Better planet

We contributed to this goal by promoting IKEA products, food and services with a lower climate footprint and by providing renewable electricity to IKEA suppliers (via investments in wind and solar farms made by Ingka Investments). In FY23, scope 3 emissions from IKEA products and food arising from Ingka Group sales (88.0% of IKEA sales) decreased by 26.3% against the FY16 baseline.

In November 2023 we strengthened our climate targets in alignment with the Science Based Targets initiative (SBTi) Corporate Net Zero standard and submitted these for approval to SBTi. The revised target is a reduction of at least 50% in the climate footprint of IKEA products and food by 2030 (compared to our 2016 baseline). We will report against the revised targets from FY24 once they have been approved.

Strengthening our climate targets in FY24 and becoming climate positive

Ingka is committed to becoming climate positive by 2030 by taking action across the value chain and beyond. We are focusing on three areas:

1. Drastically reducing greenhouse gas emissions

In 2015 we committed to reduce emissions in line with science and the Paris Agreement’s 1.5°C pathway. We work towards net-zero by setting science-based targets that cover our scope 1, 2 and 3 emissions. Our initial science-based targets were approved by the Science Based Targets initiative (SBTi)* in 2018. We have now updated our climate targets in alignment with the SBTi’s Corporate Net Zero standard and submitted these for approval to SBTi in November 2023. The revised goals set out our commitment to reducing absolute greenhouse gas emissions from the value chain by at least 50% by 2030 (compared to our 2016 baseline) and to reach net-zero emissions by the latest 2050 by reducing our absolute emissions by at least 90% and without using carbon offsets. Our previous 50% reduction target included storing and removing carbon in the value chain; however, with the updated target we will achieve this only through emissions reduction. These updated targets were set in FY24 so we will report against them in next year’s report once they have been approved by the SBTi.

2. Removing and storing carbon through forestry, agriculture and products

In order to reach net-zero emissions by FY50 at the latest any remaining emissions will be neutralized by removing and storing carbon from the atmosphere through better forest and agricultural management practices within the IKEA value chain. We will ensure that carbon remains stored in our products for longer through our work on the circular economy.

3. Going beyond the Ingka value chain

In addition, to become climate positive, we will contribute to additional reductions of greenhouse gas emissions in society,addressing a larger climate footprint than our own value chain. To do this we will collaborate with our customers, suppliers and partners to reduce their greenhouse gas emissions, to remove and store carbon through forestry and agriculture outside of our own value chain and to contribute to additional reductions of greenhouse gases e.g. through our IKEA Energy Services and investments in solar and wind farms.

In FY23, our greenhouse gas emissions from our own operations (scope 1 and 2) decreased by 53.2% against our FY16 baseline and by 23.1% since FY22. This was mainly driven by an increase in renewable electricity and closure of our Russian retail operations. Our energy efficiency has also improved.

As part of the update to our climate targets we have strengthened this target. The revised target (which has been submitted to the SBTi for approval) is an 85% reduction. We will report against it from FY24 once it has been approved by SBTi.

In FY23, 79.2% of the electricity we used was from renewable sources compared to 74.6% in FY22*.

During FY23, we retrofitted six existing sites with renewable heating and cooling (mainly heat pumps powered by renewable electricity). Out of the seven owned sites we opened during the year (new stores, meeting places and fulfilment units), five of them are equipped with renewable heating and cooling. Phasing out fossil fuels by switching to heat pumps requires significant investment and can be a complex and lengthy process. We have developed a roadmap for installing heat pumps at over 150 units by 2030.

We have achieved a 2.7% reduction in relative greenhouse gas emissions from our FY16 baseline, mainly due to our expansion in city centres which has reduced the average journey time to our stores. However, relative emissions have increased in the past year by 1.9% mainly due to higher congestion in global cities which has led to an increase in driving time per trip.

As part of the update to our climate targets we have strengthened this target. The revised target (which has been submitted to the SBTi for approval) is an absolute reduction of at least 40%. We will report against it from FY24 once it has been approved by SBTi.

By the end of FY23, the proportion of home deliveries by electric or zero emission vehicles doubled to 24.6% (FY22: 12.3%)*. We plan to significantly speed up progress to meet our target for all home deliveries to be made by zero emission vehicles through further investment, innovation and collaboration.

In FY23, zero emissions vehicles accounted for 39.2% of owned or leased vehicles used in our own operations (including passenger and goods vehicles). We have made progress compared to FY22, but availability of electric vehicles as well as charging infrastructure were barriers during FY23.

In FY23, we recycled 75.9% of waste (FY22: 75.7%). Our total waste decreased by 7.3% in FY23 compared with FY22, and by 13.2% from FY16. Approximately 80% of the reduction in FY23 is due to the closure of our IKEA retail operations in Russia.