THE TRIPLE BOTTOM LINE OF IKEA

The Triple Bottom Line (TBL or 3BL) was first coined by John Elkington in
1994, who proposed that companies produce three bottom-line reports;
People, Profit, and Planet. Elkington’s reasons for proposing TBL were not
just to suggest a new accounting framework but to call into question the
pillars of capitalism and its future place in the world. He believes that while
many CEO’s, CFO’s and leaders will move heaven and earth to ensure that
they hit their profit targets, the same is very rarely true of their people and
planet targets.

We believe the triple bottom line is still important and relevant today,
IF, it is used as a tool to make a real meaningful change in the world.
As it demands we focus on improving impacts on People and Planet,
not just Profit. In reality using TBL or ESG (Environmental, Social,
Governance) means there is always going to be a balancing act of
sorts, and adopting a trade-off mentality when it comes to setting
strategy and making decisions.
IKEA
IKEA, a renowned Swedish furniture company, has also started to use
the Triple Bottom Line. The company published its goals for 2030
focusing on three main areas under what it called “planet and people
positive” when where: healthy and sustainable living, circular and
climate positive, and fair and equal. This is an example of a business
that can make a big impact if it can reach its goals as it currently
uses1% of the global production of woods and cotton. Here are some
ways in which are planning to make a change in each area of TBL :
Planet

 In 2016 Ikea started to recycle waste material using old

materials to make new top-selling products, the business to
date has achieved 60% renewable materials and 10% recycled
materials.

 The company pledged to use 100% renewable or recyclable

materials by 2030, investing in Morssinkhof Cytoplast, a plastic
recycling plant in the Netherlands in 2017 to help them reach
this goal.

 Launched a buy-back scheme for their old products to help

them on their journey to becoming a circular business and
eliminate waste.

 Invested in R&D in partnership with H&M to develop a new

textile fiber based on cellulose from wood that we call
Tripotential. The aim is to complement or replace, both cotton
and oil-based fabrics like nylon or polyester.

 Ikea has set a goal to be powered by 100% clean energy and

has started to invest in solar panel installation on its
warehouses.
 They also aim to transition their delivery fleet to 100% zero
emissions by 2025 and have already started to invest in an
electric vehicle roll-out plan.

 Aim to prolong the life of its products and send zero waste to
landfills via their buyback scheme and offering product life
extension such as selling extra covers for their KLIPPAN sofa to
promote simply buying new covers instead of a new sofa. It
does need to be said that Ikea’s business model is still based on
low-cost - high-volume sales, so it will be interesting how they
meet this challenge of product life extension when the
temptation to purchase a new low-cost item instead of
repairing an old one is still so appealing.

 100% commitment to sustainable cotton and since September

1, 2015, the company claims that all the cotton used for IKEA
products comes from more sustainable sources.
People

 Aim to inspire 1 billion people to live healthier sustainable lives

within the boundaries of the planet, which they aim to do via
the product range they offer.

 Ensuring international labor standards are met for all its

workers through its supply chain both direct and indirect,
implementing IWAY standard 6 in September 2020.

 The IKEA Foundation is a philanthropic organization that

provides grants for programs that help families living in poverty
afford a better everyday life, and fight and cope with climate
change.
Profit

Ikea’s annual revenue was 36.9 billion Euros in 2020, In 2021's

financial year, IKEA's global gross profit was approximately $13.6
billion, an 11.73% increase from the previous year. As of 2021, IKEA
remains one of the most valuable furniture retailer brands globally,
valued at approximately $18 billion. while revenue has previously
been the top priority for Ikea shifts in its investments and use of the
company profits is starting to show its commitment to the other two
bottom lines in People and Planet, such as its reinvested those
profits into waste materials recycling in 2016, increased investment
in R&D to find more sustainable materials and its investment into
renewable energy and transitioning its fleet to 100% electric.