IKEA

Carbon per million dollars of revenue. The legacy industry-standard reference (CDP, MSCI). Useful for cross-sector context, but distorted by margin — high-margin firms appear artificially efficient. Read alongside the operational and asset intensities for the full picture.

OpEx (operating expenditure) is the running cost of the business — staff, services, energy, materials. This shows how carbon-intensive operations are per million dollars of spend. Removes the margin distortion that revenue-based ratios introduce.

EVIC (Enterprise Value Including Cash) is the firm's total capital footprint — equity + debt + cash + minority interest. The EU's standard intensity measure (SFDR PAI 3) — answers: how much carbon does each million of capital deployed in this business produce?

PP&E (Property, Plant & Equipment) plus leased real-estate assets is the firm's physical infrastructure on the balance sheet. This shows the carbon intensity of that physical footprint — uses Scope 1+2+3 for consistency with the other headline intensities. Surfaces stranded-asset risk for asset-heavy firms.

IKEA expanded its renewable electricity programme for suppliers to 14 new countries in FY25, making it available in 27 countries total. The supplier code of conduct (IWAY) requires suppliers to at minimum identify options for switching to renewable energy. IKEA targets increasing renewable energy in own operations and is scaling electrification, renewable fuels and energy efficiency across upstream manufacturing and transportation.

The revised IKEA Sustainability Strategy explicitly includes increasing carbon removals and storage as a key component of the climate objective, alongside emissions reductions. The acquisition of approximately 8,000 hectares of forest land in Latvia also contributes to responsible forest management and carbon storage within the IKEA value chain.

• Emissions reduction in line with 1.5°C pathway across IKEA value chain

  Inter IKEA Group's revised sustainability strategy sets a climate objective to limit the impact of the IKEA value chain on global warming by reducing emissions in line with a 1.5°C pathway. This objective is formalised under the OKR methodology with 2030 key results. The strategy also includes increasing carbon removals and storage, and contributing to broader societal climate change mitigation and adaptation efforts.

• Circular design and sustainable manufacturing to reduce material footprint

  Inter IKEA Group is transitioning towards a circular business by applying circular design principles and offering products and services enabling reuse, repair, refurbishment and recycling. In FY25, IKEA Components replaced plastic fitting bags with paper-based alternatives produced using paper from production waste, targeting complete phase-out of plastic consumer packaging by 2028. Alternative designs for mattresses and sofas using renewable and recycled foam content proved successful, with a pilot pocket spring mattress using majority recycled components being set up in Europe.

• Wood-based manufacturing energy & electrification

  IKEA Industry manufactures ~10% of total IKEA range, with focus on wood-based furniture. Drying and pressing processes in particle board and HDF board manufacturing are energy and pollutant intensive. Strategy is to scale up electrification, renewable energy and energy efficiency across own manufacturing sites. Four IKEA Industry sites emit air pollutants above EU Industrial Emissions Portal thresholds (FY25 total: 2,652 tonnes).

• Circular design to cut end-of-life emissions

  Circular Design Principles applied to make products reusable, repairable, refurbishable, recyclable. Examples: VÅLFJÄLLET mattress with separable parts for recycling; replacement of single-use plastic packaging for fitting bags and duvets with paper-based packaging by 2028. Target: 90% circular fulfilment score by 2030.

• Plastic-to-paper packaging transition

  Since 2020, IKEA has been working to eliminate plastic from its packaging. Following successful tests with TUSSÖY mattress toppers in paper packaging, the company is extending paper packaging solutions to other categories. Fitting bag packaging is being transitioned from plastic to paper across products including BRUKSVARA, BRIMNES, IVAR, NYSJÖN and METOD.

• Bio-based glue substitution to cut fossil-based adhesive use by 40%

  Finding new glue solutions is one of the main approaches to reducing the IKEA climate footprint, as most glue consumption is used in board production. IKEA is switching to bio-based alternatives to reduce fossil-based glue usage by 40%, with a goal to have most board-producing factories using lower-climate-footprint glues by FY30. The first IKEA Industry factory in Kazlu Ruda, Lithuania is already using a glue system made of technical starch from corn in large-scale production, with multiple parallel trials of other glue systems underway.

• Manufacturing and production energy efficiency improvement

  The Group is constantly looking for new ways to make production more sustainable and energy-efficient across its 33 production units. Almost two-thirds of the IKEA climate footprint is directly connected to the supply chain, including production at suppliers. Investments were made in FY23 in extending or improving existing production units, and a new distribution centre in South China was taken into operation.

• Responsible forest management and wood supply governance via forest acquisition

  In FY25, the Group acquired two companies in Latvia comprising ~8,000 hectares of forest land to govern part of its wood supply in the Baltics and develop new methods for responsible forest management within the IKEA value chain. This is a supply-chain lever addressing upstream raw material sustainability, particularly for IKEA Industry's wood-based furniture production which accounts for ~10% of the total IKEA range.

• Supplier sustainability via IWAY code of conduct

  The Group enforces environmental and social conditions across its supply chain through IWAY, its supplier code of conduct, which has been regularly updated since 2000 to address emerging social and environmental risks. Verification activities range from gap assessments for new suppliers to full audits for existing suppliers, with business relationships terminated for persistent non-compliance. Approximately 90% of IKEA products are sourced from external suppliers, making supply chain decarbonisation a critical lever.

• Purchased goods / raw material sourcing emissions

  ~90% of IKEA range is sourced from external suppliers. Raw material sourcing and product manufacturing is the largest upstream emission source. Strategy: increase share of materials with lower climate footprint (e.g. TAGGHAJ with 70% recycled aluminum, DVÄRGSTUBB with 50% recycled glass, FRAKTA bag with 90% recycled material). Material Directions roadmaps target 90% recycled and renewable content by 2030 across home furnishing range.

• Inbound and outbound transport decarbonisation

  Land transport electrification expanded to fleets across six new countries in FY25. Increased intermodal solutions (rail+road+sea) in Asia Pacific. Engaged with Zero Emission Maritime Buyers Alliance (ZEMBA) to support e-fuel-powered container shipping tender for ocean transport. Targets renewable fuels and energy efficiency in land and ocean logistics.

• Use-of-sold-products energy efficiency

  Product use at home (especially home appliances and lighting) contributes to household energy consumption. Strategy is to improve energy efficiency of products. Launched first A Class LED bulb in SOLHETTA range per EU energy labelling regulations. No formal policy yet on product use-phase energy.

• Plant-rich food offer transition

  Expanded plant-rich food offerings in IKEA restaurants (defined as ≥75% plant ingredients by weight), launching a new rice mix with vegetables dish. Addresses upstream food ingredient emissions, including ammonia from fertilisers in food production.

• Supply chain — 90% external sourcing from 800+ suppliers

  Inter IKEA Group manufactures about 10% of the IKEA product range (mainly wood-based furniture) and sources the remaining 90% from over 800 external suppliers globally. IKEA Supply AG manages the supply chain together with transport service providers, warehouse providers and customs brokers. The partnership with IOM aims to improve conditions for migrant workers across this supply chain.

• Supply chain decarbonisation through IWAY supplier code of conduct

  The Group has a responsibility to secure good social, environmental and working conditions across the IKEA supply chain. The supplier code of conduct IWAY sets out minimum requirements on environmental, social and working conditions. Since its inception in 2000, IWAY has been regularly updated to address emerging social and environmental risks, and suppliers are responsible for communicating requirements to their employees and sub-suppliers. The majority (~90%) of IKEA products are sourced from external suppliers, making supply chain decarbonisation a primary strategic lever.