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Ikea Sustainability Report: Over Half of Energy Now From Renewables

Renewable energy now provides 51 percent of Ikea’s energy, up from 47 percent in FY10, according to the company’s 2011 sustainability report.

In FY11 (September 1, 2010 to August 31, 2011), the company’s 60 wind turbines and 40 solar arrays generated about 152 GWH of electricity. Ikea’s renewable installations now generate about 12 percent of the electricity needed to run its stores and distribution centers.

In FY11 the company bought a seven-turbine wind farm in Scotland, and it expects its nine-turbine farm in central Sweden to come online at the end of 2011, producing 75 percent of the electricity needs for 17 Ikea stores. The company now has solar panels in seven countries, and another 20 solar projects are on the way. It hopes to derive 70­ to 80 percent of its buildings’ electricity from renewables by FY15.

During FY2011, energy efficiency across all Ikea stores improved by 4 percent compared to FY2010, which the company says helped save 6.2 million euro. The gains were mainly achieved through improvements in store equipment, such as HVAC systems and lighting.

It has improved energy efficiency in its stores by ten percent compared to 2005, as measured by kWh per cubic meter of sold goods. For distribution, energy efficiency is up 33 percent versus 2005 levels.

But total CO2 emissions per cubic meter of sold products rose slightly in FY11, from 34.3 to 34.4 kg. Total scope 1, 2 and 3 emissions were 31,792,000 tons. The FY11 report did not compare this absolute figure to that for previous years.

The company said that 84 percent of the carbon dioxide emissions related to Ikea and its products can be attributed to material extraction, customer transportation, the use of products and their end-­of­-life. CO2 emissions per cubic meter of transported goods were down 4.9 percent in FY11 versus FY10 levels, en route to a goal of a 20 percent reduction.

The company’s water use was up significantly last year, from 4,959,448 to 6,570,471 cubic meters. Ikea said water consumption at its Swedspan operations increased sharply in FY11 as cal­culations this year included water used to clean industrial equipment, which was not included in FY10.

In FY11, the company mapped water use in the manufacturing of its products and started working with suppliers to help them reduce water consumption. It is developing a water strategy for its furnishing supply chain, to be rolled out this financial year, and says this will set priorities for how the company and its suppliers can reduce water use and improve waste water quality. The strategy will also include goals for 2015 and 2020.

Cotton cultivation is the most significant contributor to Ikea’s water footprint, the company says. The share of “more sustainable cotton” in the Ikea range increased from 13.4 percent of total cotton use in 2010 to 23.8 percent in 2011, reaching 50,000 tons. The company said more than 100,000 of its supplying farmers now use techniques that significantly reduce the need for chemical pesticides, fertilizers and water.

The retail chain has started to evaluate home furnishing products against the IKEA Sustainability Product Score Card, a tool for more sustainable product development and purchasing. In FY11 two percent of Ikea furnishing products were classified as “more sustainable” under the score card, but the company wants to raise this to 90 percent by FY15.

By FY15, it also wants all materials for home furnishing products to be renewable, recyclable or recycled. Analysis conducted in FY11 shows there are currently 45 materials – used in products representing around 10 percent of IKEA sales value – that ?do not meet any of these criteria. Challenging materials include foam, rubber and plastic composites.

Also by FY15, the company is aiming for energy-consuming products to be on average 50 percent more efficient then what was put on the market in 2008. All IKEA appliances now have energy rating A or A+, and all incandes­cent light sources have been replaced with the energy efficient compact fluorescent (CFL), halogen and light-­emitting diodes (LED).

The company has a goal of improving the water efficiency of its products by 50 percent by FY15, compared to the 2008 market average, but says it has not yet found a reliable solution for how to measure improvements in water efficiency.

Ikea has also started to use a basic life­cycle assessment tool that helps it to compare materials and products, with a focus on CO2 emissions. In addition, product developers and technicians use a new guide that provides a quick overview of key sustainability aspects of 100 of the most important materials in IKEA products, outlining the carbon footprint and to what extent the materials are renewable and/or recyclable.

The company is also increasingly replacing foiled, veneered and lacquered particle board in its furniture with a light­ weight particle board called BoBoard, which is unique to Ikea. This significantly reduces raw material consumption while maintaining quality and durability, Ikea says.

In FY2011, the share of FSC-certified wood in the Ikea range increased from 15.8 percent to 16.2 percent, bringing its total use of FSC-certified wood to 2.2 million cubic meters – equivalent to 55,000 fully loaded timber trucks. It has a goal of 50 percent FSC certified or recycled wood in its products by FY17.

But the percent of audited wood volumes that comply with Ikea minimum forestry requirements fell from 97 to 94 percent in FY11.

In FY11 the percent of home furnishing suppliers complying with Ikea’s code of conduct, IWAY, rose from 57 to 60 percent (67 percent including those approved with a maximum 60-hour working week), and from 85 to 94 percent for the Americas. Ikea has a goal of 100 percent across all regions by FY12.

The percent of Iway approved transport providers surged from 21 to 53 percent for customer delivery, excluding locally and nationally procured customer delivery carriers, en route to a goal of 75 percent by FY12. It achieved its FY15 goal of 100 percent IWAY approved food suppliers in FY11, up from 67 percent just one year earlier.

By FY15 Ikea is aiming for zero waste to landfill from its operations. The percent of its waste recycled or used in energy production rose from 84 to 86 percent for stores (from FY10 to FY11), and from 95 to 98 percent for Swedwood operations but fell from 91 to 90 percent for distribution, and from 86 to 64 percent for Swedspan. This was because Swedspan acquired a factory in Lure, France, and had to remove contaminated soil to prevent groundwater contamination, the report said.

The company has decided to phase out packaging using expanded polystyrene (EPS) foam by the end of FY15, and says no new EPS packag­ing applications will be allowed as of 2012. The company says one promising alternative is to use fibrous shock absorbers made from 100 percent recycled paper and cardboard, which is folded or molded to suit the product it sur­rounds, in much the same way that an egg carton cradles eggs.

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