Net-Zero Transition Roadmap 

Decarbonisation levers

We have identified many of the actions we will take to reach our ambitious FY30 targets. We will be working to address the remaining gaps over the next few years through a focus on scaling up existing solutions and identifying new technologies and solutions that will bring us closer to our goals. Our decarbonisation plans are increasingly integrated with our innovation and development process. When new and relevant solutions pass the exploration and pilot phase, they are rolled out, where applicable, to markets via the annual Ingka Business Plan. 

Key Ingka Group actions to transition the business to Net Zero and Beyond include:

• Striving and towards 100% renewable electricity across our operations, while continually improving energy efficiency
• Enabling our customers and co-workers to travel smarter to our meeting places, e.g. by providing charging infrastructure, reviewing our location strategy, as well as electrifying our home deliveries and co-worker travel.
• Increased use of recycled materials and expanding our plant-based food offer, with a lower climate footprint.
• Transitioning towards a circular business for example by offering buy back and take back services, in-store circular hubs, online platforms for second-hand products.

To tackle our biggest emissions sources in our value chain (Scope 3), we work closely with our franchisor and strategic partner, Inter IKEA, who supplies the IKEA range.

• For materials – the largest climate footprint – clear plans are in place for each material area, and, in FY23, a new goal was set to halve GHG emissions from materials by FY30 compared to FY16.
• Additionally, Inter IKEA is working on improving the energy efficiency of product use at home, through better lighting, electronics, and appliance choices.
• Currently, Inter IKEA’s direct suppliers of IKEA products use 73% renewable electricity share in their production, and Inter IKEA continues to work with our suppliers to make further improvements here.
• Work has started to reduce the climate impact of glues used in products, which account for 5% of the IKEA value chain emissions, by switching from fossil-based glues to bio-based glues.

Reducing emissions in our own operations 

Emissions from our own operations are a priority for reduction since we can directly influence those emissions. Reducing our operational climate footprint also demonstrates our commitment and encourages action by suppliers and partners to reduce their own emissions. Our stores are also the face of the IKEA Brand and through them, we can inspire others to act and play a role. 

Ingka Group commits to reduce absolute emissions from our own operations by 85% by FY30 from a FY16 base year.

The most significant element of our operational climate footprint comes from heating and cooling our stores, centres and warehouses.  Reductions will be driven by energy efficiency improvements and phasing out fossil fuels from our heating and cooling systems.

We have developed a roadmap to retrofit 150 units (IKEA stores, Ingka Centres meeting places, distribution centres, and offices) and plan to invest in operational improvements in the coming years. These investments include projects for…

• Installing heat pumps
• Geothermal technology
• Energy efficiency improvements

During the maintenance of cooling systems, small quantities of refrigerant gases can escape contributing to greenhouse gas emissions. To reduce the impact of so-called fugitive emissions we are switching to refrigerants with a lower global warming potential. We are also focusing on ways to improve maintenance and life cycle management of cooling systems to reduce leakages of refrigerants into the atmosphere.

Ingka Group also commits to increase active annual sourcing of renewable electricity from 73% in 2016 to 100% in 2025 and to continue active annual sourcing of 100% renewable electricity up to 2030. We already use renewable electricity for our retail sites and meeting places in 28 countries, 80% of total electricity use. Of this, 7% is generated by on-site PV panels, and further increasing on-site generation is a priority for our Real Estate strategy. The remaining renewable electricity comes from contracts with grid suppliers backed by renewable energy attribute certificates.  Where possible these certificates are sourced from our own wind and solar farms.

Reducing mobility related emissions 

Customer travel to and from our stores, co-worker commuting and business travel and home deliveries – accounts for around 11% of our total value chain footprint as of FY23. Most of the emissions in this category, are from customer travel but emissions from delivery have grown in significance over the last few years as online orders have increased.

Reducing emissions from mobility will largely be driven by increased availability and use of electric and alternative fuel vehicles by our customers, co-workers and home delivery teams and partners. Although we expect further improvements in electric vehicle and alternative fuel technology over the next decade, we believe it’s important to act now to reduce emissions using the technologies already available. We are also focusing on actions that support customers and co-workers to adopt more sustainable modes of transport, opening locations that are closer to our customers and working with our delivery partners to improve efficiency and achieve zero emissions home deliveries.

To reach our goals we are focusing on:

• Engaging with truck manufacturers on the development of their EV ranges and testing new vehicles as they are developed
• Incentivising/supporting/requiring our third-party delivery partners to increase use of electric and alternative fuel vehicles
• Route optimisation to reduce distances travelled by home delivery vehicles
• Innovative local schemes, such as our partnership with Box2Home in Paris.

Financial levers: 

We are developing our use of different financial levers to support implementation of our transition plan and embed our targets in investment decision making. This includes setting operational carbon budgets for each of the three Ingka businesses, which are allocated down to country and/or site level. 

We are developing a methodology to calculate the climate return of investments, which will help us achieve the maximum possible emissions reduction for our climate action investments. This will ensure our investments are affordable for the business and have the most impact for the planet.

Understanding the financial implications of our journey to net zero is an ongoing process, due to changing regulations and customer preferences. Any investments made to meet our climate goals are funded through our operational profit and loss and through our investment portfolios. Our business functions and countries are responsible for developing funding and resource allocation plans.