction compromising the safety of custom-
FY14-16, a strategy for preventing unnec- ers. The guidelines will be completed
essary costs due to damaged packaging in FY15, ready for roll-out to countries
and products, and increasing our revenue in FY16.
and reducing waste by giving our products
a second chance. In the Netherlands and Norway, stores
are collecting unwanted textiles. Dur-
• New KPIs for recovery introduced in LQJWKH¿UVWVL[PRQWKVRIWKHSURMHFWVL[
FY14 better support stores to take stores in the two countries collected over
proactive, preventative measures to 11,000 kilograms of textiles. These are
avoid unnecessary waste. currently donated to independent clothing
Giving Belgian • We have been installing repacking collection charities for reuse and recycling.
furniture a second life machines in 190 existing stores since We are exploring the possibility of using
FY12 and they are available in all new these textiles to make products to be sold
Half of our Belgian customers buy- voucher and we resell the product. stores. We use spare parts to repair at IKEA stores, and ways to involve our
ing new furniture either leave their old • Donate it. Social enterprises that products as well as repackaging them. customers in the design process. The pro-
items at home to collect dust or take support vulnerable people come to In FY14, we repaired or repackaged ject is being rolled out across all six stores
them to a waste collection site. More our stores weekly to collect second-
26% of the damaged items that were in Norway, and 13 in the Netherlands.
than 40% have not considered other, hand items to sell on.
more sustainable options for what • Renew it. We run workshops for returned by customers, or damaged
happens to their unwanted items. IKEA FAMILY members where they during transport or in-store. By FY16
Old furniture takes up space and is a can learn how to renew or update
we aim to repackage and sell 30% Customers can recycle light
missed opportunity to save money and their furniture for different uses.
material. • Fix it. Spare parts for furniture and which will generate around EUR 7.5 bulbs and appliances when they
We did some research to under- appliances are available online and million in additional revenue. visit our stores. The items are
stand how we can make it easy for in-store. • Customers can return unwanted IKEA collected by specialists.
IKEA customers in Belgium to reuse • Give it back. For a small fee, cus-
and recycle our products and live as tomers can give back appliances, furniture to our stores to be sold again
sustainably and affordably as possible. mattresses and sofas when they or donated to charity. This is available
The people we talked to came up with receive a replacement by home in Belgium, France and the UK, and at Read more about how we are enabling
¿YHLGHDVZKLFKDUHQRZEHLQJLPSOH- delivery.
some stores in other countries. In the customers to reduce waste at home on
mented in stores across Belgium:
The old items are then donated or 8.FXVWRPHUVSD\DQRQSUR¿WIHHIRU page 18.
• Sell it. Customers can return their recycled. See page 11 for more on items to be collected when IKEA de- Read more about how we are reus-
furniture in good condition to how we are supporting customers to
livers new ones. IKEA then donates ing waste materials in our products on
an IKEA store, where they get a live a more sustainable life at home.
the old items to charities who give the page 38.

Putting waste wood to good use hyde can be toxic. Therefore we work to en-
at IKEA Industry sure that the amount of formaldehyde used
IKEA Industry makes products and prod- as glue component in our wood-based pan-
uct parts for IKEA, including solid wood, els is as low as possible. To ensure the safety
ÀDWOLQHDQGERDUGIRURXUIXUQLWXUH of our suppliers, co-workers and customers,
In FY14, 922,304 tonnes of waste wood we work within one third of the emissions
were produced by IKEA Industry Group, of limits permitted by the EU, and we require
ZKLFKDURXQGZHQWWRODQG¿OO7KHUHVW our home furnishing suppliers to work within
was reused internally or sent for energy one half of these emissions limits.
recovery. We reuse the waste to make We carefully monitor air emissions of
new wood boards or sell it on as a raw ma- formaldehyde from our board factories
terial wherever possible. Waste that is not to ensure they are below our strict limit
suitable for reuse is made into pellets or (max. 10 mg/m3, or 50% German TA Luft
briquettes that can be used as a renew- (German Clean Air Ordinance) air limit of
able fuel by other companies. 20 mg/m3). We respond to changes in leg-
islation quickly to ensure we are always in
IKEA Industry chemical management compliance.
We take great care to manage potentially Our new factory in Novgorod, Rus-
harmful chemicals used at IKEA Indus- sia is fully compliant with our air emission
try and we look for alternatives wherever standards. Although not required by Rus-
possible. We always comply with legis- sian law, we installed a new wet electro-
lation and we take the risk of co-worker VWDWLF SUHFLSLWDWRU :(63 HPLVVLRQ ¿OWHU
exposure to chemicals particularly seri- during FY14 to keep the factory in line with Getting the most
RXVO\,QVRPHFRXQWULHVFODVVL¿FDWLRQRI the same internal emission standard as in
from waste wood
how chemicals can harm people or the the EU units.
environment and exposure limits are not See page 41 for more on how we use Using recycled material is a great ways to change this by improving
controlled by law. But we aim to improve chemicals in our products. ZD\WREHPRUHVXVWDLQDEOHEXW¿QG- existing machines and investing in
standards in our factories in these coun- ing clean materials can be hard. new equipment. For example, magnets
In Lure, a small town in eastern are used to extract metals and the
WULHV E\ DSSO\LQJ WKH VDPH FODVVL¿FDWLRQ
France, IKEA Industry buys crushed remaining contaminants are separated
and exposure limits in all IKEA Industry recycled wood from a waste recycling and then either recycled or burned for
sites and ensuring the safety and decent site to make wooden boards. Unfortu- energy recovery.
working conditions of all co-workers. nately, glass, metal, plastics and In FY14, after three years, the
stones are often hidden in the mix and YROXPHRIPDWHULDOVVHQWWRODQG¿OO
When there is no alternative to using DW¿UVWZHKDGWRWKURZDZD\DOPRVW has been cut to zero. Now, the
potentially harmful chemicals, we take 100kg for every ton of material we 485,000 m3 of particle board made
extra safety precautions and have strict were buying. at IKEA Industry Lure each year
A team of co-workers investigated contains 55% recycled wood.
standards governing their use. For exam-
ple, exposure to high levels of formalde-

Energy and water in Encourage and enable our direct suppliers We achieved a 19% increase in energy
our supply chain WREHFRPHPRUHHQHUJ\HI¿FLHQWE\

August 2017, compared to FY12.
HI¿FLHQF\DWWLHUKRPHIXUQLVKLQJ
suppliers compared with FY12.
'H¿QHGDVWRWDOHQHUJ\FRQVXPHGP3
of goods.
By August 2015, reduce carbon emissions We achieved an 11% reduction in carbon

of our suppliers by 20%, compared to emissions from tier 1 home furnishing
FY12. suppliers compared with FY12.
In relative terms, measured by CO2/m3
goods purchased
production volumes and then combined

S U P P L I E R S U S TA I N A B I L I T Y
to create an overall Index score. This
I N D E X (index score, weighted by
gives us a picture of how our suppliers are production volumes out of 100)
improving.
We have been using the Index since
64
FY12 and supplier results have improved
VLJQL¿FDQWO\(YHU\\HDUEHWZHHQ)<WR
FY15, we aim to improve the Index score 51
by 20% compared to the previous year.
In FY14, we collected data on carbon and 39
water from suppliers covering 97% of our 33
total purchasing volumes. The Index score
improved by 25% compared to last year, FY14
exceeding our target. We achieved this by FY13
continuing to support our suppliers to im- FY12
We have 1,002 home furnishing suppliers mance of our home furnishings suppliers, prove their energy management and in- FY11
and we work with them to reduce their use and plan improvements together. The In- crease their use of renewable energy.
of energy and water. This effort contributes dex scores feed into the Product Sustain- The criteria are not set in stone: we
greatly to achieving our overall environ- ability Scorecard (see page 38) – a tool constantly seek suppliers’ feedback to de- our workshops focused on the Product
mental objectives, while saving money for for improving the sustainability of our velop and improve the Index. Many of our Sustainability Scorecard and improving
our customers, suppliers and the business. products. long-term suppliers are keen to add more the Supplier Sustainability Index. Sugges-
The Index covers energy management criteria to increase its scope. tions included adding criteria on logistics,
Supplier Sustainability Index DQG HQHUJ\HI¿FLHQW SURGXFWLRQ UHQHZ- At our Global Supplier Sustainability water and chemical management. Suppli-
Our Supplier Sustainability Index enables DEOHHQHUJ\DQGUDZPDWHULDOVHI¿FLHQF\ Days in May 2014, we brought together ers also wanted to include more challeng-
us to measure the sustainability perfor- 6XSSOLHU VFRUHV DUH ZHLJKWHG WR UHÀHFW suppliers from across the world. One of ing social criteria. See page 64.

6 3 R ESOURC E AND ENERG Y INDEPENDENC E Supply chain – energy Suppliers Go Renewable
and carbon
Certain parts of our value chain, such
as raw materials extraction, production We work with all our suppliers to
and distribution, produce more carbon LPSURYHHQHUJ\HI¿FLHQF\DVSDUWRI
emissions than others. Our tier 1 home our normal business relationship.
furnishing, catalogue and food suppli-
ers represent around 8.1% of our total
carbon footprint. Glass and textile pro- Through our Suppliers Go Renewable pro-
ducers are the most carbon-intensive ject, we are working more closely with a
sectors. group of higher impact suppliers to enable
WKHP WR EHFRPH PRUH HQHUJ\ HI¿FLHQW
and to generate and use more renewable
energy.
The projects are designed to reduce en-
ergy use and emissions, and save money.
Performance in FY14
Total reported energy consumption and carbon emissions continued to
GHFUHDVHGXHWRLPSURYHPHQWVLQHQHUJ\HI¿FLHQF\HQHUJ\PDQDJHPHQWDQGPRUH
accurate data. In FY13 we introduced more complete reporting of greenhouse
gas emissions.
Bringing our TIER 1 HOME FURNISHING (HF) FY12 FY13 FY14

suppliers together SUPPLIER ENERGY CONSUMPTION AND
CARBON EMISSIONS
We learn a lot from working with production. For example, Yuyue Home Energy consumed (MWh) 7,852,933 7,132,305 6,743,521
all our suppliers, and we want to en- Textile, a Chinese supplier, explained
courage them to share with each other KRZLWKDVLPSOHPHQWHGHQHUJ\HI¿- (QHUJ\HI¿FLHQF\N:KP product purchased)
3
308 274 250
as well. cient technology, waste recovery and
Twelve suppliers with good per- recycling. It is exploring innovations ,QFUHDVHLQHQHUJ\HI¿FLHQF\WLHU+)VXSSOLHU - 10.9 18.8
formance in sustainability attended such as alternative textile dyeing compared to FY12 (%)
RXU¿UVW*OREDO6XVWDLQDELOLW\'D\V techniques to reduce water and
for suppliers in Älmhult, Sweden in chemical use. Renewable share (%) 24.8 25.3 26.6
May 2014 to share their experiences The event included workshops on
CO2 equivalent (tonnes) 2,024,195 2,061,295 1,888,114
and best practice across all areas of topics such as the Product Sustain-
sustainability, including energy and ability Scorecard (see page 38). We Reduction in relative carbon emissions from - 0% *
11.4%
resource scarcity. listened to feedback on how to im- our tier 1 HF suppliers compared to FY12 (%)
They highlighted the importance prove this tool, for example providing
RIQHZPRUHHI¿FLHQWWHFKQRORJ\DQG scorecards adapted to each industry. CO2 HI¿FLHQF\NJ&22/m3) 79 79 70
the opportunities for on-site energy
*
5HVWDWHGIURP)<GXHWR¿QHWXQLQJRIFDOFXODWLRQV

6 4 R ESOURC E AND ENERG Y INDEPENDENC E We use what we have learned from these Water in our supply chain
projects to support and train other suppli- We target our efforts on water manage-
ers to improve their energy management. ment in areas where we can have the
Managed by our regional sustainability de- greatest impact.
velopers, there were 40 projects in total Among our direct suppliers, textiles and
during FY14. metals producers use the most water, and
Projects begin with an energy audit to have the greatest water impact. At the raw
assess the supplier’s energy use and to materials level, cotton cultivation accounts
LGHQWLI\RSSRUWXQLWLHVIRUJUHDWHUHI¿FLHQ- for the biggest share of water use and
cy and generating or using renewable en- impact among our sub-suppliers.
ergy. IKEA and the suppliers split the cost The countries where our suppliers use
of the audit, which is usually carried out by the most water are Bangladesh, China,
external consultants. Once the opportuni- India, Pakistan and Turkey – all located
ties have been discussed with suppliers we LQUHJLRQVRIVLJQL¿FDQWZDWHUULVN
work together to create an action plan to
improve energy performance.
Average energy savings identi-

¿HGDUHDURXQGZLWKSD\EDFN
periods of as little as three years.
Supporting suppliers
to save energy Return on investments for renewable en-
ergy solutions, such as photovoltaic (PV)
We have completed 40 energy with external and internal audits, and panels and biomass boilers, tend to be
projects with suppliers in more than supporting the implementation of new much longer and are often linked to na-
15 countries. solutions.
tional subsidies.
,Q)<ZH¿QLVKHGIHZHUSURMHFWV In FY15, we will continue to deliver
than we had planned, but we are con- the remaining energy projects and In FY14, Asian Fabrics, a textiles sup-
¿GHQWWKDWZHZLOO¿QDOLVHSURMHFWV share the knowledge we are gaining plier in India, achieved 100% energy in-
in FY15 to reach our goal of between so that more suppliers can implement dependence after installing a 1.5 MW PV
90 and 100 by August 2015. some of the tried and tested improve-
Increasingly, IKEA’s in-house ments. array and four turbines that generate 20
sustainability developers are gain- Some of our more advanced sup- MW wind energy. The supplier did not re-
ing the skills and experience to lead SOLHUVDUHDOUHDG\HQHUJ\HI¿FLHQWEXW ceive any government subsidies and it es-
the audits. To support them, we have do not have easy access to renewable
developed an energy assessment tool energy. We will support them with
timates that the payback period is up to
WKDWLGHQWL¿HVDQGTXDQWL¿HVHQHUJ\ expertise and access to more special- eight years. Asian Fabrics has presented
HI¿FLHQF\SRWHQWLDO(YHQWXDOO\ZH ist technology so they can continue their project to other IKEA suppliers to
hope to expand the support avail- to improve.
support and motivate them to make simi-
able to suppliers, including assistance
lar renewable energy investments.

Building momentum Small changes make

for energy saving a big difference
“Meeting our sustainability goals For the past four years, Aurora Making furniture can use a lot of “Thanks to our partnership with
means working closely with our sup- has been working hard to change this energy, which is needed to power tools IKEA, we now better understand
pliers,” says Aurora Bossi, one of 12 mindset, and with success. Suppliers and ventilation systems. that sustainability is a company-wide
IKEA sustainability developers who across southern Europe have been Nafoco, one of our biggest furni- effort,” explains Mr Tuan. “Small
focus on energy projects with suppli- ¿QGLQJZD\VWREHPRUHHQHUJ\HI- ture suppliers in Vietnam, has been changes have made a big difference.
ers around the world. ¿FLHQW working with IKEA over the past year For example, our ventilation systems
“We will never meet our ambitious “These organisations are realising to transform the way it uses energy. used to run round-the-clock but are
sustainability goals unless we partner that the initiatives we help them intro- “We used to run our factories based now only switched on when they’re
with those who share our values and duce can result in a better workplace, on what was required by our custom- needed.”
extend our positive impact on people saving money, and becoming a better ers and legal regulations. But IKEA Nafoco is on track to save more
and the planet throughout the supply business.” has encouraged us to think creatively than EUR 44,000 on its energy bill.
chain. Aurora is excited about the future: about saving energy, increasing ef- Mr Tuan is pleased with the project
³,IRFXVRQHQHUJ\HI¿FLHQF\DQG “So far we’ve mainly focused on en- ¿FLHQF\DQGFUHDWLQJRSSRUWXQLWLHV´ and what it means for his company:
UHQHZDEOHV:KHQZH¿UVWEHJDQ HUJ\HI¿FLHQF\EXWLQWKHIXWXUHZH¶OO says Dang Van Tuan, Vice General “By making many small changes over
ZRUNLQJZLWKVXSSOLHUVLWZDVGLI¿FXOW explore the use of better materials, Director of Nafoco. time, we have reduced our energy use
WRFRQYLQFHWKHPRIWKHEHQH¿WVRI eliminating all waste, and producing IKEA energy-saving experts have and our costs.”
analysing their energy consumption. renewable energy. There’s so much worked with Mr Tuan and his team
They often saw sustainability as a potential. I’m so proud to be working WR¿QGZD\VWRLPSURYHRSHUDWLRQV
cost, not an opportunity to save,” with these companies because they without having to invest in costly new
she says. are our closest partners.” machinery and processes.

6 6 R ESOURC E AND ENERG Y INDEPENDENC E ,PSURYLQJZDWHUHI¿FLHQF\
and quality On average, suppliers
We collaborate with suppliers to improve can reduce water use by
ZDWHUHI¿FLHQF\DQGTXDOLW\MXVWDVZHGR between 10% and 20%.
on energy projects.
We have strengthened our water ex-
pertise globally and formed a network of Focusing on reducing water use alone can
water sustainability developers represent- be challenging because its price is gener-
ing the areas we source products from. ally very low in comparison to energy, but
They meet annually to share best prac- VWLOOUHTXLUHVVLJQL¿FDQWFDSLWDOFRVWV
tices and to develop our approach to water In FY14, total water use by tier 1 home
stewardship throughout our supply chain. furnishing suppliers decreased by nearly
The group has issued updated guidelines D WKLUG DQG ZDWHU HI¿FLHQF\ LPSURYHG E\
IRUHIÀXHQWWUHDWPHQWSODQWVDQGZLOOGH- 33% compared to FY12. We were able to
velop training for IWAY auditors and other report a bigger improvement than in FY13
Greening the supply relevant teams across IKEA to ensure the due to improved data quality, and because
chain for textiles in India new guidelines are being followed. of increased awareness of water risk
Their work is especially important in and better water management practices
For some companies in Southern the results: “Our processing factory is Bangladesh, China, India and Pakistan and among suppliers.
India, the only way to get enough in an area of water and energy scar- other areas where water is scarce but sup- Our ‘Water Guidelines for Textile
water to your factory is by a 50 km city, which was a nightmare for us.
truck drive. And sometimes outdated With support from IKEA, we saw the
plier water use is high. Suppliers’ provide a detailed framework
machinery and a polluted water supply difference the project was making and In many cases, our supplier projects for suppliers who wish to improve their
make production even less energy and we were motivated to look for more combine energy and water management water impacts. We recently updated the
ZDWHUHI¿FLHQW opportunities. With the commitment of
because this is often a more effective way guidelines in all the locations where we
Inspired by IKEA’s People & our employees, so far we have saved
Planet Positive strategy, Jansons over 285 MWh of energy, and 69 mil- WRLPSURYHHI¿FLHQF\DQGZDWHULPSDFWV source textiles.
- an IKEA textiles supplier based in lion litres of water.” In FY14, we held a sustainability event
Erode, southern India – set out to Further down the supply chain, we for the top 20 suppliers in South Asia and
remedy this. are also working with cotton farmers
After a detailed energy and water WRVDYHUHVRXUFHVDQGLPSURYHHI¿- local experts to discuss water manage-
audit and discussions with employees ciency. Together with WWF, we provide
±IURPIDFWRU\ÀRRUWRVHQLRUPDQDJH- training, economic and social aware-
ment – the project, in partnership with ness campaigns for farmers and their
the Institute of Industrial Productivity families. Read more on page 30.
(IIP) and National Productivity Council The project with Jansons has TIER 1 HOME FURNISHING (HF) FY12 FY13 FY14
(NPC), began. More than 15 measures demonstrated the huge potential for SUPPLIER WATER USE
were put in place, including a system further improving the textile industry.
to recycle wastewater for printing, a Potential savings of more than USD Total water use (m3) 34,340,809 35,548,668 24,507,975
new dyeing process which uses less 300 million (EUR 241 million) in en-
:DWHUHI¿FLHQF\OLWUHVP3) 1,346 1,367 908
water, and a way to save energy by ergy, water and resource costs could
making sure that motors are only run- EHDFKLHYHGRYHUWKHQH[W¿YH\HDUVLI ,PSURYHPHQWLQZDWHUHI¿FLHQF\ - -1.5 33
ning when they are needed. such initiatives are replicated by other compared to FY12 (%)
Mr Thirukumar, Managing Director South Asian suppliers.
of Jansons Industries, is pleased with

6 7 R ESOURC E AND ENERG Y INDEPENDENC E million visits to the online version of the Performance in FY14
catalogue. We produced the printed version of the
ment trends and strategies, and share Working with the IKEA Twice a year, all suppliers conduct a 2015 catalogue using only FSC Mix Cred-
ideas on how to engage in water projects catalogue suppliers self-assessment of their compliance against LW FHUWL¿HG SDSHU IRU WKH ¿UVW WLPH VHH
involving external stakeholders and the The IKEA catalogue is where we show ,:$< DQG WKH LQGXVWU\VSHFL¿F UHTXLUH- page 68), making our catalogue the big-
community. Following the event, all sup- customers our products and provide home ments for pulp, paper, print and digital. JHVW )6& FHUWL¿HG SULQW SURGXFWLRQ LQ
pliers have been more engaged in water furnishing ideas and inspiration. It is avail- This information is used by our pur- the world. The switch to 100% FSC Mix
HI¿FLHQF\SURMHFWVZLWKWZRHDJHUWRWDNH able in paper and digital format, and we chasers to select suppliers. We collect en- &UHGLW FHUWL¿HG SDSHU PHDQW WKDW ZH
part in community projects concentrating are exploring ways to make both as sus- vironmental data from our pulp, paper and GLGQRWXVHDQ\UHF\FOHG¿EUHLQWKH
RQZDWHU2XUZDWHUHI¿FLHQF\LQLWLDWLYHVLQ tainable as possible. In FY14 we printed SULQW VXSSOLHUV ZKLFK LV YHUL¿HG E\ WKLUG catalogue.
the region, taken together, have resulted 217 million copies of the IKEA catalogue party auditors. Total carbon emissions and carbon
in annual savings of 714 million litres. in 32 languages, using 37 paper and print emissions per printed copy increased by
See page 35 for more about our aim to suppliers. The catalogue is also available Read more about how IKEA catalogue 85.4% and 76.7% respectively, compared
be water positive by 2020. digitally and in FY14 we received 43 million suppliers are meeting our IWAY require- with FY11. Water use increased by 17.8%
visits to the IKEA catalogue app and 53 ments on page 85. FRPSDUHGWR)<7KHVLJQL¿FDQWLQFUHDVH
in reported carbon emissions and water
Passion enables use between FY14 and FY13 is largely due
water savings in Asia to improvements to our data collection
methodology.
IKEA co-worker Sandesh Waje is discuss water. Total energy use increased by 6%
really passionate about water. “It’s all about team work. An in- compared to FY11 because we printed
“I love everything about water – ÀH[LEOHVW\OHGRHVQ¶WJHWUHVXOWV±ZH more copies of the catalogue, but energy
I enjoy water sports, drink a lot of can only make changes if we work
water, and everyone thinks that I was together.” HI¿FLHQF\ UHPDLQHG VWDEOH ZLWK D YHU\
born to work with water!” Recently, Sandesh has seen at- small decrease in energy used per copy.
Just as well, because Sandesh titudes change. “Many suppliers now Our target was to reduce energy use by
works with around 60 suppliers in appreciate the risks and real impacts of
10% and carbon emissions by 20% for
Bangladesh, India and Pakistan to help ZDWHUVFDUFLW\DQGQRWMXVWWKH¿QDQ-
them work out how to use as little wa- cial ones,” he says, referring to legal FY15, compared with FY11.
ter as possible. Almost 70% of IKEA’s obligations, rising costs and the very Our improved data collection meth-
home furnishing textiles come from real threat of having no water at all.
odologies include third party audits to
this region. “Even if our suppliers are us-
Water shortages are a big worry LQJZDWHUHI¿FLHQWO\LQWKHLURSHUD- check the accuracy of data provided by
in the area, and Sandesh’s job is not tions, effective change is not possible our suppliers, updated emissions factors
always easy. “The cost of water is low, without industry-wide collaboration, used to calculate emissions arising from
VRWKHUHLVOLWWOH¿QDQFLDOUHDVRQWR co-operation and consensus. So we’ve
save it. This is why we encourage our started encouraging them to work
production and transport from forest to
suppliers to think about water for its on water stewardship with nearby paper mill, and calculation methodolo-
value, not its price.” factories, and in their communities gies recommended in the Global Report-
Sandesh works with suppliers DQGYLOODJHV:HDUHFRQ¿GHQW,.($
ing Initiative’s G4 guidelines. This means
ranging in size from 200 to 10,000 suppliers can lead the way in water
employees. He visits sites, holds regu- management, and they have a great that FY14 data is a more accurate re-
lar workshops and runs an annual sup- RSSRUWXQLW\WRLQÀXHQFHDQGFUHDWH ÀHFWLRQ RI WKH LPSDFWV RI WKH FDWDORJXH
plier sustainability day in South Asia to wider positive change.” We decided to use a higher quality of

6 8 R ESOURC E AND ENERG Y INDEPENDENC E paper and this also contributed to the
negative trend in carbon emissions
since FY11.
Improving the accuracy of data has
also shown that emissions to water from
our pulp, paper and print suppliers in
FY14 was less than half what we reported
in FY13.
The proportion of renewable energy
used for the pulp and paper and print pro-
duction of our catalogue was lower than
in FY13 because we decided to prioritise
O U R F I R S T F U L LY F S C
C ERT IF IED IK E A C ATALOGUE reaching our 100% FSC target. We started
ZRUNLQJZLWKPRUH)6&FHUWL¿HGVXSSOLHUV
The IKEA catalogue is now the to enable us to reach our target, but not
largest print production ever to be all of them focus as strongly on renewable
printed on 100% Forest Steward-
energy as the FY13 group of suppliers.
VKLS&RXQFLOFHUWL¿HGSDSHU)6&
Mix Credit) and to carry the FSC Since introducing third party audits of
logo. This means the entire IKEA suppliers’ environmental data, we have a
catalogue production chain, from more accurate picture of our sustainabil-
IRUHVWWRSULQWHULV)6&FHUWL¿HGWR
ensure more sustainable origins of ity performance related to producing our
printed catalogue. It is not possible to re-
A more sustainable the wood.
Our goal was to reach entirely state our historical data, but we plan to set
catalogue? )6&FHUWL¿HGSDSHUE\$
a new baseline and targets for FY16-18.
thorough selection process helped
us to identify the paper and print
suppliers that perform best in this
The IKEA catalogue is an impor- consider. Many of the activities es-
category, and this made it possible
tant part of the way our customers sential to making our app and website
to reach the goal a year ahead of
experience IKEA. Whether customers accessible use a lot of energy, which
our original schedule.
access the paper or digital versions of is rarely from renewable sources. In
To secure the effective and
our catalogue, we ensure that it is as comparison, we know that in FY14,
long-term management of forests
sustainable as possible. 44% of the energy used for the pulp
SURYLGLQJ¿EUHIRUWKHFDWDORJXHLQ-
We have made good progress with and paper and print production of our
dependent auditors assess the pulp,
understanding the sustainability per- catalogue was renewable.
paper and print suppliers annually.
formance of the printed catalogue and And while the printed version of
They must document the origin of
this has helped us to identify how we the catalogue is 100% recyclable, the
WKHZRRG¿EUHVWKH\XVHVRWKDWLW
can improve. We want to achieve the devices used to access our catalogue
is traceable all the way back to the
same level of understanding about the GLJLWDOO\FDQEHGLI¿FXOWWRUHF\FOH
forests it came from. See page 26
production and delivery of the digital We are mapping our digital supply
for more about how we work with
YHUVLRQ7KH¿UVWVWHSLVWRPHDVXUH chain so that we can start gather-
the FSC and how we are integrating
the impacts associated with the digital ing and reporting environmental data
paper into our responsible sourcing
catalogue. from our digital suppliers in FY15.
strategy.
There are several aspects to

ENVIRONMENTAL DATA, FY10 FY11 FY12 FY13 FY14

TOTAL FOR PRINT
PRODUCTION OF CATALOGUE
Printed number of catalogues 197 208 212 211 217

(millions)
,62FHUWL¿HGSDSHU 89 100 94 100 100

suppliers (%)
Catalogue paper (tonnes) 102,476 108,450 107,373 107,083 102,077
)6&FHUWL¿HG&KDLQRI&XVWRG\ 21 30 23 68 100
¿EUHRIYLUJLQ¿EUHFRQWHQW
5HF\FOHG¿EUHFRQWHQW 11 4 2 2.3 0
Share of renewable energy (%) 50 48 42 51 44
Total carbon emissions from 95,905 88,916 90,744 92,308 164,843 *

production of catalogue
(tonnes CO2)
Total energy used from 584 569 570 587 603

catalogue suppliers (MWh)
Total water use from catalogue 2,815,209 2,832,017 2,833,300 2,870,188 3,379,956 *
suppliers (m3)
ENVIRONMENTAL DATA PER FY10 FY11 FY12 FY13 FY14

PRINTED CATALOGUE COPY
Water consumption (litres/copy) 14.26 13.55 13.39 13.62 15.6
Energy consumption (kWh/copy) 2.96 2.72 2.69 2.79 2.78
Total carbon emissions from 0.49 0.43 0.43 0.44 0.76

production and transport
from forest to paper mill
(kg CO2/copy)
Emissions to air (g Volatile 1.12 1.15 1.12 1.01 1.05

Organic Compound /copy)
Emissions to wastewater 3.49 3.47 4.29 3.94 1.92

(gr Chemical Oxygen
Demand /copy)
7KHVLJQL¿FDQWLQFUHDVHLQUHSRUWHGFDUERQHPLVVLRQVDQGZDWHUXVHLVODUJHO\GXHWRLPSURYHPHQWVWRRXUGDWDFROOHFWLRQPHWKRGRORJ\

0 0
7
A better life for people

and communities
Our vision is to create a better everyday life
for the many people. With 147,000 co-workers,
and millions of people in our extended value
chain we have an opportunity to make a big
difference. We support positive economic, social
and environmental development, promote equality
and place respect for people and their rights at the
centre of what we do.
We want IKEA to be a great place to work and
our efforts to involve, reward and develop our co-
ZRUNHUVUHÀHFWWKLV,WLVLPSRUWDQWWRWUHDWHDFK
other with respect and dignity, and that we can
all enjoy a safe working environment and a good
quality of life at work and home.
We have continued to extend the reach of our
supplier Code of Conduct, IWAY, and to raise the
bar on what we expect from our suppliers and
RXUVHOYHV:HHVSHFLDOO\IRFXVRQ¿QGLQJZD\V
to empower people in our extended supply chain
whose voices often go unheard such as home
workers or migrant workers.
> A bet ter ever yday life at work > Bet ter lives for worker s > Suppor ting human right s > L asting changes for communities

7 1 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES
CO-WORKERS
147,000
IKEA GROUP CO-WORKERS
RESPONSIBLE FOR THE PEOPLE &
PLANET POSITIVE STRATEGY
SUPPLIERS
OPERATIONS IN
47%
42
OF MANAGERS
ARE WOMEN
COMMUNITIES
ENABLING COUNTRIES
110,000 MORE THAN
100 million
COTTON FARMERS TO IMPROVE
THEIR INCOMES
CHILDREN WILL BENEFIT

Ma
100%
FROM CURRENT IKEA
ny
FOUNDATION-FUNDED
PROGRAMMES
sm
al
OF HOME FURNISHING SUPPLIERS
.
es
lc
APPROVED TO OUR IWAY CODE OF
li v
ng
ha
CONDUCT, BEING PHASED OUT OR es ’s

le
PENDING A SCHEDULED AUDIT ad op
d
up pe
o
to dt
ma an
ke a et
b i g di f p lan
fer ence for the
€10.1 million
RAISED THROUGH THE
SOFT TOYS FOR EDUCATION
CAMPAIGN IN 2013

Working with others to The workshop covered key issues of in-

improve our strategy terest to stakeholders, such as fair wages,
In November 2013, we invited representa- migrant workers and creating sustainable
tives of the Institute for Human Rights and communities. We explored opportunities
Business, Oxfam, the United Nations Chil- for IKEA to lead in creating a better life
dren’s Fund (UNICEF), and the Centre for for people and communities, and shared
Child-Rights & Corporate Social Respon- ideas for innovative products and services.
sibility to join us for an open discussion The outputs of the workshop fed directly
about how retail businesses can have a into our updated People & Planet Positive
positive social impact. strategy – see page 100.
E Q U I TA B L E WA G E S
A C R O S S O U R O P E R AT I O N S
We have been working on a con- cost was more than the legal minimum
sistent structure for basic terms and and that we needed to do more to sup-
conditions of employment. Part of this port our co-workers. For example, in
entails understanding what a fair wage the USA, we are raising our standard
is. Together with the Fair Wage Network minimum wage by 17% – a change that
(www.fair-wage.com), we investigated ZLOOEHQH¿WKDOIRIRXU86$FRZRUNHUV
the existing salary structure in three This increase is based on the MIT Liv-
countries: China, Japan and the USA. ing Wage Calculator, which takes into
The Fair Wage Network uses a con- consideration housing, food, medical
sistent approach, which we can apply to and transportation costs plus annual
many countries. It includes a focus on taxes*. In Japan, we have decided to
wages, along with other critical factors have the same equivalent salary level
VXFKDVZRUNLQJKRXUVVRFLDOEHQH¿WV (equivalent pay for the same work and
equity, costs to workers and the oppor- the same number of hours) for full-time
tunity for progression. The approach is and part-time co-workers, even though
inclusive, drawing on input from work- it is normal practice in Japan for a part-
ers, managers and external sources. time employee to receive a much lower
Our work in FY14 included looking salary than a full-time employee.
at the minimum level we are paying in In FY15, we will begin pilot projects
relation to the local living cost – how with the Fair Wage Network approach
much a person needs for basic food, at home furnishing suppliers in se-
clothes and housing, as well as essen- lected countries. The pilots will give us
tials such as education and insurance. insights into supplier practices in the
We pay at least the legal minimum in sector and help us understand how we
all countries, but in some countries our can extend the approach across our
investigations showed the local living supply chain.
*
The rate used is a single person with no children. Based on the MIT Living Wage calculator
(http://livingwage.mit.edu). Rate applies no matter how many hours per week a co-worker works.

P E O P L E S T R AT E G Y 2 0 2 0 P E R F O R M A N C E i n F Y 14
& O T H E R TA R G E T S
A better everyday Ensure every co-worker has an agreed, In FY14, 71%* of co-workers had an
life at work individual development plan agreed, individual development plan.

*
Of the 87,644 co-workers who completed the VOICE
survey and answered positively to: “Have you within
the past twelve months together with your manager
agreed on a development plan for the coming year?”
This question is new and not comparable with
previous years.
By 2020 50% of managers will be women At the end of FY14, 47% of managers were
women.
By 2020 achieve a Leadership Index result In FY14, we achieved a Leadership Index

of 75 in our VOICE survey result of 73. See page 77 for more about
our VOICE survey.
By FY20 achieve an index of 725 in our In FY14, we achieved a VOICE index result
VOICE survey of 704.

)ROORZLQJWKH,.($*URXS'LYHUVLW\DQG,QFOXVLRQ$SSURDFKHYHU\,.($XQLWKDVGH¿QHG
actions to ensure a diverse co-worker population. Our goal is to reach gender balance in
NH\OHDGHUVKLSSRVLWLRQVDQGWRUHÀHFWWKHGLYHUVHQDWLRQDOLWLHVRIRXUPDUNHW
We enable and encourage co-workers to participate in community involvement activities

in their local area.
ure includes co-workers on permanent

and temporary contracts, but excludes C O - W O R K E R S P E R R E G I O N F Y 14
seasonal co-workers.
Turnover among full-time co-work-
Every co-worker is a valuable talent. ture and values outlined in our Code of ers increased slightly. There was a more
We are committed to providing a stimu- Conduct, ‘Good Business with Common VLJQL¿FDQW LQFUHDVH LQ WXUQRYHU DPRQJ
lating, inclusive and diverse workplace Sense’ and describes how we can create a part-time co-workers, which increased to
where people are appreciated and have better everyday life for ourselves and our 29.9%, from 15.4% in FY13. This was due
the chance to grow. customers. to a larger share of co-workers on tempo- Europe 102,000
Our People Strategy outlines the re- In FY14, the total number of co-work- rary contracts due to economic uncertain- North America 19,000
lationships we want to build with our co- ers at the IKEA Group increased by 12,000 ties in some countries. People on tempo- Asia and Australia 14,000
workers and others. It builds on the cul- WRDWRWDORIFRZRUNHUV7KLV¿J- rary contracts usually work part-time and Russia 12,000

stay for less than a year, which contributes and retain co-workers. During FY14 we
to an increase in turnover among part-time launched our new loyalty programme for
co-workers. Approximately 85% of our all co-workers, Tack! (see right) and we
co-workers are on permanent contracts expanded the One IKEA Bonus programme
UHÀHFWLQJRXUDPELWLRQWRIRUPORQJWHUP to include all IKEA Group co-workers with
relationships with our co-workers and to the exception of IKEA Industry co-work-
invest in their personal and professional ers, who will be included by FY16.
development. Turnover among perma- One IKEA Bonus is a performance-
nent co-workers was stable between FY13 driven bonus system connected to individ-
and FY14. ual salary level and paid out annually upon
the completion of set goals. It is based on
Values and culture simplicity and togetherness, with every-
IKEA is made up of a global team of people one in the same unit working towards the
who share the same values. We are com- same objectives. Our new global One IKEA
mitted to being a caring, responsible, hon- Bonus applies to all co-workers who have
est and trustworthy company, and expect been with us for at least six months1 and
RXUFRZRUNHUVWRUHÀHFWWKLV5HDGPRUH replaces all existing bonus and incentive
about our approach to ethics on page 102. programmes.2
We believe in rewarding good work,
and offer a competitive compensation
DQG EHQH¿WV SDFNDJH WKDW KHOSV DWWUDFW
Tack!
CO-WORKER TURNOVER (%) FY10 FY11 FY12 FY13 FY14 In December 2013, we launched Part-time co-workers will receive a
a new loyalty programme for all of proportional amount in relation to
Part-time 20.5 22.3 18.0 15.4 29.9 our co-workers. It was built on our hours worked.
Full-time 10.6 11.5 10.7 11.5 12.2 founder Ingvar Kamprad’s wish to The fund is divided between our
say thank you to co-workers for their countries of operation based on each
All 14.8 16.1 16.1 12.8 19.7 contribution and loyalty to IKEA, and country’s proportion of salary and
so we decided to call it Tack! – ‘thank wages.
you’ in Swedish. We think this is a simple, fair way of
GENDER DIVERSITY FY10 FY11 FY12 FY13 FY14 FY20
Tack! supports retired co-workers saying Tack! to all of our co-workers
(% of women)* GOAL
as an additional contribution to their for their hard work and commit-
All co-workers 52 55 52 54 54 - pension plans. It applies to all co-work- ment. It goes hand in hand with our
HUVZKRKDYHEHHQZLWK,.($IRU¿YH performance-driven One IKEA Bonus
All managers 39 40 47 47 47 50
years or more. Most importantly, all Programme to create a great place to
full-time co-workers within a country work, today and in the future.
*
Data representing 83% of IKEA headcount. will receive the same amount regard-
less of unit, position or salary level.
6L[PRQWKVGXULQJDVLQJOH¿VFDO\HDUZLWKQRLQWHUUXSWLRQV'RHVQRW\HWDSSO\WR,.($,QGXVWU\
1
8QOHVVORFDOOHJLVODWLRQRUDJUHHPHQWVZLWKXQLRQVRUZRUNVFRXQFLOVUHTXLUHDVSHFL¿FORFDOERQXVSURJUDPPH
2

7 5 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES Diversity and inclusion
We recognise and celebrate the value in di-
versity – of people, ideas and knowledge.
We launched the new global IKEA Diver-
sity and Inclusion Approach in FY13, which
aims to create an inclusive work environ-
ment where co-workers are recognised for
their unique contributions. The approach
applies to all of our full-time (58%) and
part-time (42%) co-workers. It covers di-
versity in all its dimensions, from gender,
ethnicity, sexual orientation and identity,
physical ability and age to nationality, edu-
cational background, parental status and
work experience. Using this approach,
each IKEA unit has responsibility for set-
ting its own diversity goals and targets.
The IKEA Women’s Open Network
(IWON) was launched during FY13 as one
tool to support our goal of gender equality.
© Magnus Glans
IWON aims to inspire, connect, empower

and enable women in leadership positions
at IKEA, as well as contribute to a more
inclusive work climate and better gender
balance. Since its launch, IWON has held
IKEA Houston – the one global meeting in FY13, followed by
four regional meetings in China, Germany,
same, but different! Portugal and the USA in FY14. By taking
IWON into our regions, we hope that more
“Okay, I look different, but that’s a co-workers with the city’s demographics. cities in the USA. English is just one of
tribute to you and IKEA USA. Because One noticeable difference, for example, the many languages spoken, as well as co-workers will spread the messages of in-
I know that here it doesn’t matter was the relative lack of co-workers over Arabic, Chinese, Farsi, French, German, clusivity and be empowered to take initia-
what I look like, what race or religion 55 – most were under 24. Gujarati, Hindi, Spanish, Swahili, Portu-
I belong to.” “We started by asking our older guese, Punjabi, Serbo-Croat and Urdu. tives that lead to gender balance.
That’s what Nabeela Ixtabalan, co-workers what they looked for in an But it doesn’t stop there. Nabeela
wearing her hijab, told us during her employer,” Nabeela says. “We wanted to says there is more work to do. “We want
MRELQWHUYLHZDW,.($+RXVWRQ¿YH learn how to attract older workers so we more female co-workers in the self-serve
years ago. could adapt our recruitment campaigns furniture area. Previously this has been In FY14, the share of
Nabeela got the job. As Store Manag- accordingly.” the domain of men with muscles. And we
er at IKEA Houston, she was determined Today, IKEA Houston co-workers need more women in Receiving Goods. If all co-workers who are
to let her colleagues know that everyone are about as diverse as it gets – a true ZRPHQFDQÀ\)VLQWKH86$LU)RUFH women was 54%.
is accepted at IKEA for who they are. UHÀHFWLRQRIWKHORFDOFRPPXQLW\RI I’m sure they can drive forklifts in the
She started by comparing the mix of Houston, one of the most multi-cultural warehouse.”

7 6 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES Health and safety All management teams within IKEA Indus-
We take the health, safety and well-being try have safety performance plans, and
The share of managers who are women vance their IKEA career. of our co-workers, customers and visi- have been trained in ‘leading safety’. It fo-
ZDV7KHVH¿JXUHVDUHWKHVDPHDV In FY14, 71%* of our co-workers had tors very seriously. Our health and safety cuses on the importance of commitment
for FY13. We have integrated diversity into an individual development plan, which in- standard, launched in FY13, states our and leading by example.
our recruitment and talent approach to cludes regular meetings with their man- commitment that all co-workers shall ex- In FY14, occupational accidents at
ensure we reach gender balance by 2020. agers to review their career aspirations. perience a healthy and safe workplace at IKEA Industry Group increased by 4.5%
In 2013 we participated in the Battle of 7KLV ¿JXUH LV QRW FRPSDUDEOH ZLWK SUHYL- all times. to 1,739, from 1,664 in FY13. This is due to
the Numbers project, partnering with nine ous years as it is based on the answer to a We take a preventative approach to the growth of IKEA Industry, and increase
major Swedish companies to achieve bet- different question in the annual VOICE health and safety issues, combining for- in the number of hours worked, which
ter gender balance at senior levels. As a VXUYH\DQG)<ZDVWKH¿UVW\HDUWKDWDOO mal structures and everyday actions with rose by 5.6% compared to FY13. The oc-
result of taking part in the project , our of IKEA Industry participated. a strong focus on training and awareness. cupational accident rate at IKEA Industry
President and CEO Peter Agnefjäll high- This approach has contributed to a Group per million hours worked was 4.57
lighted next steps for IKEA such as car- decrease in the number of occupational in FY14 compared with 6.27 in FY13.
rying forward work with IWON, working We encourage our co-workers to test accidents at our stores – from 1,398 in There were no fatalities among IKEA
more actively with diversity ambassa- new ideas and challenge the norm, FY13 to 1,287 in FY14 – even though IKEA Group co-workers or contractors working
dors and role models, and ensuring di- and this produces some of our best is growing. on our behalf during FY14.
versity and inclusion are integrated into and most innovative ideas. IKEA Industry has a strong focus on
all leadership development programmes. co-operation, learning and support be-
In FY14 we formed a working group tween all units. This includes cross-unit
on lesbian, gay, bisexual and transgender The IKEA Group Talent Approach was health and safety networks that share
(LGBT) rights at IKEA. As a result, we have introduced in FY14 starting with IKEA good practice and accident preventions.
decided to recruit a project leader during managers and with plans to roll out to
FY15 who will work to ensure that our all co-workers in FY15. We offer a range
LGBT co-worker community feel respect- of on-the-job training and courses, and
ed, valued and appreciated for who they HOHDUQLQJ FRXUVHV UHOHYDQW WR VSHFL¿F IKEA GROUP OCCUPATIONAL ACCIDENTS (number FY13 FY14
are. The project leader will work with a functions. of accidents requiring 3 days or more absenteeism)
team to analyse the situation in all parts of We want our co-workers to be inspired
Stores 1,398 1
1,287
the world and to suggest ways of working by our sustainability efforts and to be well
that communicate support and inclusion. trained to contribute to making IKEA more Supply 143 2
146
sustainable. In FY14, we rolled out a new IKEA Industry Group 3

1,664 1,739
Learning and development sustainability training package, tailored to 1
)LJXUHUHVWDWHGIURP)<DV¿JXUHVUHSRUWHGZHUHSUHOLPLQDU\
We offer a wide range of learning and ca- suit individual roles and divided into bite- 2
)LJXUHUHVWDWHGIURP)<DV¿JXUHVUHSRUWHGZHUHSUHOLPLQDU\
3
Accidents requiring one day or more absenteeism
reer development opportunities to enable sized modules. This included a range of
everyone to reach their potential. We want different delivery methods, including small
IKEA INDUSTRY GROUP OCCUPATIONAL ACCIDENT FY13 FY14
to lead the way in training, enabling our lectures, group discussions, guided tours RATE (accidents requiring one day or more
co-workers to develop new skills and ad- DQG¿OPV absenteeism per million hours worked)
*
Of the 87,644 co-workers who completed the VOICE survey and answered positively to: “Have you within the past IKEA Industry Group 6.27 4.57
twelve months together with your manager agreed on a development plan for the coming year?” This question is
new and not comparable with previous years.

7 7 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES Communicating with
co-workers
Open dialogue improves understanding of
what motivates and inspires people and
lets them know what is expected of them.
Good communication enables

us to face in the same direction,
with shared goals and values.
Our managers are responsible for keeping

their teams up to date, ensuring they have
the right information to do their jobs. We
provide communications training and tools
to support this process, and expect man-
Listening to our agers to make good communication with
co-workers co-workers a priority.
Our intranet site, IKEA Inside, is acces-
VOICE is our online survey for all the survey. The survey showed that 79% The results of the VOICE survey feed sible to two-thirds of all co-workers, and
co-workers in the IKEA Group. It ena- of co-workers agree with the statement, into an overall VOICE index and lead- includes a new blog that enables co-work-
bles us to better understand co-worker “within my department sustainability is a ership index. These help us to gauge
ers to follow our President and CEO Peter
views, assess how engaged they feel with natural part in the everyday work” (FY13: overall progress and identify ways to im-
their work, and identify areas where we 70%), 83% agree with the statement, prove our business. In FY14, our overall Agnefjäll. We also have an extranet which
can do better. VOICE is conducted by “I am proud of the way that IKEA works VOICE index was 704 (711 in FY13), This co-workers can access from home, avail-
an independent organisation to ensure with sustainability” (FY13: 82%), and included results of 718 for Retail, 740 able in 21 countries. We use these chan-
FRQ¿GHQWLDOLW\(DFKSDUWRIWKHEXVL- 80% agree with the statement “I feel for Range & Supply, and 618 for Indus-
ness participates at least once every two responsible for minimising the negative WU\±LQFOXGHGWKLV\HDUIRUWKH¿UVWWLPH nels to keep our co-workers informed and
\HDUV)<ZDVWKH¿UVW\HDUWKDWDOORI impact on the environment in my daily A result of 700 or more for the overall engaged, along with internal magazines,
IKEA Industry participated in the survey, job” (FY13: 78%). The results of VOICE 92,&(LQGH[LVFODVVL¿HGDVH[FHOOHQWE\ meetings, video screens, closed-circuit ra-
which followed the merger of Swedwood, are not directly comparable between the company that conducts the survey,
Swedspan and IKEA Industry Investment years as different parts of IKEA and and suggests the organisation is “well
dio and notice boards.
and Development (IIID). different numbers of people participate, equipped to generate business value”. Our quarterly internal magazine, Re-
In FY14, more than 87,000 out of a to- and in FY14 we also updated the VOICE Our VOICE leadership index in FY14 was adme, discusses company and prod-
tal of 147,000 co-workers participated in questions. 73 (74 in FY13).
uct news from a co-worker perspective.
Translated into 20 languages, we print
60,000 copies for worldwide distribution,
VOICE RESULTS FY10 FY11 FY12 FY13 FY14 GOAL
and make it available on IKEA Inside. To
VOICE index 659 716 712 711 704 725 by FY20 complement the magazine, we produce
Leadership index result 73 74 74 74 73 75 by FY15
VKRUW¿OPVZLWKDGGLWLRQDOFRQWHQWDQGDQ-
gles on Readme stories.

We respect the rights of co-workers to ENTRE TODOS

Querem os un m ejor día a día para ti y para los tuyos
join, form or not to join a co-worker as-
sociation of their choice without fear of
reprisal, interference, intimidation or har-
assment. Dialogue between co-workers
and their managers is the most important
element for creating an open culture and
there are different forums in place in the
countries where we work to further facili-
tate this dialogue.
We actively communicate all develop-
ments in IKEA affecting co-workers, pro-
viding clear information about the impli-
cations and establishing opportunities for
dialogue. In FY14, following the merger of
Swedwood, Swedspan and IKEA Industry
Investment and Development (IIID) into
IKEA Industry Group, we invited co-work-
ers worldwide to ask questions about the
merger, or share concerns with managers.
During the year, we also created a separate
magazine for IKEA Industry – ReadmeTOO
– which is distributed to all IKEA Industry
co-workers, in addition to Readme.
Co-workers can use our trust line to Spanish co-workers supporting
report any concerns they feel unable to each other in hard times
raise through their manager or human
resources – see page 102.
Life in Spain can be hard because of the your colleagues and their families, using online space for co-workers to advertise
Our co-workers are often at the fore- struggling economy. Many families are IKEA power?” their second-hand products they no
front of our efforts to create a better life feeling the pressures of unemployment ‘Together’ means just that – work- longer need, and request others they
for people and communities – read more and poverty. ing together with colleagues to create a ZRXOGOLNH$QG¿QDQFLDODLG±JUDQWV
Co-workers at IKEA Spain decided to better everyday life for themselves and that do not need to be repaid – that
on page 95. We encourage co-workers
do something positive to help. They call their relatives, through small actions FRZRUNHUVFDQDSSO\IRULQFRQ¿GHQFH
to participate in community engagement it the Together project. Elena López, and creative solutions, and always in There have been more than 80 applica-
activities in their local area. &RPSHQVDWLRQ %HQH¿WV0DQDJHUDW the IKEA spirit. WLRQVIRU¿QDQFLDODLGZLWKPRUHWKDQ
IKEA Spain, explains: “We decided to All functions were asked to think 40 co-workers receiving this so far.
Read more about how we engage
create a ‘favours chain’. It’s about about how they could help IKEA
FRZRUNHUV RQ WKH VXVWDLQDELOLW\ EHQH¿WV asking – what can you do to support co-workers. The ideas include a free
of our products on page 21.

Better lives Maintain the social and environmental 100% of home furnishing and transpor-
for workers improvements reached through the 100%

IWAY approval of all suppliers of home
tation suppliers IWAY approved, being
phased out or pending a scheduled audit
furnishing and other key products and (applies to 0.5% of the total).
services.* 98% of global food suppliers and 99.2%
of IKEA Components suppliers IWAY
*
Suppliers related to Home Furnishing, IKEA
Components, Transportation and Global Food. approved.
By August 2015, expand the reach of our 77% of Indirect Material and Services sup-
supplier Code of Conduct by securing IWAY pliers and 40% of retail suppliers are IWAY
approval at all local IKEA Food, Indirect approved. 29% of local food suppliers are
Material and Services and retail suppliers IWAY approved, which means we are not
within the scope of IWAY.* on track to meet the 2015 target, but we
are working hard to address the challenge.
*
For the retail operations, the current IWAY focus is
on cleaning, home delivery, security and waste
management suppliers.
By August 2017, go further into our supply In FY14, 91% of critical home furnishing
chain by securing compliance to IWAY sub-suppliers were approved as complying
Musts* at all sub- suppliers of critical with IWAY Musts. This is based on audits
materials and processes. of 1,085 of the 1,691 sub-suppliers we
KDYHLGHQWL¿HGDVµFULWLFDO¶
*
IWAY Musts are the immediate requirements that IKEA
suppliers must meet before a contract can be signed.
How IWAY supports better SO\FKDLQEH\RQGWKH¿UVWWLHU

lives for workers Since its launch in 2000, IWAY has
The IKEA Way on Purchasing Products, HYROYHG WR UHÀHFW RXU LQFUHDVLQJO\ DPEL-
Materials and Services – IWAY for short tious expectations of suppliers – most
– sets out our minimum requirements for recently with the new IWAY 5.1 standard.
environmental, social and working condi- For example, IWAY requires
tions. It is based on United Nations and suppliers to:
International Labour Organization con-
Over 600,000 people in more than 50 makes our expectations clear. Working ventions, legal requirements and IKEA’s • Meet strict requirements on labour
countries work for our home furnishing with suppliers to implement IWAY has RZQVSHFL¿FDWLRQV$OOQHZVXSSOLHUV rights, working conditions, safety and
suppliers.* Together with our suppliers, helped us develop strong, long-term part- in FY14) must comply with a core set of environmental protection, including
we are determined to contribute to bet- nerships. We have worked with 64% of our ‘IWAY Musts’ before we agree to work IWAY Musts on child and forced la-
ter lives for workers by supporting decent tier 1 home furnishing suppliers for over with them. IWAY applies to the whole fac- bour, preventing severe environmental
jobs for all. ¿YH\HDUV7KHDYHUDJHOHQJWKRIVXSSOLHU tory or site, not just the area supplying pollution and safety hazards, keeping
Our supplier Code of Conduct, IWAY, relationship is 11 years. IKEA. We have also expanded the scope records of working hours and wages,
to include suppliers further down our sup- and having social insurance
7KLVUHIHUVWRRXU¿UVWWLHUVXSSOLHUVZKRZRUNGLUHFWO\ZLWK,.($SURYLGLQJJRRGVDQGVHUYLFHVVSHFL¿HGE\XV
without an intermediary.

8 0 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES are piloting a project in partnership with core element of our work with suppliers.
one textile supplier to increase tailoring We run focused programmes to support
Our work does not stop once a supplier skills and motivation in the workforce. suppliers to reduce their water and energy
QUIC K GUIDE TO
I WAY T E R M S achieves IWAY approval. We keep working Preventing child labour and support- use and CO2 emissions (see page 62). Our
together to maintain compliance and we ing home and migrant workers are impor- dedicated IWAY Forestry Standard sets
look for opportunities to support further tant areas of focus. Read more about our out strict environmental and ethical stand-
IWAY: the IKEA Way on Purchas- economic, environmental and social devel- work with these groups on page 88. We ards, including guidance on legal logging
ing Products, Materials and Ser-
vices, which sets out our minimum
opment in our supply chain. For example, also support the social and economic de- and the protection of high value and pro-
requirements for environmental, in China our suppliers are now providing velopment of the communities in our wider tected forests (see page 28).
social and working conditions. social insurance to all workers. A big chal- supply chain through the IKEA Foundation
lenge in India is the limited availability of (see page 93). Read the full IWAY standard online.
IWAY Musts: an essential set of
requirements new suppliers have skilled and highly skilled workers, so we Environmental performance remains a
to meet before we sign a purchase
agreement.
IWAY60: an interim step towards

IWAY AUDIT DATA FY10 FY11 FY12 FY13 FY14
IWAY relating to working hours,
requiring a maximum of 60 hours Number of IWAY audits/of which are unannounced
per week, including overtime (only
applicable in China). Europe 365/29 341/144 348/198 337/55 485/87
Americas 29/1 26/12 31/15 31/5 53/8
Asia 645/501 626/55 607/517 549/434 617/501
Total 1,039/531 993/711 986/730 917/494 1155/596
• Ensure their workers do not work more
Number of IKEA Compliance and Monitoring Group calibration audits
than 60 hours per week (including
overtime) or comply with working hour Europe 21 24 19 19 7
limits, if that is lower; in China we are Americas 2 3 2 2 2
working towards IWAY approval on ad- Asia 32 25 29 19 22
herence with working hour limits (40 Total 55 52 50 40 31
hours per week, maximum 36 over- Number of third-party audits (unannounced)
time hours per month, maximum three
Europe 12 12 9 23 32
hours overtime per day) for suppliers
Americas 0 0 2 2 3
by the end of FY15
Asia 35 32 45 66 88
• Comply with local laws and regula-
tions, including those relating to work- Total 47 47 56 91 123
ing hours and pay Terminated businesses, number of suppliers

• Allow freedom of association for work- Due to IWAY non-compliance 10 8 47 26 18
ers (except in China and Vietnam Due to non-compliance and other reasons 17 11 25 10 3
where we are unable to fully apply this Number of third party child labour audits
requirement because of legal restric-
Total 365 370 365 416 305
tions in these countries).

8 1 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES • New or strengthened requirements ers into the IWAY scope, for example IKEA
on business ethics, freedom of asso- Industry suppliers (see page 86). On the
N U M B E R O F S U P P L I E R S B Y C AT E G O R Y ciation, grievance mechanisms, ergo- following pages we provide information
nomics and recruitment practices for about IWAY approval at different supplier
CATEGORY FY14
migrant workers types.
IKEA Industry 1150 • Meeting the legal minimum for wages,
Home furnishing 1002 1 which is now an IWAY Must. Home furnishing suppliers
IWAY has been at the heart of our rela-
IKEA Food (local suppliers) 481 2
This new standard is designed to support tionships with home furnishing suppliers
Total number of retail cleaning, security, waste management and 448 suppliers as they integrate IWAY into their for almost 15 years. As our expectations
customer delivery service providers
own routines and procedures through evolve, we provide training and support to
Indirect Material and Services 301 management systems and risk assess- enable our suppliers to meet new require-
IKEA Components 242 ments. ments and compliance.
We ran a programme of workshops, We require that our home furnishing
Transport service providers – land and ocean 233
seminars and presentations for co-work- suppliers are approved according to IWAY
IKEA Food (global suppliers) 121 ers in FY14 to make sure they are up to to supply IKEA and at the end of FY14, all
Transport service providers – customer delivery 63 speed with the latest IWAY requirements – home furnishing suppliers were IWAY ap-
helping them communicate with suppliers proved, were being phased out or were
IKEA Catalogue 37
and assist with the integration of IWAY as pending a scheduled audit (applies to
1
1002 suppliers includes IKEA Group’s own production operations which stands for 12% of the total a way of working. Our buyers visit suppli-
2
production with 44 production units in 11 countries
Additional mapping of local suppliers in ongoing in FY15
er sites regularly and around 90 full-time
auditors and developers support the im-
plementation of IWAY, in addition to third-
Performance in FY14 party auditors who verify audit results.
TOP 5 HOME FURNISHING
PURCHA SING COUN T R IES To ensure IWAY remains effective, we sur-
(% o f t o t a l F Y 14) veyed or conducted in-depth interviews Extending IWAY to more types
with more than 300 suppliers globally dur- of suppliers
ing the latest update of the standard. This Our goal is for the following types of sup-
allowed us to incorporate their experience plier to achieve IWAY approval by FY15:
from implementing IWAY into changes in
the requirements. IWAY 5.1 was rolled • Home furnishing suppliers
out to all our suppliers in FY14. Updates • Global transport suppliers
include: • Food suppliers
• Selected retail suppliers and Indirect
China 25%
• A new requirement for suppliers to en- Material and Services (IMS) suppliers
Poland 18%
sure their own suppliers of critical ma- • IKEA Components suppliers.
Italy 7%
terials and processes – our sub-sup-
Sweden 5%
pliers – are compliant with the IWAY Since setting the 2015 target, we have
Lithuania 4%
Musts brought additional categories of suppli-

8 2 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES 0.5% of the total).
The graphs on the next page show the Our goal is for suppliers to
FUNCTION ROLE average compliance rate with the IWAY maintain continual compliance with
IWAY Council > Has ultimate responsibility for IWAY
4.1 requirements between FY10 and FY12 all of the requirements of IWAY.
> Discusses and decides on critical IWAY related issues
and between FY13 and FY14. In the period
FY10–FY12, the average compliance rate
> Approves all IWAY Standard documents and goals
during initial audits was 78%. After the We have made good progress in many ar-
> Members include the IKEA Group President and CEO, Chief
6XVWDLQDELOLW\2I¿FHUDQG&RUSRUDWH&RPPXQLFDWLRQV0DQDJHU initial audit, suppliers had 12 months to eas, for example in FY13 and FY14 there
reach 100% compliance with the require- was near 100% compliance with the re-
IWAY Council > Develops the IWAY Code of Conduct and supporting materials
Working ments. Our business teams and sustain- quirement to have the right systems in
> Reviews audit results
Committee ability teams work closely with suppliers place to prevent child labour and protect
> Provides clarity on interpreting IWAY standards and resolves
disagreements on audit results and provide training to help them achieve young workers.
> Is responsible for the IWAY auditor training programmes ,:$<DSSURYDOZLWKLQWKH¿UVW\HDU)ROORZ However, some areas continue to be a
> Approves all IWAY Working Methods up audits for existing suppliers are con- challenge, for example ensuring continual
> Reports to the IWAY Council ducted at least once every two years (and compliance with issues relating to working
once per year in high-risk areas, such as hours, particularly in Asia. We are working
IKEA auditors > Conduct announced and unannounced IWAY audits of suppliers
Asia) and suppliers have 90 days to cor- with our suppliers to reduce working hours
> Review action plans submitted by suppliers in cases of
noncompliance rect any areas of non-compliance identi- without cutting wages or jobs, for exam-
> &RQGXFWIROORZXSDXGLWVDQGJLYH¿QDO,:$<DSSURYDO ¿HG $XGLWV IROORZLQJ DSSURYDO VKRZ WKDW SOH¿QGLQJQHZPHFKDQLFDOHI¿FLHQFLHVLQ
> Support IKEA business teams with IWAY questions suppliers maintained an average level production has helped to compensate for
of compliance of 86% which meant that increased labour costs, and optimising the
Regional/country > Have regular contact with suppliers in their region and are
IKEA business regularly on-site at factories / facilities these suppliers needed to make corrective sub-supply chain has enabled better pro-
units > Support suppliers with understanding and meeting actions after each audit to maintain IWAY duction planning. We also continually look
requirements approval. to improve the ways that we work with or-
> Are accountable for ensuring IWAY is fully implemented at In FY12, we introduced the rule that ders and capacity planning.
suppliers under their responsibility we would only work with suppliers that Audits contribute to maintaining high
Compliance and > Is independent from IKEA auditors and business units are IWAY approved. This means that new standards, but achieving the goal of con-
Monitoring Group > Monitors the degree to which internal IWAY Working Methods suppliers that fail to reach 100% compli- tinual compliance depends on the com-
(CMG) to support IWAY compliance are followed ance with IWAY requirements within 12 mitment of the supplier and whether they
> Performs audits to ensure that judgements by IKEA auditors months, and existing suppliers that do not have well-developed policies and process-
are consistent globally and results are accurate
correct non-compliances within 90 days, es in place. For example, unannounced
> Supports training and development of IKEA auditors
are phased out of our supply chain. The in- audits of IWAY Well Developed Suppliers
> Reports compliance results to IWAY Council and IWAY Council
Working Committee (ICWC) troduction of this approach has improved (a group of the best-performing suppli-
overall levels of compliance. During the ers) showed high average compliance with
Third-party > Drawn from external audit companies - independent from
auditors IKEA period FY13-FY14, audits following ap- IWAY requirements in FY13. We want all
> Verify IKEA audit results proval show that the suppliers maintained our suppliers to reach this level by bring-
> Conduct unannounced audits and calibration audits an average level of compliance of 88% ing the IWAY requirements into their own
> Report results to Compliance and Monitoring Group (CMG) compared to an average compliance rate business processes in this way. In FY14 we
during initial audits of 74%. rolled out a new version of IWAY (IWAY

R E S U LT F R O M I N I T I A L A S S E S S M E N T AT N E W S U P P L I E R S A N D F R O M A U D I T R E S U LT
5.1) as part of our efforts to further im- AT I WAY A P P R O V E D S U P P L I E R S , F Y 10 - F Y 1 2
prove standards. IWAY 5.1 is designed to
help suppliers integrate IWAY into their 10 0 %
own routines and procedures, for example
through risk assessments. Audit (average 86%)
90%
An important area of focus is for
all home furnishing suppliers in China
to fully comply with working hour lim- 80%
its. We have achieved 98.8% approval Initial assessment (average 78%)
to IWAY60 at suppliers in China, and
24% approval with IWAY. Our goal is to 70%
achieve 100% IWAY approval by FY15.
In FY14, we started with a pilot project 60%
ZLWK VXSSOLHUV DQG LGHQWL¿HG IR-
cus areas to support Chinese suppliers 01 02 03 04 05 06 07 08 09 10 11 12 13 14
to integrate more stringent working hour
requirements in to their business (see
page 86).
Our suppliers are increasingly talking R E S U LT F R O M I N I T I A L A S S E S S M E N T AT N E W S U P P L I E R S A N D F R O M A U D I T R E S U LT
AT I WAY A P P R O V E D S U P P L I E R S , F Y 1 3 -J A N U A R Y F Y 14
about the link between a more sustainable
approach to business and the bottom line. 10 0 %
IWAY is a framework they can use to be-
Audit (average 88%)
FRPHPRUHFRPSHWLWLYHE\LPSURYLQJHI¿-
90%
ciency, reducing quality issues and helping
to retain valued employees.
In FY14 we held a Supplier Week, 80%
ZKLFK LQFOXGHG RXU ¿UVW *OREDO 6XVWDLQ-
Initial assessment (average 74%)
ability Days for suppliers. We hosted 46
participants, representing 11 suppliers 70%
from eight purchasing regions. We invited
some of our best-performing suppliers to 60%
discuss the most important sustainability
issues we all face, and to share knowledge 01 02 03 04 05 06 07 08 09 10 11 12 13 14
WKDW FRXOG EHQH¿W HDFK RWKHU DQG HYHQ

contribute to IKEA’s sustainability plans. 01. Start-up requirements 05. Hazardous & Non-Hazardous :DJHV%HQH¿WV :RUNLQJ 13. Freedom of Association
Read more on page 63. 02. General Conditions 06. Fire Prevention 10. Prevention of Child Labour 14. Harassment, Abuse &
03. Environment 07. Worker Health & Safety 11. Forced & Bonded Labour
04. Chemicals 08. Housing Facilities 12. Discrimination

8 4 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES vide the ingredients for the Swedish menu
options in our restaurants and the food I WAY A P P R O VA L O F
IWAY approval at home FY10 FY11 FY12 FY13 FY14 range available in the Swedish Food Mar- FOOD SUPPL IERS
furnishing suppliers, %* (% I WAY a p p r o v e d )
ket shops.
Europe 89 90 100 100 99.5 )RU RXU LGHQWL¿HG ORFDO VXSSOLHUV
Local food suppliers, % approved
Americas 85 94 100 100 96.2 the IWAY approval rate is currently around
Global food suppliers, % approved
29%. We have not made as much pro-
Asia, total 26 41 92 97.8 97.8
gress as we hoped due to the complexity 100 100 100 100 100
China 7 30 90 99.2 98.8 of the food supply chain and are unlikely
South Asia 62 65 93 92.2 95.9 to meet our target for all local food sup-
67
pliers to be IWAY approved by FY15. Dur-
South East Asia 68 65 97 96.7 94.7
ing FY15 we will take further steps to map
All regions 57 67 96 99 98.6 the supply chain, assess risks and identify
where we need to go several layers back 27 29
*
Data for home furnishing suppliers includes IKEA Industry factories. Excludes new suppliers that have
XSWRPRQWKVWREHDSSURYHG6XSSOLHUVZKHUHDQRQFRPSOLDQFHKDVEHHQLGHQWL¿HGDQGDUHZLWKLQWKH into the supply chain.
90-day period allowed to correct the non-compliance are categorised as approved. Suppliers pending a 7
scheduled audit are categorised as approved (applies to 0.5% of the total in FY14). In FY14, the remaining Read more about how we source our 0 0
1.4% applies to suppliers being phased out. In China we are working with suppliers to reduce working hours
to comply with working hour limits. As an interim step, suppliers can become IWAY approved if working food products responsibly on page 34. FY10 FY11 FY12 FY13 FY14 GOAL
hours do not exceed 60 hours a week including overtime. FY15
Indirect Materials and

Transport suppliers proval rate for our centrally-contracted Services (IMS) suppliers with IMS suppliers and build long-term
We work with 233 directly contracted sup- customer delivery service suppliers was IKEA IMS purchases the products and ser- relationships with them. The ‘IKEA Plug-
pliers that transport our products to stores 100% in FY14. vices needed to run our business. This in- in Solution’ initiative, launched in FY13, is
and distribution centres by road, rail, river cludes equipment in our stores (such as IKEA IMS’s way of moving towards fewer
barge and sea. No airplanes are used in Food suppliers trolleys, racking and lighting), uniforms for suppliers, each providing higher volumes
our goods supply chain. In FY14, the IWAY We achieved 98% IWAY approval of our our co-workers and services such as clean- of products and services. This approach
approval rate for these suppliers was 121 global food suppliers in FY14. These ing, security and waste management. EULQJVSUDFWLFDOEXVLQHVVEHQH¿WVOLNHVDY-
100%. are the direct suppliers to IKEA that pro- Like all our suppliers, we work closely ing money on invoicing costs, providing
In April 2014, we completed the roll- a more standardised product range, and
out of the revised IWAY standard, which improving IWAY compliance and sustaina-
FRQWDLQVPRUHVSHFL¿FHPLVVLRQVUHTXLUH- I WAY A P P R O VA L O F 96
100 100 100 bility performance. But more importantly,
95 93
TR ANSPORT SUPPL IERS 91
ments for trucks (see page 54). This has it allows us to create strong partnerships
(% I WAY a p p r o v e d ) 83 82
helped keep us on track to meet our trans- with our suppliers, where we can learn
port carbon emissions reduction targets from each other.
Customer delivery suppliers,
by FY16. % of centrally contracted
53 We continue to focus on IWAY audits
Our Service Business category works suppliers approved among suppliers that pose a higher risk for
closely with the 63 transport suppliers Ocean transport providers, IWAY non-compliance. These include pro-
% approved 21
who deliver directly to customers, and viders of store lighting equipment, cleaning
Land transport providers, and waste management services. In FY14
the suppliers of product picking in-store,
% approved
assembly and installation. The IWAY ap- FY10 FY11 FY12 FY13 FY14 we conducted 58 audits at IMS suppliers.

IWAY approval of retail cleaning, security, waste FY13 FY14

We are focused on our FY15 target to vice providers. The customer delivery ser- management and customer delivery service suppliers
have all suppliers in China approved to vice providers managed by our retail op- Total number of IWAY audits conducted at retail suppliers 136 179
IWAY. In FY14 we improved levels of sup- erations are in addition to those managed Total number of retail cleaning, security, waste management 539 448
port for our China-based suppliers by of- by our Service Business (see page 84). In and customer delivery service providers
fering training on IWAY, covering details FY14 we conducted 179 audits and 40% of Retail cleaning, security, waste management and customer 19 40
about the IWAY requirements and advice the 448 suppliers in these four categories delivery service providers, % IWAY approved
on good practice, working to improve and were IWAY approved. We will continue to
maintain compliance. We are also moving conduct audits and aim to achieve 100% IWAY approval at FY10 FY11 FY12 FY13 FY14
some production from non-compliant sup- IWAY approval for suppliers in this catego- catalogue suppliers
pliers to other IWAY approved suppliers in ry by FY15. Share of catalogue paper and print 86 90 89 82 55
China. suppliers that are approved according
to the IKEA Catalogue Sustainability
The IWAY approval rate for IMS sup- IKEA catalogue suppliers Requirements (%)
pliers at the end of FY14 was 77%, com- The IKEA catalogue is produced by
Share of catalogue paper and print 65 72 70 66 68
pared with 53% in FY13. We have seen Inter IKEA Systems, the owner of the IKEA suppliers that are approved according to
considerable improvements, not least in Concept and worldwide IKEA franchise WKHLQGXVWU\VSHFL¿FUHTXLUHPHQWV
China where 22% of our suppliers moved provider.
from IWAY60 to IWAY compliance. Twice a year, all suppliers conduct
IWAY approval at IKEA Components and suppliers FY13 FY14
a self-assessment of their compliance
Retail suppliers DJDLQVW ,:$< DQG WKH LQGXVWU\VSHFL¿F IKEA Components units, % approved 100 100
In our retail organisation we continue to requirements for pulp, paper, print and Total number of IKEA Components suppliers 226 242
focus on securing IWAY approval in higher digital. We compile the results of these as- Total number of IWAY audits conducted at IKEA 146 187
risk categories: cleaning, security, waste sessments before negotiating contracts so Components suppliers
management and customer delivery ser- our purchasers can use this information to IKEA Components suppliers, % approved * 100 100
select suppliers that support our sustain- *
Includes suppliers pending a scheduled audit (applies to 0.8% of the total).
ability goals.
I WAY A P P R O VA L O F In FY14, IWAY approval was 55%, com-
I N D I R E C T M AT E R I A L S A N D
pared with 82% in FY13. In FY13, data was audits in FY15, putting us on track for our catalogue suppliers, including achieving
S E RV IC E (IM S) S U P P L IE R S
(% a p p r o v e d ) based on supplier self-assessments, but ambition to audit all catalogue suppliers by )RUHVW6WHZDUGVKLS&RXQFLOFHUWL¿HG
in FY14 we carried out 20 IWAY audits in August 2016. paper (FSC Mix Credit) for the catalogue,
co-operation with IKEA Indirect Mate- We also introduced third party audits on page 68.
rial and Services (IMS). This means the for environmental data gathered from
GOAL FY15 100
FY14 data is more accurate than what we pulp, paper and print suppliers, carrying IKEA Components suppliers
FY14 77
reported in FY13. out a combined total of 23 site visits and IWAY applies to IKEA Components and
FY13 53
We anticipated this decrease in IWAY desk reviews in FY14. These audits helped all its suppliers. These companies pro-
FY12 32 approval and have agreed corrective ac- us to further increase the reliability of the vide components and materials to IKEA
FY11 27 tion plans with catalogue suppliers where environmental data. Read more about suppliers and sub-suppliers that are used
FY10 20 needed. We plan to complete a further 30 the environmental performance of our in IKEA home furnishing products. In this

IWAY approval at IKEA Industry and suppliers FY13 FY14
IKEA Industry units, % approved 100 100

Total number of IKEA Industry suppliers 1300 1150
Total number of IWAY audits conducted at 30 100
IKEA Industry suppliers
IKEA Industry suppliers, % approved 8 60
way we have extended the scope of page 87). In FY14, we conducted 100
IWAY to include a greater number of sub- IWAY audits at IKEA Industry suppli-
suppliers. ers. Out of a total of 1,150 supplier pro-
In FY14, all our IKEA Components units duction sites, 5% have achieved IWAY
and their suppliers achieved 100% IWAY approval.
approval or were pending a scheduled au- In FY15, we will continue to imple-
dit. The IWAY scope so far did not cover a ment IWAY with IKEA Industry suppliers,
small number of after-sales suppliers; they focusing particularly on board suppliers.
will be included from FY15. In China, all We plan to undertake approximately 200
suppliers have achieved IWAY60, but we further audits in FY15 and will continue
did not collect information on the number to work with those suppliers not reaching
Tackling working hours that achieved IWAY (see page 85). IWAY standards to implement improve-
in our supply chain See box for more about our pilot ment action plans. As a supplier to IKEA,
project towards IWAY. IKEA Industry Group must also comply
We want to make sure people cies in production helped to compen- with IWAY and all sites are IWAY approved.
do not work excessive hours in our sate for increased labour costs.
supply chain. IKEA Components is Teamwork was key to the suc- IKEA Industry suppliers
engaging with suppliers in China to cess of the project. Having made the IKEA Industry supplies solid wood, board Working with sub-suppliers
reduce working hours without reduc- changes needed to achieve IWAY, on frame and board-based furniture to We know that we can have a big impact on
ing wages. In FY14, we began a pilot the supplier says it now has a better
IKEA and companies in the IKEA supply the working practices of our wider supply
project with suppliers to move towards reputation with a more stable and ef-
100% IWAY compliance, which means ¿FLHQWSURGXFWLRQEDVH,WVHPSOR\HHV chain. Since the merger of Swedwood, chain by working with the companies that
fully complying with working hour have improved relative salaries, health, Swedspan and IKEA Industry Investment supply us directly to expand IWAY to their
OLPLWV2QHRIWKH¿UVWWRWDNHSDUWZDV safety, life balance and job satisfaction.
and Development (IIID) to form IKEA In- suppliers.
a glass and mirrors supplier that was “To achieve IWAY, the key is set-
already performing well on price, ting clear expectations, securing man- dustry Group, purchasing structures are
quality and sustainability. agement commitment from suppliers now aligned with IKEA Group and we have
We met regularly with the supplier and measuring progress,” says Smith begun implementing a standard approach Our direct suppliers are respon-
and set clear goals to integrate IWAY Yang, Business Developer at IKEA
into its day-to-day operations. The Components. for these suppliers. sible for communicating the IWAY
FKDOOHQJHZDVWR¿QGZD\VWRUHGXFH We are now extending IWAY to all We have a structured timetable to code of conduct to sub-suppliers.
working hours without reducing wag- IKEA Components suppliers. reach 100% IWAY approval with all di-
HV)LQGLQJQHZPHFKDQLFDOHI¿FLHQ-
rect material suppliers by 2020 (see

Tier 2 home furnishing suppliers FY13 FY14
Total number of HF tier 2 suppliers 14,000 16,561

7RWDOQXPEHURI+)WLHUVXSSOLHUVZLWKLGHQWL¿HGFULWLFDO 2,200 1,691
materials and processes
6KDUHRI+)WLHUVXSSOLHUVZLWKLGHQWL¿HGFULWLFDOPDWHULDOV 20 91
and processes compliant with ‘IWAY Musts’, %
They also ensure that critical sub-suppliers

IKE A INDUS TRY GOAL S – those involved in higher-risk processes
FOR IWAY AT SUPPL IER S or who are based in higher-risk locations
±DFKLHYHIXOODQGYHUL¿HGFRPSOLDQFHZLWK
Embedding IWAY in our IWAY Musts. We assess compliance
By end of FY15:
our supply chain with IWAY Musts through an audit led by
• All direct material IKEA Industry
the direct supplier or a third-party audit
Group suppliers will have IWAY
Making IKEA products is a com- they fail to meet a certain require- company, and provide them with guidance
0XVWVYHUL¿HG
plicated process. More than 1,000 ment, we work with them to solve it.
companies supply our home furnishing But if it remains a problem, we won’t
• All critical direct material IKEA and training. We also conduct audits to
Industry Group suppliers will verify compliance in high-risk locations.
products and materials. Each of these work with them.”
have implemented IWAY stand-
has many of its own suppliers – IKEA’s In Poland, upholstery maker SITS In FY14, we consolidated our data on
ard 5.1 and be ready for audit-
sub-suppliers. has been working with IKEA for over
ing. sub-suppliers through a new database.
Our direct tier 1 suppliers are in 20 years, and uses IWAY to audit
a great position to help. They have its own suppliers. Michal Ryszawa IKEA co-workers and supplier representa-
By end of FY17:
already been through a rigorous explains how the process of working tives are also visiting sub-suppliers to dis-
process to make sure they comply with sub-suppliers has evolved: “While cuss and develop a better understanding
• All critical direct material sup-
with IWAY and we have longstanding SITS has been growing with IKEA, our
pliers will be IWAY audited and of IWAY Musts. In FY14, 91% of critical
relationships with them, which means suppliers have been growing with us.
approved.
we can trust them to put in place IKEA We know the whole value chain is very home furnishing sub-suppliers were ap-
requirements across their own supply closely connected, and we want to proved to IWAY Musts. This is based on
By end of FY18:
chain. We provide support and training maintain that strong working relation-
for suppliers on how to perform audits ship. Using IWAY for our own suppliers
audits of 1,085 of the 1,691 sub-suppliers
• All direct material IKEA Industry ZHKDYHLGHQWL¿HGDVµFULWLFDO¶
themselves. For many IKEA suppliers, is a win–win situation.”
Group suppliers will have imple-
all of their own suppliers have reached It is not always easy – changing We came close to reaching our goal
mented IWAY 5.1 and be ready
compliance with IWAY Musts. mentalities and bringing IWAY to life
for auditing. to secure compliance to IWAY Musts at all
Ján Kapec is the Purchasing and can be a challenge – and we work with
Sales Manager at Ekoltech, one of our our suppliers to understand what we critical second-tier suppliers by the end of
By end of FY20:
pigment lacquer MDF (medium density can do better to help them ensure FY14. Considering the challenges of secur-
¿EUHERDUGVXSSOLHUVLQ6ORYDNLD+H their own suppliers are up to standard. ing sub-supplier compliance, we are proud
• All direct material IKEA Industry
is used to working with IWAY, both We are proud of the way in which they
within Ekoltech and with its suppliers. treat IWAY as part of everyday work.
Group suppliers will be IWAY of what has been achieved and continue
audited and approved. to work towards our 100% goal, as well as
“Companies must pass IWAY’s basic As Ján from Ekoltech says: “It’s not
requirements before we even consider a case of doing something extra, it is aiming for compliance along entire value
them as a supplier,” he explains. “If part of who we are.”
chains in critical areas by the end of FY17.

Supporting $GYRFDWHIRUFKLOGUHQ¶VULJKWVE\LQÀXHQFLQJSROLF\GHYHORSPHQWUDLVLQJDZDUHQHVV
human rights and supporting families in vulnerable communities.
Develop and implement a transparent and reliable system for the responsible recruit-
PHQWRIPLJUDQWZRUNHUVDW¿UVWWLHUVXSSOLHUVLQLGHQWL¿HGFULWLFDODUHDVE\$XJXVW
Continuously identify and develop setups for home-based workers to improve

working conditions, protect labour rights and prevent child labour. By August 2020,
all home-based workers are transitioned into improved setups and part of our
handmade development programme.
Support the development of small-scale social entrepreneurs into IKEA suppliers

OHDGLQJWRGHPRQVWUDEOHVRFLDOEHQH¿WVVXFKDVWDFNOLQJSRYHUW\)LYHQHZOLPLWHG
edition collections from the IKEA Social Entrepreneur initiative launched in three
countries before February 2015.
The right to be a child own workforce and our suppliers.

Every child has the right to a childhood – to The IKEA Way on Preventing Child
learn, play and develop. We are guided by Labour outlines our strict stance against
the United Nations (UN) Guiding Principles child labour and how we work to prevent
on Business and Human Rights launched it. It describes how we will act in the best
in 2011, and the Children’s Rights and interests of the children involved if any
Business Principles launched by UNICEF, cases of child labour are found. We regu-
Save the Children and the UN Global Com- larly update our requirements and through
pact in 2012. IWAY, these requirements are being
extended to our sub-suppliers too (see
page 79).
We strive to make children feel In many countries, young workers,
welcome in our stores and provide particularly those between the ages of 15
We want to empower people within our working in our supply chain to better un- products in our Children’s IKEA range and 18, do not have the opportunity to
extended supply chain to create better derstand the challenges they face and de- that promote safety, education, continue their schooling. We support the
lives for themselves. velop relationships based on partnership play and development. legal employment of young workers in our
The voices of migrant workers, home- DQGPXWXDOEHQH¿WUDWKHUWKDQFKDULW\ supply chain by providing entry-level jobs
based workers and those with limited ac- Protecting children’s rights is an impor- and enabling their career development. All
cess to resources or skills development tant focus for IKEA. We do this through The work of the IKEA Foundation centres the younger workers in our supply chain
often go unheard. They can end up fac- advocacy, raising awareness and by on the rights of children and their fami- must be employed under conditions that
ing poor working conditions and living in supporting families in vulnerable commu- lies (see page 93). But our responsibility to support their development and do not put
poverty. We talk directly to the people nities. children and young people extends to our them at risk.

8 9 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES Migrant workers
The desire for a better life and a better fu-
HUMAN R IGHT S GOVER NANC E
ture for themselves and their families can
often take people far from home on the
promise of a job that can provide just that. Respect for human rights is part
Far too often this initial promise can turn of how we work. It is integrated
into important policies, codes and
to hardship, with high fees and recruit-
standards such as:
ment practices that leave the most vulner-
able workers further in debt.
• The IKEA Way on Preventing
Our IWAY requirements for suppliers Child Labour
(see page 79) set clear standards for the
• The IKEA Way on Purchasing
recruitment and employment of workers, Products and Services (IWAY),
for example a requirement that passports our supplier code of conduct
should never be withheld from workers.
• IKEA Group Code of Conduct
We work with our suppliers to ensure
these requirements are met and to pro- • IKEA Group Standard on Human
Rights
tect the rights of migrant workers. But we
know that recruitment processes in many • IKEA Group Policy on People
Leave the countries can involve complex layers and • IKEA Group Standard on People
opaque practices that can only be tackled
weaving at work by taking a wider approach. For example,
• IKEA Group Policy on
Sustainability.
IWAY includes a requirement that no fees
In Thanh Binh, three hours south house, two children, pig, hens, rice and should be paid by workers relating to re-
In FY15 we will launch new guide-
of the Vietnamese capital, Hanoi, is a VXJDUFDQH¿HOGVDQGFURFKHWHGWR cruitment; however, the lack of visibility of lines on human rights in communi-
building with large skylights and ceiling earn money for the family. cation to provide guidance on how
practices back to the home country makes
fans. Here, around 1,400 women are Now she has a job outside her to ensure IKEA communications
sitting on plastic chairs crocheting amid KRPHZLWKDFRQWUDFWÀH[LEOHZRUN- it a challenge to ensure that this require-
UHÀHFWRXUYDOXHVDQGFRPPLWPHQW
the background buzz of small talk. The ing hours, Sundays off and accident ment is met and means that the issue can to human rights.
youngest is 17 and the oldest is 83, insurance. The weaving centre gives
only be tackled in partnership with others.
with no intention of retiring – she loves suppliers more control over working We strive to prevent any nega-
being part of the Thanh Binh weaving conditions, increases productivity and tive impacts on human rights as-
centre community. enables craftworkers to have jobs out- Home based workers sociated with our business. Where
The centre, which opened in July side their homes with regulated hours, The informal sector is an important con- ULVNVDUHLGHQWL¿HGZHVWUHQJWKHQ
2013, makes products only for IKEA. a safe working environment and higher our due diligence processes and,
Using just crochet hooks and their wages than before. tributor to family income for people in are-
when necessary, provide access
skills, the women here make beautiful For Én, the change has been about as of poverty. Short term jobs like working
to a remedy – the steps an organi-
products they have designed them- more than money: “I earn more now, at home to weave or sew handicrafts pro- VDWLRQWDNHVLILW¿QGVLWKDVFDXVHG
selves together with IKEA designers. but the biggest change is that I feel or contributed to human rights
YLGH ÀH[LELOLW\ DQG WKH DELOLW\ WR FRPELQH
Én Nguyèn Thi, 41, was one of the happier. I have friends here and we violations.
¿UVWZRPHQZKROHDUQWWRFURFKHWZKHQ get the chance to talk about life while tasks that are part of home life with work.
IKEA production began here. Like many we are working. I’m more of an equal However, it often offers limited job secu-
other women in Vietnam, Én used to sit partner with my husband now.”
rity and poor working conditions.
alone at home looking after the family’s
We have started to implement new

working methods in parts of our sup- Social entrepreneurs

ply chain that traditionally rely on home- Social entrepreneurs are guided by a wid-
based workers. In some cases, this in- er social mission in the way they do busi-
volves collaborating with our suppliers to QHVV7RWKHPPDNLQJDSUR¿WLVQRWWKH
develop completely new ways of working. only goal.
For example, a decade ago we began a In the past our supply chain model has
journey to consolidate production for our not allowed for collaboration with small-
handmade carpets in the Bhadohi region scale suppliers as their production cannot
in India, changing from more traditional meet the demands of our global business.
village-based small scale production to But we have realised the huge potential of
in-house production at our suppliers’ fa- working with these small groups – busi-
cilities. Today we work with around four QHVV EHQH¿WV IRU ERWK XV DQG WKH VXS-
suppliers located near the villages, there plier, combined with social development.
are no middle men and outsourcing of pro- In the poorer areas where we work with
duction is not allowed. This has improved social entrepreneurs, there are generally
working conditions, wages, and ergonom- high rates of unemployment for women. Creating opportunities
ics for the people in the Bhadohi region Working with IKEA through our partners
and we are able to work even more closely gives social entrepreneurs an opportunity for artisans in Thailand
with the suppliers to ensure production to make their own living and improve the
Life in the Doi Tung area of Chiang to develop a self-sustained livelihood
meets our IWAY standards. quality of life for themselves and their chil-
Rai province in Thailand used to be away from opium production. It em-
Together with our suppliers, we have dren. It also nurtures local craft traditions very different. ploys 1,700 people, including 470 arti-
also set up weaving centres in Vietnam and prevents migration to big cities for “In the past, people in Doi Tung sans working with handicrafts, and its
to bring home workers together into a vi- work. did shifting cultivation. They cut down social mission is to revive lost natural
trees to plant corn, rice and opium. It forests and to improve healthcare and
brant community (see page 89). The cen- Over the last two years we have been ZDVDYHU\GLI¿FXOWWLPHDQGZHOLYHG education in the community.
tres offer improved working conditions, working with social entrepreneurs to pro- day by day. There weren’t any doctors ³,ZDVSDUWRIWKH¿UVWJURXSZKR
ÀH[LEOHZRUNLQJKRXUVDQGKLJKHUZDJHV duce limited-edition collections to be sold so people used opium as the remedy started textile weaving when we only
for pain killer for toothache or stom- had 12 people,” Come explains. “When
Contracts for workers and full compliance in selected IKEA stores. We focus on social ach ache. When they used too much the Doi Tung Project started, every-
with applicable IWAY requirements are entrepreneurs who: opium, they became addicted to it. thing changed – roads, electricity,
helping to transform this informal work- At that time, we didn’t have nation- work and income.”
ality so we couldn’t work, couldn’t We wanted to support this work,
force into a more formal sector. We are • Work with handicrafts (textiles, natural
go anywhere. We were stuck in Doi while creating business value for both
training suppliers, mapping home-based ¿EUHVDQGFHUDPLFV Tung. Some people even traded their us and the artisans. So in 2007, IKEA
workers and working with third-party au- • Contribute to social change, poverty daughters for money,” recalls Come partnered with DTDP who have since
GLWRUVWRFUHDWHDYHUL¿FDWLRQSODQ:HDUH reduction and women’s empowerment Takcomesing, a woman who lives in created three ranges for our stores.
the area. Most recently, the INVERKAN range –
at the beginning of the journey to create in some of the world’s poorest commu- Come has been working with the a selection of hand-woven textiles and
new working methods in areas that tradi- nities Doi Tung Development Project (DTDP) ceramics – was launched in 20 IKEA
tionally rely on home-based workers, and • We can form solid, long-term business for 22 years. The project aims to en- stores in autumn 2014.
able the tribal villages in Chiang Rai
we look forward to developing in this area. relationships with.

ANSWER
“Respect for fundamental hu-

man rights is an essential part of
the IKEA vision: to create a better
everyday life for the many people.
This means that we look for oppor-
tunities to promote human rights
through our actions and the way
we communicate, and must also
avoid negative impacts, for exam-
ple by unintentionally discriminat-
Stakeholder ing against a minority group. The
removal of woman from the Saudi
challenge Arabian version of the IKEA Cata-
logue was a regrettable mistake.
QUESTION We have since strengthened our
routines and guidelines to ensure
WKDWWKH,.($FDWDORJXHUHÀHFWV
“As a Swedish company, IKEA
what we stand for, while at the
has a reputation for being broadly
same time showing respect for the
liberal. But a number of recent
cultures of different markets.
incidents caused shock. In Saudi
We believe everyone should be
Arabia, IKEA airbrushed women
treated equally and we want to
from the catalogue, and in Russia it
play our part in ending discrimi-
removed the story featuring a Brit-
QDWLRQ5HÀHFWLQJGLYHUVLW\LQRXU
ish family with lesbian parents from
communications is an important
WKH,.($)DPLO\/LYHPDJD]LQH
Short product runs match the pro- tions from the IKEA Social Entrepreneur Is IKEA caving into discrimina-
part of promoting human rights.
We believe that publishing an
duction capacity of our partners, and initiative in three countries before Febru- tory laws in repressive regimes?
DUWLFOHLQRXUFXVWRPHUPDJD]LQH
What moral responsibility do you
we spread production over the year with ary 2015. During the coming year we will have to use the power of your global
in 24 countries featuring a lesbian
couple was a good example of that.
working hours that suit those involved. We ODXQFKWKH¿UVWFROOHFWLRQIURP,QGRQHVLD EUDQGWRDI¿UP\RXUFRPPLWPHQWWR
We were unfortunately unable to
international human rights stand-
support the social entrepreneurs in devel- We sell collections mainly made by women ards, including non-discrimination,
publish the article in Russia due to
legal restrictions. Whilst this con-
oping skills such as design, production, through these partnerships in 20 stores wherever you operate?”
ÀLFWVZLWKRXUFRPPLWPHQWWRSUR-
environmental management and export. and plan to increase this number to 29 moting diversity, we comply with
Frances House, Director of Programmes,
We collaborate with the local artisans on stores by March 2015. the law where we operate and the
Institute for Human Rights and Business
only way we could legally run such
designs and patterns to produce commer- We also work with local co-operatives articles would be to adapt the con-
cial items – local crafts with global appeal. and social entrepreneurs in developed tent in a way that is incompatible
with our values. To raise aware-
Over time, we build lasting relationships countries such as Denmark, Sweden and ness about the issue, we included
and work with our partners to develop the USA, with women who are immigrants a letter about our commitment to
HTXDOULJKWVLQWKHPDJD]LQHLQ
their businesses and become self-reliant. DQG ¿QG LW WRXJK WR JHW LQWR WKH ODERXU countries, including Russia. As we
This allows us to move on and support the market. In the Rosengård area of Malmö in PRYHIRUZDUGZHDUH¿UPO\FRP-
mitted to promoting diversity and
next generation of social entrepreneurs. Sweden, with a very high unemployment inclusion for our co-workers and to
We currently launch two collec- rate, we are working with a local co-opera- promote human rights through our
tions from India and one from Thailand tive association of women to develop busi- communications and actions.”
each year and have achieved our goal of ness skills and local collaboration through Petra Hesser, Human Resources
ODXQFKLQJ ¿YH QHZ OLPLWHGHGLWLRQ FROOHF- craft and sewing services. Manager, IKEA Group

Lasting changes Engage customers and co-workers in annual local and global campaigns for a good cause
for communities to improve children’s lives in the developing world. Annual donations will reach EUR 20
million by August 2020.
By June 2015, the IKEA Foundation will implement programme(s) to promote children’s
ULJKWV¿JKWFKLOGODERXUDQGFUHDWHRSSRUWXQLWLHVIRUIDPLOLHVOLYLQJLQ%UD]LO¶VOHDWKHU
supply chain communities.
By December 2016, the IKEA Foundation will develop programmes to help families and
communities secure access to quality drinking water in water stressed areas.
By 2015, the IKEA Foundation aims to have launched a programme to help women
in India develop the skills they need to improve their income and succeed in India’s
changing economy.
By August 2020, more than 500 co-workers from around the world will have participated
in IKEA Foundation IWitness trips by visiting schools and communities that are support-
ed by IKEA’s annual good cause campaigns.
All IKEA Group units will engage in local community activities in line with People & Planet
Positive, based on local needs assessment and co-worker engagement.
charitable causes, by providing know-how, Performance in 2014

co-workers’ time and donation of prod- In 2014, the IKEA Foundation donated
ucts. Both to receivers shared with IKEA EUR 104 million through funds from IKEA
Foundation and others. SUR¿WVWRRUJDQLVDWLRQVJOREDOO\
Our stores, distribution centres, facto- The Foundation entered the City
ULHVDQGWUDGLQJRI¿FHVZRUNZLWKORFDODQG A.M. /KPMG World Charity Index as the
global partners and community groups – 14th biggest private sector donor in the
particularly those supporting children, ref- world in December 2013.2 We are proud of
We want to empower others to cre- ent charitable foundation that focuses ugees and homeless people. this achievement. But we know that com-
ate better lives for themselves. Globally, on protecting children from child labour, We host community events and work mitment, partnership and good ideas are
the IKEA Foundation supports projects providing a better life for refugee chil- with NGOs to help improve the local envi- just as important as money for creating
in some of the world’s poorest communi- dren, and empowering girls and women. ronment. Co-workers and customers give lasting change.
ties. Locally and nationally, our stores and Through grants and product donations their time and resources to support these
other facilities form partnerships with key from the IKEA Foundation, conditions activities. Innovating together
organisations to create changes, large and for families living in some of the world’s Creative thinking can lead to high returns
small. poorest communities are improved. IKEA on social investment. Innovation is
The IKEA Foundation1 is an independ- Group supports IKEA Foundation in its essential to reach more people and
1
The IKEA Foundation manages philanthropy for the Stichting INGKA Foundation, the owner of the IKEA Group. 2
Based on total grant giving in 2012.

T H E I K E A F O U N D AT I O N
The IKEA Foundation is a charity • Better lives for refugee children and
registered in the Netherlands. It aims families. Projects that address chil-
to improve opportunities for children dren’s need for a safe place to call
and youth in the world’s poorest com- home, and sharing IKEA’s specialist
munities by funding holistic, long-term logistics knowledge to help part-
programmes that can create substan- ners get emergency supplies where
tial, lasting change. they’re needed quickly.
The Foundation works with strong • Fighting the root causes of child
strategic partners applying innova- labour and promoting children’s
tive approaches to achieve large-scale rights. Programmes that promote
results in four fundamental areas of children’s rights, giving them ac-
a child’s life: a place to call home; a cess to education, healthcare and a
healthy start in life; a quality educa- sustainable family income so they
tion; and sustainable family income. can create more opportunities for
These partners range from small themselves and their families.
NGOs working on innovative solutions • Empowering women and girls.
to larger organisations such as the
UN Refugee Agency (UNHCR) and
Investments that empower women
– through education, skills training,
)URPFRWWRQ¿HOGV
Médecins Sans Frontières, which better healthcare or providing a loan to classrooms
enable these innovations to reach to set up a small business – in order
the many children that need them. to improve children’s health, educa-
By 2015, more than 100 million tion and future opportunities. “My friends used to ask me to go young people in India to move out of
FKLOGUHQZLOOKDYHEHQH¿WHGIURP • Emergency response. Donation to school with them,” says 10 year-old work and into education. The pro-
current IKEA Foundation-funded of IKEA products and provision of Tejas Atote. “They would tease me gramme reached 600,000 children,
programmes. ¿QDQFLDOVXSSRUWIRUKXPDQLWDULDQ for not being able to go. What could I enabling more than a quarter of them
The programmes funded by the relief efforts. have done? I had to work.” to access learning.
IKEA Foundation fall into the following Tejas’ parents were earning less Tejas is one of these children. With
broad areas: For more details on the Foundation than EUR 2 a day between them, support from Save the Children and
and its innovative partnerships, go ZRUNLQJLQWKHFRWWRQ¿HOGVQHDUWKHLU funding from the IKEA Foundation, his
to the IKEA Foundation website village home in Maharashtra, India. village set up a children’s group that
www.IKEAfoundation.org. This was not enough to support the supported his return to school. Today,
family, so the boy had to leave school Tejas goes to school regularly, and
to join them. DVSLUHVWREHFRPHDSROLFHRI¿FHU
He hated the work. “My back But there are many more young
ached every day... and I was fright- SHRSOHVWLOOZRUNLQJLQ¿HOGVDQG
ened that snakes or spiders would bite factories across India. That is why we
A N N U A L D O N AT I O N B Y *
Based on total grant giving in 2012. me. I wanted to study.” Tejas was not increased our funding by EUR 7 million
I K E A F O U N D AT I O N *
alone. In India, more than 12 million in 2014. Targeted at the 790,000 chil-
2014 €104 million children work, the majority in the agri- dren living in cotton communities in
2013 €101 million cultural sector. India, this support should help many
At IKEA, we believe in a healthy, to get an education and, like Tejas,
2012 €82 million
secure childhood, when young people IXO¿OWKHLUSRWHQWLDO
2011 €65 million can learn, play and develop. Five years
2010 €45 million ago, the IKEA Foundation partnered See page 31 for more on how we
*
Includes donations relating to the Soft
Toys for Education and Brighter Lives with Save the Children to enable more are sourcing cotton responsibly.
for Refugees Campaign.

9 4 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES create real change with limited resources. develop a safer, more durable emergency
We encourage dialogue internally and with shelter for refugee families. Some of the
our partners to share ideas and best prac- world’s most vulnerable families are test-
tices. We invest in programmes to come ing around 50 prototype shelters in the
up with new solutions to known prob- ¿HOGZLWKWKHIHHGEDFNJDWKHUHGLQIRUP-
lems and develop proof-of-concept pro- LQJ GHVLJQ PRGL¿FDWLRQV 7KH )RXQGDWLRQ
grammes that will help governments and also supports UNHCR’s quest for other
other funders increase reach. innovations such as solar street lights to
The IKEA Foundation’s partnership improve life in refugee camps.
© UNHCR/ S. Baldwin
with the UNHCR and the Refugee Housing For more details of other innovative
Unit is a ground-breaking example of col- projects, see the IKEA Foundation website
laboration, technical innovation and prac- at www.IKEAfoundation.org.
tical application. The partnership aims to
Making lives DONAT IONS AF TER DISA S TER S
brighter for refugees All children should have the oppor-

tunity to learn and play. But when
“It’s lighting that we need most,” says co-workers and customers with a QDWXUDOGLVDVWHUVDQGFRQÀLFWVWXUQ
Um Fadi, a Syrian refugee living in campaign to support this initiative. their lives upside down, they lose
Jordan’s Al Azraq camp. In sole charge For every LEDARE LED light bulb the chance to simply be a child. The
of her niece Rama, 12, and nephews sold in February and March 2014, the IKEA Foundation provides funding
Anas, 11, and Malek, 8, poor lighting is Foundation donated EUR 1 to UNHCR. and donates products for humani-
a problem: “The children get anxious And in Australia, UNHCR representa- tarian relief efforts that support
at night-time, and when darkness falls, tives - all former refugees – went into children and their families affected
you don’t always feel safe.” IKEA stores to share their experiences by disasters. In 2014, we:
Today, there are nearly 11.7 with customers and their children.
million refugees under UNHCR’s care, The campaign has raised EUR • Donated IKEA children’s products
and around half are children. Every PLOOLRQLQLWV¿UVW\HDUDORQH7KH to go in UNICEF’s early childhood
year, millions more families are forced funds are supporting the installation of development kits for around 1.2
WRÀHHWKHLUKRPHVEHFDXVHRIFRQ- solar street lights, which are lighting million children
ÀLFWVRUQDWXUDOGLVDVWHUV0DQ\¿QG up the pathways and enabling com- • Committed EUR 1.3 million to Save
safety in UN Refugee Agency (UNHCR) munities to come together for events the Children’s innovative pilot
camps. Darkness can make even more frequently. The donation will also programme to protect children’s
everyday activities like using the fund the distribution of solar lanterns, rights in humanitarian crises
toilet or collecting water dangerous, allowing children to study after dark, • Supported Médecins Sans
especially for women and girls. and enabling refugees like Um Fadi to Frontières with a donation of EUR
Home-working and studying also earn money at home in the evenings PLOOLRQWRKHOSWKHP¿JKWWKH
suffer in poorly lit environments. through activities like weaving, sewing Ebola outbreak in West Africa.
The IKEA Foundation is working or running small shops. • Sent 150,000 blankets, quilts
with UNHCR to improve lighting, re- With the campaign now set to and pillow cases to UNHCR for
newable energy and primary educa- continue over the next two years, we refugees in Iraq to provide
tion in camps across Africa, Asia and hope to create brighter futures for some comfort to people who
the Middle East. IKEA has engaged many more refugees. are suffering.

9 5 A BE T TER L IFE FOR PEOPLE AND COMMUNI T IES Customer and co-worker
campaigns I W I TNE S S
Co-workers and customers play a big part
in our efforts to create a better life for peo-
IKEA co-workers around the world
ple and communities, and to contribute to work hard to promote campaigns
a more sustainable world. Here are some such as Soft Toys for Education (see
recent examples of their involvement: left) and Brighter Lives for Refu-
gees, helping to raise more money
and increase impact. Every year,
• Norway: More than 87,000 school the IKEA Foundation’s IWitness
children participated in the Tea Light programme invites small groups of
FRZRUNHUVWRVHH¿UVWKDQGZKDW
Hunt, contributing to the collection of a difference these campaigns make
around 30 million used tea lights for and share their experiences with
recycling, raising awareness of recy- other co-workers, customers, friends
and family on the IWitness Global
cling among the children and their par-
Citizens blog.
ents, saving more than 170 tonnes of In 2014, 105 co-workers in 17
CO2 and reclaiming 20 tonnes of alu- countries experienced IWitness trips
minium (see page 60 for more on how to countries including Bangladesh,
Indonesia, Kosovo and Sierra Leone.
we are making the most of waste in
Norway). Read the IWitness Global Citizens
• Romania: Co-workers helped to re- blog at blog.ikeafoundation.org.
furbish three houses to improve the
lives of children living in SOS Chil-
dren’s Village Bucharest – a safe and
supportive community that provides • US: Since FY11, more than 120 chari-
homes for children who are no longer ties have received over USD 1 million
Working together able to live with their biological family. (EUR 846,000) in IKEA products, de-
for 12 years of soft toys • Spain: IKEA Food is encouraging chil- sign expertise and time as part of the
dren to support other children, with Life Improvement Challenge. IKEA US
Every year, the IKEA Foundation children in 46 countries. In FY14, IKEA EUR 1 (or ‘one smile’) for every healthy co-workers nominate local charities to
donates EUR 1 to Save the Children Portugal increased sales of soft toys
children’s menu sold going to Menudos win an IKEA makeover of a space that
and UNICEF for every soft toy sold in by 60% thanks to a strong focus on
IKEA stores in November and Decem- customer engagement and education &RUD]RQHVDQRQSUR¿WIRXQGDWLRQIRU helps to improve the lives of others in
ber. The money is spent on children’s about this project. children with heart problems, along the community.
educational projects in some of the The Soft Toys for Education with further funds raised through auc-
world’s poorest communities. Educa- FDPSDLJQLQ)<ZLOOIHDWXUH¿YHQHZ
tion is a powerful and effective way fairy-tale characters, as well as our tions, collection boxes and other activi-
to enable children to escape poverty. ¿UVWHYHUJOREDOGUDZLQJFRPSHWLWLRQ ties. Since FY12, over 250,000 ‘smiles’
Since the Soft Toys for Education for children. Ten winning designs for have funded accommodation, hospital
campaign began in 2003, our co-work- soft toys will be brought to life to
rooms, psychological support and a
ers and customers have raised EUR 67 create a limited collection of toys by
million supporting more than 11 million kids for kids. new centre providing specialist facili-
ties for children and their families.

9 6
Governance
and ethics
Our culture, based on the spirit of togetherness,
HQWKXVLDVPDQGIXQGH¿QHVWKHZD\ZHZRUNDQG
is key to our success.
We recruit capable people who share our values
and we expect a lot of them. Their commitment
and passion mean we can give everyone more
responsibility, which leads to quicker, better
decisions and more effective actions.
We want to make sustainability an integral part
of every co-worker’s daily work as this is essential
for creating a more sustainable IKEA.
> How we work > Sustainabilit y governance and management > Business ethic s > Public polic y > About our repor ting

9 7 GOVER NANCE AND E T HICS
How we work Charity

Stichting IKEA Foundation
Stichting INGKA Foundation
Owner of the IKEA Group 0DQDJHPHQWRI¿QDQFLDODVVHWV
Stichting IMAS Foundation
The IKEA Group of companies (INGKA Hold-
ing B.V. and its controlled entities) has an
ownership structure that ensures independ-
ence and a long-term approach. Stichting
INGKA Foundation in the Netherlands is our
owner, and its funds can only be used in The IKEA Group
two ways: reinvested in the IKEA Group or (INGKA Holding B.V. and its controlled entities)
donated for charitable purposes through the Chairman of the supervisory board, Lars-Johan Jarnheimer*
Stichting IKEA Foundation. President and CEO, Peter Agnefjäll
INGKA Holding B.V. is the parent company
of the IKEA Group, located in Leiden, Neth-
erlands. As per 15 January, its Supervisory Production Range & Retail & Group Functions
Board consists of: Lars-Johan Jarnheimer
Supply Expansion Business Navigation & Finance
(Chairman); Stina Honkamaa Bergfors; Tore
Corporate Communications
Bertilsson; Luisa Delgado; Jonas Kamprad; 44 9,500 315 HR
Göran Lindahl; and Lone Fønss Schrøder. In- Production Units Products IKEA Group Stores IT
gvar Kamprad, the founder of IKEA, is senior
20,100 27 110,800 Legal
advisor to the Supervisory Board.
Co-workers Trading Service Co-workers Risk Management & Compliance
The IKEA Group is led by its President and
CEO, Peter Agnefjäll, together with Group 2I¿FHV Strategy & Process
Management. Sustainability
13
The IKEA Group operates throughout the Customer Distribution
whole value chain from range strategy and Centres
product development to production, dis-
34
tribution and retail. This includes our own
Distribution Centres Centres
PDQXIDFWXULQJXQLWVWUDGLQJVHUYLFHRI¿FHV
customer distribution centres and 315 stores 16,100 Shopping centres
in 27 countries. In total, the IKEA Group has Co-workers
operations in 42 countries. Asset Management
The IKEA Group franchises the IKEA retail
Financial & Core related assets
system from Inter IKEA Systems B.V. in the
Netherlands. Inter IKEA Systems B.V. is the *Replaced Göran Grosskopf as new chairman of the IKEA Group from January 2015.
owner of the IKEA Concept and the world-
wide IKEA franchisor.

9 8 GOVER NANCE AND E T HICS Each business unit and country retail Working with others
organisation has a sustainability organisa- We can achieve many things on our own,
tion, and the larger business units have but often we choose to collaborate with
Sustainability governance their own sustainability team. They are others to maximise our impact and cre-
supported by the central Group Sustain- ate lasting change. Wherever possible,
and management ability team, which reports to Steve How- we partner with governments, industry
ard and focuses on sustainability policy organisations, NGOs and trade unions to
and compliance, reporting, and communi- strengthen our sustainability efforts.
cations and innovation. Together with our partners, we are
The Sustainability Management Group, striving to transform how we work across
chaired by Steve, brings together sustain- our value chain – from factory and farm,
ability managers from the main business to stores, to customers’ homes and, even-
areas – Retail and expansion, Range and tually, to our products’ end-of-life. Long-
Supply, IKEA Industry and IKEA Food – as term partnerships with WWF, the Forest
well as the Heads of Policy and Compli- Stewardship Council (FSC) and the Bet-
ance, Sustainability Communication and ter Cotton Initiative are increasing the
Sustainability Innovation. The group helps level of responsibly sourced materials and
to co-ordinate efforts and make key deci- resources we use across our global sup-
sions on sustainability. ply chain. The IKEA Foundation’s part-
Progress against our sustainability ob- nerships with UNICEF, War Child, Me-
jectives is reported to Group Management decins Sans Frontieres and others focus
and the Board of Directors every three on improving the lives of children and
months. refugees in some of the world’s poorest
Any risks or concerns relating to sus- communities.
WDLQDELOLW\DQGFOLPDWHFKDQJHDUHÀDJJHG We established new partnerships in FY14:
by sustainability managers to the IKEA
Group Risk Committee. The committee in- • Business and climate change. IKEA
cludes three members of Group Manage- is part of, and helped to form We Mean
Sustainability is one of the four stra- Steve is a member of Group Management ment, and meets around four times a year. Business, a newly launched coalition
tegic cornerstones of the IKEA Group di- and reports directly to the Group Presi- The most serious risks are communicated of organisations that brings together
rection, ‘Growing IKEA Together’, and is dent and CEO, Peter Agnefjäll. to the Group Sustainability team for fur- global businesses to accelerate action
fundamental to our success. The business ther action if needed. on climate change. See page 104 for
SODQIRUHYHU\,.($EXVLQHVVXQLWVSHFL¿HV Read more about how sustainability is more information.
how it will contribute to our sustainability All co-workers are responsible for becoming a bigger part of everyone’s daily • Fair wages. We are working with the
objectives. sustainability in their area of work. work on page 44. Fair Wage Network (FWN) to under-
2XU&KLHI6XVWDLQDELOLW\2I¿FHU6WHYH stand how we can ensure fair wages
Howard, has overall responsibility for per- and working conditions across all
formance against our sustainability com- Hundreds of people across IKEA have so- our countries of operation and in our
mitments – within Growing IKEA Togeth- cial and environmental objectives as part supply chain. See page 72 for more
er and People & Planet Positive strategy. of their formal job description. information.

9 9 GOVER NANCE AND E T HICS Engaging co-workers and As well as our co-workers talking to
customers customers directly about sustainability,
• Product impact. We are members World Resources Institute. Every IKEA co-worker, in every store, dis- we communicate using in-store informa-
of the Sustainable Apparel Coalition, We took the group’s feedback on our tribution centre, production unit and of- WLRQ IRU H[DPSOH RQ OHDÀHWV DQG SULFH
which is expanding its focus to include People & Planet Positive Strategy in FY13 ¿FHSOD\VDUROHLQDFKLHYLQJRXUVXVWDLQ- tags), discounts on more sustainable
home textiles. The vision is an ap- seriously and conducted further meetings ability goals. To enable everyone to make products, interactive experience days and
parel, footwear and home textiles in- through FY14 to build on their input. sustainability part of their everyday work workshops, and other channels such as
dustry that produces no unnecessary While our environmental focus is seen at IKEA, we are creating opportunities for our catalogue and our website. IKEA FAM-
environmental harm and has a positive as well developed, some members of co-workers to contribute their ideas and to ILY members receive additional discounts
impact on the people and communities the Advisory Group felt that we could be learn about sustainability. Our new train- on products like our Hanergy solar pan-
associated with its activities. bolder and clearer on our work with peo- ing package is designed to ensure that all els. Read more about how we inspire our
• Product innovation. We are a found- ple and communities. We recognise that co-workers understand and are inspired customers to be more sustainable on
ing partner of LAUNCH Nordic, an in- everything we do at IKEA – from food to by sustainability – see more on page 76. page 19.
novation platform launched in 2014. It forestry – involves people and our strat-
brings together industry leaders and HJ\VKRXOGUHÀHFWWKLV'XULQJWKH\HDUZH
innovators to identify scalable sustain- have made our commitment to People and We run regular co-worker
able technologies in materials, such as &RPPXQLWLHVFOHDUHUE\UHGH¿QLQJRXUIR- campaigns to raise awareness
XVLQJ UHF\FOHG FRWWRQ ¿EUHV DQG QHZ cus areas and targets (see page 107). and encourage participation
dyeing techniques. The Advisory Group reconvened in in sustainability.
• Renewable energy. IKEA is a found- May 2014 to give their feedback on our
ing partner of RE100, an international updated People & Planet Positive strat-
initiative to support companies aiming egy. They met with our President and CEO In FY14, we held a global competition to
to be 100% renewable. See page 104 and three other members of Group Man- encourage co-workers to increase sales
for more information. DJHPHQWRXU&KLHI6XVWDLQDELOLW\2I¿FHU of LEDARE LED light bulb for the Brighter
Group HR Manager and Range & Supply Lives for Refugees project (see page 94).
Learning from stakeholders Manager) and senior sustainability experts The IKEA People & Planet Ideas web-
We are always open to feedback – by lis- from around the business. We made some site is where we encourage co-workers in
tening to others, we can make positive further updates to our strategy as a result distribution, food and retail to share their
changes and develop long-term plans. We of these discussions (see page 100). inspiring stories about being more sus-
regularly invite our customers, suppliers, We also held a larger ‘Future Search’ tainable. Read more about how we com-
NGOs and other stakeholders to discuss meeting for stakeholders that brought municate with our co-workers on page 76.
what they think about our sustainability together NGOs, customers, industry rep- We want our co-workers to live and
performance. resentatives and others. The goal of this breathe sustainability so that they can be
In FY13, we set up a dedicated Advisory dynamic session was to paint a picture the best ambassadors for our work. See
Group to challenge and inspire us to con- of the sustainable IKEA of the future and page 21 for more on our More Sustainable
tinually improve our strategy. The Advisory ZRUNRXWKRZWRJHWWKHUH7KH¿UVWPHHW- Life at Home co-worker engagement cam-
Group is made up of senior representatives ing outlined issues in food sustainability, SDLJQ$QG¿QGRXWKRZZHHQFRXUDJHDOO
from NGOs such as The Climate Group, and we will hold sessions later in the year our retail managers to measure their local
the Institute for Human Rights and Busi- to discuss our plans for the future. sustainability performance using annual
ness, Oxfam GB, Save the Children and the KPIs on page 49.

1 0 0 GOVER NANCE AND E T HICS
F E E D B A C K F R O M T H E P E O P L E & P L A N E T A D V I S O R Y G R O U P I N F Y1 4
People and Communities
Feedback What we are working on
,.($KDVDVLJQL¿FDQWRSSRUWXQLW\WROHDG :HUHYLVHGWKH3HRSOHDQG&RPPXQLWLHVVHFWLRQRIRXU3HRSOH 3ODQHW3RVLWLYHVWUDWHJ\WRUHÀHFWPRUHVSHFL¿F

on social impact issues, just as it has priorities in four key areas: A better everyday life at work (see page 73), better lives for workers in our supply chain
RQWKHHQYLURQPHQW,.($VKRXOGUHÀHFW (see page 79), supporting human rights (see page 88) and creating lasting change for communities (see page 92).
this in the language and commitments In FY14 we developed additional People & Planet Positive commitments which focus on diversity, community
relating to People and Communities in involvement, children’s rights, supporting migrant and home-based workers and social entrepreneurs, and
the strategy. engaging customers and co-workers in more fundraising campaigns.
Climate Change
All members of the Advisory Group Action and advocacy on climate change are priorities for IKEA and we are working to become climate positive.
agreed that IKEA should prioritise action Without urgent action, the threats climate change poses to people, business success and global prosperity will
on climate change due to the scale of LQFUHDVHVLJQL¿FDQWO\0DQ\FRXQWULHVZHVRXUFHPDWHULDOVDQGSURGXFWVIURPDUHSDUWLFXODUO\YXOQHUDEOHWRFOLPDWH
the challenge for the environment and change, and co-workers and communities are already feeling the effects.
the risks to communities around the $FWLQJRQFOLPDWHFKDQJHZLOOFUHDWHLQQRYDWLRQHFRQRPLFEHQH¿WVDQGEXVLQHVVRSSRUWXQLWLHVIRUDPRUHSURVSHURXV
world. IKEA should use its position as a future. We also want to encourage others to act, so climate change advocacy is one of the priorities in our global public
business leader to call for action from affairs strategy. We are calling for robust policies to unlock the investment needed to accelerate the transition to a
other businesses and governments. low-carbon economy. Read more about our other priorities for advocacy on page 102.
We are engaging with national policy makers and business associations in the countries where we operate, and at EU
level. We are also involved in key international events such as the United Nations Framework Convention on Climate
Change (UNFCCC) Conference of the Parties (COP) meetings and the UN Climate Summit held in New York in September
2014. See page 104.
Human Rights
IKEA works in some places with Respect for human rights is at the centre of everything we do and we have updated our People & Planet Positive
complicated human rights issues (see VWUDWHJ\WREHWWHUUHÀHFWWKLVFRPPLWPHQW
page 88), and as it expands into new Using the UN and International Labor Organisation (ILO) principles as a starting point, we are establishing a consistent
markets, new concerns relating to human position on all human rights risks. We are working to ensure we have the right processes in place to react quickly and
rights will arise. IKEA should plan for responsibly to any human rights issues that arise.
these future scenarios and understand
how best to respond.

F E E D B A C K F R O M T H E P E O P L E & P L A N E T A D V I S O R Y G R O U P I N F Y1 4
Advocacy and leadership
People & Planet Positive gives IKEA the We recognise that as well as taking action in our business we can have a positive impact by advocating for wider
opportunity to stimulate wider change change in society.
by becoming an advocate and thought We are engaging more on social and environmental issues by working individually and in partnership with others.
leader. It should take a stronger stance :HKDYHLGHQWL¿HGFOLPDWHFKDQJHDVDQLPPHGLDWHSULRULW\DQGDUHXUJLQJIRUEROGDFWLRQIURPSROLF\PDNHUVLQWKH
on the issues that matter most to its countries where we operate, and on a global scale (see Public policy, page 102).
business – particularly climate change,
given the increasing momentum of
international climate talks and potential
to drive positive change.
Corporate tax
There is considerable and increasing Our company structure was created to ensure we remain independent and to secure our long-term existence. The
social concern on the subject of IKEA Group pays corporate income taxes in accordance with laws and regulations, wherever we are present as retailer,
corporate tax avoidance. IKEA is manufacturer or in any other role. We have a strong commitment to contribute to the societies where we operate. In
vulnerable to this because its business FY14, the IKEA Group corporate income tax charge amounted to EUR 801 million. The effective corporate income tax
structure can seem complicated. It rate was 19.3%, up from 18.9%. In addition, we incurred local and other taxes such as property taxes, business taxes,
should be aware of public concern over custom duties and environmental taxes. These taxes amounted to EUR 715 million in FY14. So, in total, the tax charge in
tax and engage with the debate in an )<IRUWKH,.($*URXSDPRXQWHGWRPRUHWKDQ(85ELOOLRQ'XULQJWKHODVW¿YH\HDUV)<FRUSRUDWHLQFRPH
open and transparent way. tax and other taxes amounted to about EUR 6.8 billion for the IKEA Group.

Business ethics Public policy

We work hard to make sure the strong can use the IKEA trust line to report a con- We want to useRXUVFDOHDQGLQÀXHQFH mate change, and unlock the business
IKEA culture is felt throughout our busi- cern anonymously. WRKHOSEULQJDERXWVLJQL¿FDQWFKDQJHIRU innovation and investment needed to
ness, wherever we operate around the The trust line, launched in FY13, is WKH EHQH¿W RI SHRSOH DQG WKH SODQHW $Q accelerate the transition to a low-car-
world. The success of our business is built available in 41 countries. It provides co- important way we do this is by taking part bon economy.
on a solid foundation of honesty, respect, workers with the opportunity to raise con- in public policy debates and working with 4. IKEA as a great place to work. We
fairness and integrity. FHUQVFRQ¿GHQWLDOO\LQWKHLURZQODQJXDJH governments and other organisations to support our co-workers’ right to free-
We encourage leadership by example, 24 hours a day, seven days a week, either tackle the big issues that affect our busi- dom of association and promote posi-
and all co-workers must understand and by phone or online. All concerns are evalu- ness and communities. tive and constructive relationships with
comply with our Code of Conduct, ‘Good ated by the trust line managers, and where In FY14, we developed a Corporate trade unions. We also work with our
Business with Common Sense’. This rein- appropriate they are escalated to the re- Communication and Public Affairs Strate- own stakeholders including partners
forces the IKEA Group way of doing busi- sponsible HR or risk manager. See page 76. gic Plan to streamline our public policy and and trade associations of which we are
ness and what we expect of everyone. We advocacy activities which will be rolled out members.
have a zero-tolerance policy for corrup- Anti-corruption IURP)<7KLVLGHQWL¿HVIRXUNH\DUHDVRI
tion, alcohol and drug abuse, and harass- Honesty is an important IKEA value. Cor- action: Advocacy
ment, and we strive to make sure that all ruption in any form is contradictory to our During FY14, we met a number of govern-
our co-workers act in a way that is consist- goal of achieving low prices and being a 1. IKEA’s contribution to investments PHQWRI¿FLDOVDQG0HPEHUVRI3DUOLDPHQW
ent with our values. We give clear guid- good corporate citizen. and growth in society. We explain at the regional, national and local levels.
ance for managers and co-workers on how No one acting on behalf of the IKEA how our growth, expansion and invest- Our main areas of public policy activity re-
to follow up any suspected misconduct. Group may accept or offer bribes, kick- ment plans bring value to society at lated to sustainability were:
Regional or country-level risk manag- backs or loans, or engage in other similar large, including job creation, purchas-
ers regularly conduct risk assessments in corrupt practices. Our Code of Conduct and ing power, sourcing and investments • Climate policy. We want to help drive
relation to co-worker misconduct, and any detailed Rules on Prevention of Corruption in environmental solutions (renewable more proactive climate change poli-
suspected breaches of policies are investi- outline our expectations of co-workers and energy, public transport, etc.). cies, including aggressive decarboni-
gated and dealt with promptly. suppliers, and explain what to do if corrup- 2. Product market requirements. We sation of business. Our Chief Sustain-
We strive to communicate openly and tion or misconduct is suspected. In FY14, are working on product safety, stand- DELOLW\2I¿FHU6WHYH+RZDUGDWWHQGHG
honestly at all times. This is a core foun- 18 crime or corruption incidents were ardisation, chemical requirements, and spoke at the UN Climate Change
dation of our business. Co-workers are submitted via the trust line, of which 15 labelling and communication for con- Conference of Parties (COP19) in War-
encouraged to raise any concerns in good were investigated. Seven of the cases sumers. We advocate for policies to saw, Poland. Steve and Peter Agnefjäll,
faith, and they can expect to be treated examined further were allegations relating support our ambition for healthy, safe our President and CEO, attended the
with respect and fairness. They can dis- to corruption. and sustainable food. UN Climate Summit in New York in
cuss issues with their manager, senior 3. People & Planet Positive. We advo- September 2014 (see page 104). IKEA
management or representatives from the FDWHIRUFKDQJHLQVRFLHW\WKDWEHQH¿WV represented the private sector in the
Human Resources (HR) or Risk teams. If people and the planet. This includes Petersberg Climate Dialogue, host-
none of these feel appropriate, co-workers advocating for policies that tackle cli- ed by the German Chancellor Angela

Merkel, involving representatives from The Climate Group’s Clean Revolution

35 countries that account for 85% of initiative, a partnership of international
global greenhouse gas emissions. We statesmen and governments, business
contributed to the European Commis- leaders and corporations, thinkers and
sion (EC) proposal on energy and cli- opinion formers, calling for a swift,
mate targets for 2030, and sent letters massive scale-up of clean energy and
WR¿YH(XURSHDQ+HDGVRI6WDWHFDOOLQJ infrastructure with smart technologies.
for an early agreement on the climate See page 47 for more on our approach
and energy package. See page 47 for to creating a low carbon economy.
more on our approach to tackling cli- • 5HVRXUFH HI¿FLHQF\ DQG ZDVWH
mate change. policy. We participated in a number of
• Forestry. Around the world, we ad- events and platforms, including Ellen
vocate for effective legislation to con- MacArthur Foundation working groups,
serve forests and prevent illegal log- presenting our objective to turn waste
ging. By partnering with governments, into secondary raw materials. IKEA
regional authorities, NGOs and other also became a member of the Extend-
stakeholders in Australia, China, Eu- ed Producer Responsibility (EPR) Club,
URSH5XVVLDDQGWKH86$ZHDUHLQÀX- which encourages manufacturers to be
encing forestry policies and improving responsible for collecting, reusing and
forest management. For example, we recycling their own products and pack-
worked closely with the EC to support aging. See page 58 for more on our
the introduction of the EU Timber Reg- DSSURDFK WR UHVRXUFH HI¿FLHQF\ DQG
ulation, which came into force in FY13 waste.
and requires companies to ensure all the inclusion of non-listed companies and search bodies, came together to establish
wood entering the EU is from legal These are some examples of how we a stronger focus on the value chain. The ¿YHFRPPRQO\DJUHHGSULRULWLHVIRUHQVXU-
sources. See page 26 for more on our engaged with European policy in FY14: directive was adopted by the EC in Sep- ing product safety and effective market
approach to sourcing wood from more Together with EuroCommerce (an organi- tember 2014, and member states have surveillance.
sustainable sources. sation that represents the retail, wholesale two years to make the necessary updates From FY15, Pia Heidenmark Cook,
• Low-carbon economy. We support- and international trade sectors in Europe), to national legislation. our Head of Sustainability for Retail,
ed proposals for the reform of the EU we contributed to EC consultations on the Other activities included participating will be co-chair - together with a direc-
Emissions Trading Scheme, and con- revision of the eco-design directive and in EU discussions on the safe use of en- tor from the European Commission - of
tributed to consultations on the 2030 energy label. docrine disrupting chemicals, which can the Retailers’ Environment Action Pro-
framework for climate and energy A letter from our Chief Sustainabil- harm humans and wildlife. gramme (REAP), an EU multi-stake-
policy in Europe. IKEA called for bolder LW\2I¿FHU6WHYH+RZDUGWRWKH8.%XVL- We convened a major event on prod- holder initiative exploring sustainable
targets and a bigger push for innova- ness Secretary pledged our support for uct safety in Älmhult, Sweden, in April. production and consumption.
tion and investment in the low-carbon the new European Parliament directive on Around 100 participants, representing
economy. We are a lead partner in QRQ¿QDQFLDO UHSRUWLQJ ,.($ SXVKHG IRU a mix of policy makers, industry and re-

“The role of leaders is to set

visionary targets. We need
bold commitments from policy
makers about the direction we
should move as a society.”
Peter Agnefjäll at the launch of

We Mean Business
“We are a home furnishing company,

but we are also becoming a renew-
able power company. Renewable
energy is common sense energy.
There is no peak sun or peak wind.”
Steve Howard at the launch of RE100

IKEA at Climate Week NYC
and the UN Climate Summit
Nearly half a million people took to Initiative plenary session, and over Climate Week also saw the launch of ported the #Walkthewalk social media
the streets of New York for the People’s the week both Peter and Steve were two global initiatives to encourage the campaign. This gave people around
Climate March on 21 September 2014, involved in many more discussions, move towards a low-carbon future. We the world the chance to get involved
urging world leaders to take action on speeches, and campaign launches. Mean Business is a coalition of global through Facebook, Twitter and IKEA.
climate change at the UN Climate Sum- Later addressing the UN Climate businesses and organisations includ- com. Customers and co-workers could
mit on 23 September. Peter Agnefjäll, Summit, Peter emphasised that busi- ing BSR, CDP, CERES and WBCSD, that post pictures of themselves walking,
our President and CEO, and Steve nesses like IKEA stand behind policy creates a united voice for business to adding the hashtag to join the People’s
Howard, our Chief Sustainability makers who want to see a solution to speak to governments and encour- Climate March virtually.
2I¿FHUZHUHDPRQJWKHPDUFKHUV climate change and that bold, long-term age climate policy. RE100 is a group of ,WZDVWKH¿UVWWLPH,.($KDVHYHU
'XULQJ&OLPDWH:HHN3HWHUUHÀHFW- climate targets are good for business. global corporations including BT, H&M, participated in this kind of global cli-
ed on the march: “It was truly great to He highlighted the importance of en- and Mars, who are working towards mate change campaign, and we plan to
see all the people out on the streets of couraging all parts of society to play a using 100% renewable power. IKEA is a be involved in more of the world’s most
New York. There can be absolutely no role in tackling climate change. Compa- founding partner and active member of important debates on climate change.
doubt what direction they want policy nies like IKEA are in a great position to both these initiatives.
makers and businesses to take.” He spur innovation and renewal. But policy For customers and co-workers who
was speaking at the Clinton Global leadership is crucial to accelerate this. could not make it to New York, we sup-

About our reporting

This sustainability report updates data for water use and carbon emissions by a foundation, which means we do not
stakeholders on the progress IKEA is mak- in our operations and tier 1 suppliers, and have shareholders.
ing in creating positive change for people models and estimations to assess our full This report is an account of our perfor-
and the planet. We are ambitious in our value chain. mance against our People & Planet Posi-
objectives, which means that we may not During FY14, we opened 12 new stores. tive strategy. Key performance indicators
always achieve our goals. We are open IKEA Industry opened one saw mill. Data (KPIs) and content relate to this strategy.
about our challenges and setbacks, as well from these units is included from when When additional information is necessary
as our successes, and listen to feedback they began operation. to give a full account of our sustainability
to help us improve. Sometimes we make performance or to meet the needs of our
mistakes, and when this happens we are 'H¿QLQJWKHUHSRUW¶VFRQWHQW stakeholders, we include content and KPIs
committed to putting things right. The commitments and targets in our Peo- relating to other strategies like the IKEA
The information in this report, unless ple & Planet Positive strategy are based People Strategy.
RWKHUZLVHVWDWHGLVIRUWKH¿QDQFLDO\HDU RQ WKH PRVW VLJQL¿FDQW VXVWDLQDELOLW\ LV-
2014 (FY14) from 1 September 2013 to 31 sues across our value chain, and the areas
August 2014. Data from the IKEA Founda- where we can make the greatest positive
tion applies to the calendar year from 1 GLIIHUHQFH 7KH VWUDWHJ\ GH¿QHV RXU YL-
January 2014 to 31 December 2014. sion for ensuring the long-term success of
The information and data in this report IKEA – how we are making the company
cover all wholly owned companies in the ¿WIRUDVXVWDLQDEOHIXWXUHDQGKRZZHFDQ
IKEA Group, except for our Russian shop- contribute to accelerating that change in
ping centre organisation which is excluded society.
due to lack of internal reporting systems We have sought input to the strategy
to gather this information. We are taking from our key stakeholders to ensure that
action to be able to include data from the its focus and commitments are as close
Russian shopping centre organisation in to their expectations as possible (see
our future reporting. Data for IKEA stores page 99).
operated by franchisees outside the IKEA The document is designed primarily for
Group is not reported. Any other exclu- our partners, customers, NGOs and other
sions are stated in the text. In some cas- stakeholders who want a detailed account
es, data has been estimated and this has of our approach and performance relat-
been indicated in the text. ing to our sustainability strategy. We also
Our value chain approach means that produce a version for our co-workers. The
we take account of all impacts where we IKEA Group of companies (INGKA Holding
can make a difference. We use reported B.V. and its controlled entities) are owned

1 0 6 GOVER NANCE AND E T HICS GRI and the UN Global Compact
We use the Global Reporting Initiative
(GRI) guidelines on sustainability report-
U N G L O B A L C O M P A C T R E F E R E N C E TA B L E ing to inform our reporting. We welcome
the GRI’s G4 focus on materiality and re-
porting of impacts across the value chain,
Location in FY14 Report
We align with this approach by focusing
Human rights our reporting on our People & Planet Posi-
Principle 1 Businesses should support and respect the protection Supporting human rights, page 88 tive strategy, which covers our material
of internationally proclaimed human rights; and impacts across the value chain.
Principle 2 make sure that they are not complicit in human rights Supporting human rights, page 88 IKEA is a signatory to the United
abuses. Better lives for workers, page 79
Nations Global Compact, a set of 10
Labour principles in the areas of human rights,
Principle 3 Businesses should uphold the freedom of association A better everyday life at work, page 73 labour, environment and anti-corruption.
and the effective recognition of the right to collective Supporting human rights, page 88 The UN Global Compact Reference Table
bargaining; Better lives for workers, page 79
(left) shows where we report our progress
Principle 4 the elimination of all forms of forced and compulsory Supporting human rights, page 88 regarding the 10 principles.
labour; Better lives for workers, page 79
Principle 5 the effective abolition of child labour; and Responsible sourcing, page 25
Supporting human rights, page 88
Better lives for workers, page 79
A better everyday life at work, page 73
Principle 6 the elimination of discrimination in respect of A better everyday life at work, page 73
employment and occupation. Supporting human rights, page 88
Better lives for workers, page 79
Environment
Principle 7 Businesses should support a precautionary approach Resource and energy independence, page 23
to environmental challenges;
Principle 8 undertake initiatives to promote greater environmental A more sustainable life at home, page 11
responsibility; and Resource and energy independence, page 23
Principle 9 encourage the development and diffusion of A more sustainable life at home, page 11
environmentally friendly technologies. Resource and energy independence, page 23
Anti-corruption
Principle 10 Businesses should work against corruption in all its Business ethics, page 96
forms, including extortion and bribery.

1 0 7
Performance
against targets
Enabling change
COMMITMENTS GOALS FY13 FY14
Transforming our business and moving towards being By August 2017, 95% of IKEA co-workers state that “sustainability is a natural 70% 79% 1
people and planet positive by making sustainability a part of the everyday work”
natural part of our everyday work.
By August 2017, at least 95% of co-workers view IKEA as a company that takes 82% 2
83% 3
social and environmental responsibility

By August 2015, 70% of customers view IKEA as a company that takes social 41% 4
41% 5
and environmental responsibility

By August 2017, at least 95% of our suppliers view IKEA as a company that 89% N/A 6
takes social and environmental responsibility
A more sustainable life at home

Take the lead in developing and promoting products We will achieve more than a fourfold increase (from FY13 levels) in sales EUR 641 million EUR 1,015 million
and solutions that inspire and enable people to live a from products and solutions inspiring and enabling customers to live a more
more sustainable life at home sustainable life at home by August 2020
2XUHQHUJ\FRQVXPLQJSURGXFWVZLOOEHRQDYHUDJHDWOHDVWPRUHHI¿FLHQW 41% 50% 7
than our range was in 2008 by August 2015

%\6HSWHPEHUDOORXUHOHFWULFKREVZLOOEHHQHUJ\HI¿FLHQWLQGXFWLRQKREV 43% 55%
By September 2015, our entire lighting range will switch to LED offered at the 51% 75% 8
lowest price
%\6HSWHPEHURIIHUWKHPRVWHQHUJ\HI¿FLHQWKRPHDSSOLDQFHVDWWKH A to A++ offered in N/A 9
lowest price all categories
Results are based on the VOICE survey of 87,644 co-workers. Results are not directly comparable between years as different parts of IKEA and different numbers of people participate, and in FY14 we also updated the VOICE questions.
1, 3
2
FY13 - Data based on 82,488 participants of our VOICE survey. Not directly comparable with FY12 as different parts of IKEA participate in VOICE each year. 4 FY13 - Based on response to Brand Capital survey. Calculated as average between two
questions “IKEA takes responsibility for the environment” and “IKEA takes responsibility for the community” 5 FY14 - Based on response to new question in Brand Capital survey. IKEA “is committed to operating in a way that is better for society
and the environment” 6 This information is collected every two years so is not available for FY14. 77KLVVFRUHUHÀHFWVRXUSURJUHVVRQHQHUJ\HI¿FLHQF\7KHUHDUHVRPHXQFHUWDLQWLHVLQRXUFDOFXODWLRQPHWKRGRORJ\DQGZHDUHUHYLHZLQJWKLVVR
that we can implement a new approach from FY15. 8 75% of all lighting products sold were LED or were compatible with LED bulbs (e.g. lamps which customers can use with an LED bulb). 9 We are adjusting the methodology for measuring energy
HI¿FLHQF\RIKRPHDSSOLDQFHVVRWKHUHLVQR¿JXUHUHSRUWHGIRU)<

Resource and energy independence

Strive for resource independence; securing long- By August 2015, all cotton used in IKEA products will be sourced from more 72% 76%
term access to sustainable raw materials, ensuring a VXVWDLQDEOHVRXUFHVDQGZHZLOOFRQWLQXRXVO\LQYHVWLJDWHFRPSOHPHQWDU\¿EUHV
positive impact on the communities where we source with improved sustainability performance relative to cotton
and using resources within the limits of the planet.
By August 2017, at least 50% of our wood will come from more sustainable 32% 41%
sources
By December 2015 all palm oil, currently used in home furnishing products such - 32%
DVFDQGOHVRUDVDIRRGLQJUHGLHQWZLOOHLWKHUFRPHIURPFHUWL¿HGVHJUHJDWHG
sustainable sources or be replaced by more sustainable raw materials
By August 2020, 90% of the total sales value will come from home furnishing 39% 52%
Take a lead in turning waste into resources. We will By August 2015, all our main home furnishing materials, including packaging, 98% 98%
GHYHORSUHYHUVHPDWHULDOÀRZVIRUZDVWHPDWHULDO will be either made from renewable, recyclable (on at least one market on an
ensure key parts of our range are easily recycled, and industrial scale) or recycled materials
take a stand for a closed loop society.
By August 2020, 90% of the waste from our own operation will be recycled 88% 1
89%
or energy recovered, of which 80% of the waste from stores and distribution
(Stores: 77% material
centres and 90% from IKEA Industry Group will be material recycled recycled, Distribution
centres: 81% material
recycled, IKEA Industry:
66% material recycled)
Be energy independent by being a leader in renewable By August 2015, produce renewable energy equivalent to at least 70% of our 37% 42%
HQHUJ\DQGEHFRPLQJPRUHHQHUJ\HI¿FLHQW energy consumption and by August 2020, on Group level, we will produce as
throughout our operations. Strive towards energy much renewable energy as we consume
independence in the supply chain.
%HFRPHPRUHHQHUJ\HI¿FLHQWLQRXURZQRSHUDWLRQVE\$XJXVWDQG 8% in stores 15% in stores
30% by August 2020, compared to FY10 2
(QFRXUDJHDQGHQDEOHRXUGLUHFWVXSSOLHUVWREHFRPHPRUHHQHUJ\HI¿FLHQW 10.9% 19%
by August 2017, compared to FY12 2
By August 2015, reduce carbon emissions from our own operations by 50%, 19% 24%
compared to FY10 3
By August 2015, reduce carbon emissions of our suppliers by 20%, compared 0% 4 11%
to FY12 3
By August 2016, reduce carbon emissions from the transport of goods by 20% 11% 13%
compared to FY11, and by 30% compared to FY12 by August 2020 4
1
Breakdown for FY13 not available as data for material recycling was not collected separately. Figures restated from FY13 due to changes in the methodology used in Division Board, and the integration of Division Board and Divisions Flatline
and Solid wood (formerly Swedspan and Swedwood). 2 In relative terms, measured by energy consumed/m3 products sold or goods purchased. 3 In relative terms, measured by CO2 /m3 products sold or goods purchased. 4 In relative terms,
measured by CO2 /m3 goods transported. 45HVWDWHGIURP)<GXHWR¿QHWXQLQJRIFDOFXODWLRQV

Better life for people and communities

Be a great place to work for our co-workers. Ensure every co-worker has an agreed, individual development plan 71% 1
By 2020 50% of managers will be women 47% 47%

By 2020 achieve a Leadership Index result of 75 in our VOICE survey 74 73
By FY20 achieve an index of 725 in our VOICE survey 711 704
Contribute to better lives for workers by supporting Maintain the social and environmental improvements reached through the 99% 98.6%
decent work throughout our supply chain. 100% IWAY approval of all suppliers of home furnishing and other key
products and services 2
By August 2015, expand the reach of our supplier Code of Conduct by Local IKEA Food Local IKEA Food
securing IWAY approval at all local IKEA Food, Indirect Material and suppliers: 27% suppliers: 29%
Services (IMS) and retail suppliers within the scope of IWAY 3 IMS suppliers: 53% IMS suppliers: 77%
Retail suppliers: 19% Retail suppliers: 40%
By August 2017, go further into our supply chain by securing compliance to 20% 91%
IWAY Musts at all sub- suppliers of critical materials and processes 4
1
Of the 87,644 co-workers who completed the VOICE survey and answered positively to: “Have you within the past twelve months together with your manager agreed on a development plan for the coming year?” This question is new and
not comparable with previous years. 2 'DWDIRUKRPHIXUQLVKLQJVXSSOLHUVLQFOXGHV,.($,QGXVWU\IDFWRULHV([FOXGHVQHZVXSSOLHUVWKDWKDYHXSWRPRQWKVWREHDSSURYHG6XSSOLHUVZKHUHDQRQFRPSOLDQFHKDVEHHQLGHQWL¿HGDQGDUH
within the 90-day period allowed to correct the non-compliance are categorised as approved. Suppliers pending a scheduled audit are categorised as approved (applies to 0.5% of the total in FY14). In FY14, the remaining 1.4% applies to
suppliers being phased out. In China we are working with suppliers to reduce working hours to comply with working hour limits. As an interim step, suppliers can become IWAY approved if working hours do not exceed 60 hours a week
including overtime. 3 For the retail operations, the current IWAY focus is on cleaning, home delivery, security and waste management suppliers. 4 IWAY Musts are the immediate requirements that IKEA suppliers must meet before a
contract can be signed. IWAY Musts are the immediate requirements that IKEA suppliers must meet before a contract can be signed.

Read the IKEA Group People & Planet IKEA
Yearly Summary Positive Foundation
Find out what happened at IKEA in FY14 Visit the People & Planet Positive Discover what the IKEA Foundation is
— get facts, hear stories and see where section of IKEA.com doing to improve the lives of children
we’re headed in the future. around the world.
© Inter IKEA Systems B.V. 2014

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06. A MESSAGE FROM PE TER

08. THE YE AR IN BR IEF

PAGE 11 Read about how 0 9. T H E I K E A P E O P L E & P L A N E T P O S I T I V E S T R AT E G Y

92. L A S T ING C H A NG ES FOR COMMUNI T IES

9 6 GOVER NANCE AND E T HICS

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The IKEA Group has

FY04 FY13 FY14

Total sales increased by 5.9% in

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100% Forest Stewardship

The IKEA Catalogue is now the largest

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41% of wood from

Over ¾ of cotton 100% IWAY approved EUR 104 million

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To be the leader in life at home

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IKEA Group Sustainability

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people visit our stores every year, COMPARED TO

REDUCING WASTE €500

Space-saving solutions Food storage containers help cut food waste,

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solutions products and solutions that inspire and

Our energy-consuming products will be, Energy-consuming products are on aver-

PEOPLE & PL ANET NEW targets

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ENERGY-EFFICIENT PRODUCTS FY13 FY14

solar panels - purchased and installed in Energy

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We’ll be doinJ more

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know it will have

expand sales to other locations.

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Encouraging the switch

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* Compared with EU standard taps without an aerator.

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Waste away 290 million* fewer batteries as a

* Calculations are based on all batteries being recharged 500 times.

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Walking the talk with a

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Our Contact Centre co-workers worked Chris Messer

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Resource and energy

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IKEA GROUP STORES

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