IKEA accelerates suppliers’ shift to 100% renewables

IKEA has launched a program that will allow its 1,600 suppliers to consume 100% renewable electricity in their production. By Climate Champions | June 10, 2021

IKEA has launched a new program aimed at securing 100% renewable electricity at direct suppliers – especially in markets where it’s currently difficult to access renewable electricity.

With two thirds of the IKEA climate footprint directly connected to the supply chain, the program will help put the Swedish retail giant firmly on a path to achieving its goal of 100% renewable energy throughout the entire value chain by 2025.

Once the target is reached, IKEA estimates that 670,000 tonnes CO2 emissions per year will be avoided, equivalent to approximately 3% of the total climate footprint of the IKEA value chain.

To ensure this happens, IKEA will provide local solutions, such as bundled framework agreements and Power Purchase Agreements to enable suppliers to purchase renewable electricity from the grid. This, according to IKEA, can cover the electricity demands of the supplier, which cannot be generated on-site.

“Together with our direct suppliers we will take the necessary steps and contribute to limit climate change to 1.5°C. We have a long-term perspective and the financial strength to invest in activities and support our suppliers to have a positive impact on people and the planet. By working together, we can make renewable electricity both more affordable and accessible.” said Henrik Elm, Global Supply Manager, Inter IKEA Group.

The program will be introduced in 2021 for direct suppliers in Poland, China and India, which are three of IKEA’s largest purchasing countries. It will be followed by a gradual global roll-out.

In 2020, IKEA joined the ‘1.5°C Supply Chain Leaders’ initiative, where leading companies share their commitment and learnings from engaging their supply chains to limit climate change to 1.5°C. The initiative is hosted by Exponential Roadmap Initiative which is an official partner of Race to Zero, a campaign that’s rallying the world’s largest alliance of non-state actors to take rigorous and immediate action to halve global emissions by 2030.

IKEA is also offering to finance renewable energy generated at suppliers’ on-site locations. According to IKEA, all heating and about 15% of electricity consumption of its suppliers can be addressed by on-site investments with installations of, for example, solar panels and boilers.

IKEA is aiming to becoming climate positive by 2030 by reducing more greenhouse gas emissions than the value chain emits, while growing the IKEA business.