Having recently become a Strategic Partner with Ellen Mac Arthur Foundation, Inter IKEA Group is the first business to take part in their dedicated new series of Q&As.
They talked to Lena Pripp-Kovak, Inter IKEA Group’s Chief Sustainability Officer, to find out how IKEA plans to become a fully circular business by 2030, and asked her how the circular economy can help with recovery from the Covid-19 crisis.
Lena explained why the circular economy approach is crucial to finding new and innovative ways to work with renewable and recycled materials, protect ecosystems, and reduce our climate footprint.
Q. IKEA is committed to becoming a circular business by 2030. What made you realise the circular economy was the way forward — did you have a lightbulb moment?
A. Transforming to a circular business is a very logical next step for us. The IKEA business is guided by our vision to create a better everyday life for many people, and our roots in the stony landscape of Småland, in Southern Sweden, has always driven us to make the best possible use of the limited resources available.
Being circular is both a responsibility and a good business opportunity. We know that customer behaviour is changing and that there is a growing awareness of the impact of wasteful consumption.
As a global home furnishing and food brand we want to inspire and enable healthier and more sustainably living within the boundaries of the planet. This includes addressing people’s needs in relation to how they acquire things, how they care for and restore value in the things they love, and how they pass on the things they no longer want, by offering circular products, and services.
We also know that resources are limited and that we must find smarter ways to use them.
Transforming into a circular business is the way forward.
Q. In transitioning to a circular business model, what specific actions are you taking regarding the three principles of the circular economy? Designing out waste and pollution, keep products and materials in use at their highest possible value, and regenerate natural systems.
A. IKEA will design all products from the very beginning to be repurposed, repaired, reused, resold, or, as the last step in material recovery, recycled, generating as little waste as possible. It’s about seeing IKEA products as material banks for the future. We have developed circular product design principles to guide us through this process.
The circular approach is also crucial to finding new and innovative ways to work with renewable and recycled materials, and reducing our climate footprint. We aim to only use renewable or recycled materials by 2030. Today, more than 60% of the IKEA product range is based on renewable materials, like wood and cotton, and more than 10% contains recycled materials.
We are committed to regenerating resources, protecting ecosystems, and improving biodiversity. Forestry will always be a key focus area and we strive to become forest positive. We will also continue to source from more sustainable sources as well as broadening our focus.
Q. What are the challenges you anticipate, or have already faced, in transitioning to a circular business model? How do you plan to overcome these challenges?
A. The challenge is that it impacts our business in all aspects: how and where we meet our customers, how and what products and services we develop, how we source materials, and how we develop the IKEA supply chain.
One current challenge is that there is a shortage of clean, recycled materials, such as plastics and textiles, and we are working to increase global availability. This is an important element of minimising environmental impact and moving towards a circular economy.
Q. How will the circular economy help in the economic recovery from the Covid-19 pandemic, in terms of decoupling growth from finite resources and building resilience?
A. Even if the outbreak calls for urgent action here and now, it is important to not lose sight of our long-term commitments. A more modern, inclusive, and circular economy built on renewable energy will increase our resilience and be the way forward. Now is the time to also look ahead and lay the groundwork for a positive recovery for people, society and the planet. We will engage and collaborate with other industries, policy makers, businesses, experts, and NGO’s in communities and across borders to turn the challenges into opportunities and strive to achieve the positive changes we want to make happen.
Q. You say you will promote circular offers to your customers and inspire new behaviour — could you tell us a bit more about that?
A. We see our relationship with our customers as a vital part of our transformation into a circular business. Developing opportunities for all customers to acquire, care for, and pass on products in circular ways is how we will continue to reach towards our vision to create a better everyday life for many people.
This is our chance to promote and enable a more affordable, healthier, and sustainable life at home. Through the development of circular products suited for care and repair, services supporting reuse and refurbishment, and the exploration of new platforms for sharing and leasing, we aim to make a big impact.
Q. IKEA has been exploring the idea of ‘product as a service’ business models — can you tell us what you have learnt? We know this works well with digital offerings, such as Netflix and Spotify, for example, but what has been your experience of this business model with regards to physical products?
A. As the first step in verifying our approach to refurbishment and resale, we are testing our refurbishment capabilities. The first test took place in late FY19, where sofas were collected
from customers, refurbished, and resold. The focus of the test is to understand the potential flows of products (repackaging, loading/unloading options, storage), the capabilities needed for refurbishment (what condition is the sofa in what is the defect, what repair is needed and how much time and cost will it take to fix?) within our existing supplier base and with external partners, and the customer perception of refurbished products when they are resold.
Creating a better understanding of these areas and gaining practical knowledge will enable us to conduct further tests in scalability, and price fluidity as we aim to offer an even more affordable option through the sales of refurbished products.
Q. Can you tell us about your background and career path? What inspires you?
A. I have worked for almost 25 years in sustainable development. What inspires me the most is to see how more and more young people are bringing energy, awareness and open minds, and are ready to make a change. They are looking for possibilities to create a positive impact and build the future they want.
Q. IKEA has been working with the Foundation for a number of years, why is now the time to elevate the partnership?
A. Transforming into a circular economy requires more than ever that we work together – many changes are needed in society. We are very happy to take the next step in our collaboration with the Ellen MacArthur Foundation to both advance our own transition and to make the circular economy a central part of the home furnishing industry. One of our first projects together will be to develop a global common dictionary on the circular economy that can support an industry-wide transition.
Q. What excites you about the Strategic Partnership with the Foundation?
A. Our common ambition excited me – to make a real lasting impact on a large scale and drive the transformation to a circular society for many people. by putting the home furnishing business on the global circular map. I’m happy to work together with a fact based approach to find new innovative solutions.