A Case-Study on

"Sustainable Strategies: A Case Study of IKEA's Corporate Sustainability Initiatives"

Submitted by: Zunaira Fatima

Submitted to: Sir

22/02/2024
Contents
Introduction: Corporate Sustainability at IKEA:...........................................................................................3
Objectives:...............................................................................................................................................4
Corporate Sustainability:.............................................................................................................................5
Current Situation of IKEA in Corporate Sustainability:.................................................................................6
Sustainable Operations and Supply Chain Management:........................................................................7
Social Responsibility and Community Engagement:................................................................................7
Transparency and Governance:...............................................................................................................7
Innovative Product Design and Technology Integration:.........................................................................8
Technology and Digitalization:.................................................................................................................8
Stakeholder Engagement and Collaboration:..........................................................................................9
Challenges:............................................................................................................................................10
Marketing Strategies for Sustainability:................................................................................................11
Key Recommendations and Future Strategic Option:................................................................................11
Strengthening Supply Chain Sustainability............................................................................................11
Investing in Renewable Energy:.............................................................................................................11
Promoting Circular Economy Principles:................................................................................................12
Enhancing Stakeholder Engagement:....................................................................................................12
Embracing Digital Innovation:................................................................................................................12
Future Strategic Option: Implementing a Closed-Loop Supply Chain:...................................................13
Conclusion:................................................................................................................................................13
References:................................................................................................................................................14
 Analyzing IKEA's Corporate Sustainability Practices and
Proposing Strategic Recommendations

Introduction: Corporate Sustainability at IKEA:

In the contemporary worldwide business scene, the basis for associations to embrace

sustainability has become progressively articulated. This is especially pertinent for worldwide

enterprises like IKEA, which work for a monstrous scope and have critical natural and social

impressions. Corporate manageability involves coordinating financial, social, and ecological

consideration into business tasks, intending to make long-term an incentive for all partners

while limiting adverse consequences in the world (Dyllick and Hockerts, 2002.IKEA, as one of

the world's biggest furniture retailers, faces unique difficulties and open doors in its

supportability process.

The significance of corporate manageability for IKEA lies in its obligation to limit natural

effects, advance social value, and guarantee long-term business practicality. As an organization

that works in the north of 50 nations and serves a large number of clients around the world,

IKEA impacts worldwide stockpile chains, resource consumption, and waste age. In this way, its

way of dealing with manageability mirrors its qualities and standards as well as has extensive

ramifications for the planet and society at large (Moon, 2002).

IKEA's supportability endeavors envelop different parts of its activities, including economical

obtaining of materials, energy-effective assembling processes, squandering decrease, and local

area commitment programs. The organization has defined aggressive maintainability objectives,

for example, accomplishing 100 percent environmentally friendly power utilization and
guaranteeing no loss to landfill by 2030 (IKEA, 2023). These drives line up with IKEA's

qualities as well as add to cost decrease, brand separation, and chance alleviation.

Notwithstanding, IKEA additionally faces difficulties in its manageability process, including

accommodating the interests of different partners, tending to reactions concerning work

rehearses, and guaranteeing the sturdiness and recyclability of its items. In addition, outside

administrative bodies, industry guidelines, and public examination impact IKEA's

maintainability arrangements and practices. In this manner, the organization should explore a

perplexing scene of contending needs, administrative prerequisites, and partner assumptions.

Notwithstanding these difficulties, IKEA stays resolved to its maintainability plan and proceeds

to advance and work on its practices. By putting resources into innovative work, fortifying

associations with providers and partners, and upgrading straightforwardness and responsibility,

IKEA means to advance its manageability objectives and show others how it's done in the retail

business. Eventually, corporate maintainability at IKEA isn't simply an ethical objective but

additionally an essential need for long-term business achievement and societal effect.

Objectives:

1. To analyze the significance of corporate sustainability within the context of IKEA's operations

and its relevance in the global business landscape.

2. To review key literature and research on corporate sustainability, including models and

theories, and assess their applicability to IKEA's sustainability initiatives.

3. To conduct a comprehensive analysis of IKEA's current sustainability practices, including its

environmental, social, and economic impacts, as well as its engagement with stakeholders and

compliance with regulatory standards.

4. To identify challenges and opportunities faced by IKEA in its sustainability journey and

evaluate the effectiveness of its strategies in addressing them.

5. To provide strategic recommendations for IKEA to enhance its sustainability performance and

present one of these recommendations as a future strategic option for the company.

Corporate Sustainability:

Corporate sustainability, otherwise called corporate social obligation (CSR) or corporate

obligation (CR), has accumulated expanding consideration as organizations perceive the

significance of incorporating natural, social, and administration (ESG) factors into their

activities (Elkington, 1997). This extensive way to deal with business incorporates ecological

stewardship, social value, and monetary thriving, planning to make the long-term an incentive

for all partners (Doorman and Kramer, 2006). Different structures and models have been created

to direct corporate supportability endeavors, for example, the Triple Primary concern, which

underscores the interconnectedness of natural, social, and financial execution (Elkington, 1997).

Moreover, the Unified Countries Supportable Improvement Objectives (SDGs) give a worldwide

system to organizations to adjust their maintainability methodologies to more extensive cultural

goals (Joined Countries, 2015).

As of late, there has been a flood in examination and writing on corporate maintainability,

reflecting developing interest and consciousness of manageability issues among scholastics,

specialists, and policymakers (Crane et al., 2008). This body of work explores topics ranging

from sustainable business models and supply chain management to corporate governance and

stakeholder engagement. Insights from this literature inform companies' sustainability strategies
and initiatives, helping them address emerging challenges and capitalize on opportunities for

sustainable growth (Crane et al., 2008).

Amid increasing societal and environmental challenges, companies across various industries are

recognizing the strategic importance of corporate sustainability (Schaltegger et al., 2016).

Integrating sustainability into business operations can enhance brand reputation, attract

investors, and drive innovation while mitigating risks associated with environmental degradation

and social unrest (Porter & Kramer, 2006). As a result, corporate sustainability has become a

key driver of competitive advantage and long-term profitability for businesses worldwide

(Schaltegger et al., 2016).

IKEA, as a worldwide forerunner in the retail business, has been at the cutting edge of corporate

manageability endeavors. The company has implemented initiatives to reduce carbon emissions,

promote sustainable sourcing, and engage with stakeholders on environmental and social issues

(IKEA, 2021). By aligning its business strategy with sustainability principles, IKEA aims to

create value for customers, employees, and communities while minimizing its environmental

footprint (IKEA, 2021). However, as consumer expectations and regulatory requirements

evolve, IKEA faces ongoing challenges and opportunities in advancing its sustainability agenda

(Schaltegger et al., 2016)

Current Situation of IKEA in Corporate Sustainability:

IKEA stands as a paradigm of corporate sustainability, having integrated environmental and

social considerations deeply into its business operations.

Sustainable Operations and Supply Chain Management:

The company has made significant strides in various aspects of sustainability, spanning its

entire value chain. From sustainable sourcing of materials to energy-efficient manufacturing

processes and innovative product designs, IKEA has demonstrated a steadfast commitment to

reducing its environmental footprint (IKEA, 2023).Moreover, IKEA's sustainability initiatives

extend beyond its own operations to include efforts to engage and empower its suppliers and

customers.

The company has established stringent sustainability standards for its suppliers, ensuring that

they adhere to ethical labor practices and environmental regulations (IKEA, 2021. Additionally,

IKEA's sustainability-focused product offerings, such as energy-efficient appliances and eco-

friendly furniture, enable customers to make more sustainable choices in their everyday lives.

Social Responsibility and Community Engagement:

IKEA has also been proactive in addressing social issues within its supply chain and broader

community. The company has implemented programs to promote gender equality, diversity, and

inclusion both within its workforce and among its suppliers (IKEA, 2022). Furthermore, IKEA

has undertaken initiatives to support local communities through investments in education,

healthcare, and affordable housing, demonstrating its commitment to social responsibility.

Transparency and Governance:

As far as transparency and governance, IKEA has been straightforward about its supportability

objectives, progress, and difficulties. The organization consistently distributes maintainability

reports enumerating its natural and social exhibition, permitting partners to keep tabs on its

development and consider it responsible (IKEA, 2021). Besides, IKEA has drawn in outer
partners, including NGOs, legislatures, and industry peers, to team up on supportability drives

and drive aggregate activity.

Innovative Product Design and Technology Integration:

IKEA's obligation to corporate supportability is likewise clear in its way to deal with item

development and plan. The organization has progressively centered on making items that are

stylishly satisfying and useful as well as harmless to the ecosystem and socially capable. For

example, IKEA has put resources into the improvement of practical materials, like bamboo,

reused plastics, and natural cotton, to lessen the ecological effect of its items (IKEA, 2021).

Furthermore, IKEA has embraced the standards of round economy by planning items for life

span, reparability, and recyclability, in this way limiting waste and advancing asset effectiveness

(Kirchherr et al., 2017)

Technology and Digitalization:

IKEA has leveraged technology and digitalization to enhance its sustainability efforts and

engage with customers in new ways. The company has launched initiatives such as the IKEA

Sustainable Living App, which provides customers with tips and tools for living more

sustainably at home (IKEA, 2022). Also, IKEA has put resources into sustainable power

arrangements, for example, sunlight-based chargers and wind ranches, to decrease its

dependence on petroleum products and moderate environmental change (IKEA, 2023).

 Figure 1

Stakeholder Engagement and Collaboration:

As far as partner commitment, IKEA has found a way proactive ways to include its

representatives, clients, and networks in its maintainability drives. The organization has laid out

representative commitment programs, for example, manageability preparing and volunteer open

doors, to enable its labor force to add to its maintainability objectives (IKEA, 2022). Similarly,

IKEA has launched customer-facing campaigns and events to raise awareness about

sustainability issues and encourage sustainable behaviors (IKEA, 2021). Moreover, IKEA has

collaborated with local communities and NGOs to address social and environmental challenges,

such as deforestation and waste management, in the regions where it operates (IKEA, 2020).
 Figure 2

Challenges:

Despite its progress, IKEA continues to face challenges and criticism in its sustainability

journey. One key test is the intricacy of its worldwide store network, which traverses various

nations and includes various providers and accomplices. Managing sustainability across vast

network requires robust systems and processes to ensure compliance with environmental and

social standards (Hervé et al., 2016). Additionally, IKEA faces pressure from consumers,

investors, and regulators to demonstrate tangible progress and results in its sustainability efforts,

necessitating ongoing monitoring and reporting (Fernando et al., 2020).

IKEA's current situation in corporate sustainability reflects a comprehensive and multifaceted

approach to addressing environmental, social, and governance challenges. Through its

commitment to innovation, collaboration, and transparency, IKEA continues to make strides

towards its sustainability goals while navigating the complexities of the global business

landscape.
Marketing Strategies for Sustainability:

IKEA coordinates maintainability into its showcasing procedures by featuring eco-

accommodating items, advancing supportable living practices, and conveying its supportability

drives to buyers. Through publicizing efforts, in-store shows, and computerized content, IKEA

teaches and motivates clients to make more manageable decisions in their buying choices. By

adjusting showcasing endeavors to its supportability objectives, IKEA builds up its obligation to

natural and social obligation while improving brand notoriety and client faithfulness.

Key Recommendations and Future Strategic Option:

Strengthening Supply Chain Sustainability:

IKEA should enhance its efforts to ensure sustainability throughout its supply chain by

implementing rigorous environmental and social standards for suppliers, conducting regular

audits, and providing support for capacity building and improvement initiatives. Collaborating

with suppliers to identify and address sustainability challenges, such as deforestation, carbon

emissions, and ethical labor practices, will be crucial in achieving supply chain transparency and

accountability (Hervé et al., 2016).

Investing in Renewable Energy:

To further reduce its carbon footprint and dependence on fossil fuels, IKEA should accelerate its

investments in renewable energy sources, such as solar and wind power, for its operations

globally. By transitioning to renewable energy, IKEA can not only mitigate its environmental

impact but also reduce energy costs and enhance energy security (IKEA, 2023).
Promoting Circular Economy Principles:

IKEA should continue to prioritize circular economy principles in its product design and

business model, focusing on extending product lifespan, promoting repair and reuse, and

maximizing material efficiency. By adopting a circular approach, IKEA can minimize waste,

conserve resources, and create value from end-of-life products (Kirchherr et al., 2017). This

could involve initiatives such as offering repair services, facilitating product take-back schemes,

and exploring innovative recycling technologies.

Enhancing Stakeholder Engagement:

IKEA ought to develop its commitment to its partners, including representatives, clients,

providers, and neighborhood networks, to cultivate collaboration and co-making of sustainable

solution. This can be achieved through initiatives such as sustainability education programs,

customer feedback mechanisms, and community partnership projects. By involving stakeholders

in decision-making processes and listening to their input, IKEA can build trust, loyalty, and

support for its sustainability initiatives (IKEA, 2022).

Embracing Digital Innovation:

Leveraging digital technologies and innovation, IKEA should develop innovative solutions to

enhance sustainability across its operations and customer experience. This may include digital

tools for product traceability, online platforms for sharing sustainability best practices, and

virtual reality experiences to instruct and inspire customers about sustainable living. By

harnessing the power of digitalization, IKEA can drive efficiency, transparency, and engagement

in its sustainability efforts (Fernando et al., 2020).

Future Strategic Option: Implementing a Closed-Loop Supply Chain:

As a future strategic option, IKEA should transition towards a closed-loop supply chain model,

where products are designed, produced, used, and recycled in a continuous cycle. By closing the

loop, IKEA can minimize resource extraction, reduce waste generation, and create a more

sustainable and resilient business model. This strategic shift would require investments in

reverse logistics infrastructure, partnerships with recycling facilities, and collaboration with

suppliers and customers to design products for recyclability and circularity. Embracing a closed-

loop approach would not only align with IKEA's sustainability goals but also drive innovation,

cost savings, and competitive advantage in the long term.

Conclusion:

In conclusion, the assessment of IKEA's corporate sustainability initiative highlights the

organization's obligation to coordinating natural, social, and monetary contemplations into its

tasks. Through sustainable supply chain management, investments in renewable energy,

promotion of circular economy principles, stakeholder engagement, and digital innovation,

IKEA has demonstrated leadership in sustainable business practices. Moving forward, IKEA has

the opportunity to further strengthen its sustainability efforts by implementing key

recommendations, such as enhancing inventing chain transparency, accelerating renewable

energy investments, and embracing a closed-loop supply chain model. By continuing to

prioritize sustainability, IKEA can not only mitigate its environmental impact yet in addition

make long haul an incentive for partners and add to a more manageable future. Thus, IKEA's

journey towards corporate sustainability serves as a beacon of inspiration for businesses

worldwide, highlighting the importance of integrating sustainability into core business strategies

and operations.
References: