Ikea expands renewables programme for suppliers to 10 more countries

The combined electricity consumption for production in these markets is around 0.27m tonnes of CO2 – equitable to 13% of Ikea’s climate footprint

Ikea announced the reduction in its latest annual sustainability report. Included in the report is an announcement that the Swedish retailer would expand a renewables programme for direct suppliers in more than 10 countries this year.

Ikea launched a renewable supply chain programme in 2021. With almost two-thirds of Ikea’s climate footprint located in the supply chain, the retailer is aiming to power the entire value chain using renewable electricity.

At the time of the launch, the programme supported around 1,600 firms and direct suppliers, with bundled framework agreements and Power Purchase Agreements (PPAs) to be set up for businesses in Poland, China and India – three of the company’s largest purchasing countries.

Ikea stated that achieving 100% renewable electricity through the suppliers in Poland, China and India would save 670,000 tonnes of carbon emissions annually, equivalent to 3% of the carbon footprint of Ikea’s value chain.

The company has this week confirmed that the programme will be expanded to the Czech Republic, Germany, Italy, Lithuania, Portugal, Romania, Slovakia, Sweden, Turkey and Vietnam. The combined electricity consumption for production in these markets is around 0.27m tonnes of CO2 – equitable to 13% of Ikea’s climate footprint.

“Striving towards 100% renewable energy is critical to limit climate change to 1.5C. We know that many of our supply partners struggle to purchase 100% renewable electricity and that only a part can be generated onsite,” Ikea Group’s head of climate Andreas Rangel Ahrens said.

“By working together, we have shown that it’s possible to make renewable electricity both accessible and more affordable. We hope this also inspires other businesses to support their suppliers in the same way.”

Ikea will provide suppliers in those countries with solutions including bundled framework agreements and PPAs to procure renewable energy. Additionally, suppliers can also install onsite solar panels and boilers through an existing €100m renewable energy fund announced in 2019.

Ikea is also a founding member of the 1.5C Supply Chain Leaders initiative, a collaborative platform for businesses striving to cut emissions sharply across their supply chains, which was launched by a string of big businesses including BT and Unilever.

The Exponential Roadmap Initiative was launched in September 2020, as part of the Race to Zero campaign, with Ikea, Unilever, BT, Ericsson and Telia named among the founding corporate members of the 1.5C supply chain leaders. This scheme, and its other workstreams, are supported by the We Mean Business coalition.

The initiative builds on Ikea’s commitment to become climate positive by 2030, which includes the retailer powering its global operations with renewables by 2025 and then ensuring that all remaining energy, including heating and cooling, derives from renewable sources by 2030.

Ikea’s parent company, Ingka Group, generated more renewable energy than it consumed in 2020, marking a milestone in its vision to become a “planet-positive” business.