Ingka Group, parent of IKEA, has pledged itself to making an important investment in furthering the transition towards a fossil-free future for its operations. Ingka Group commits through an endowment of €1.5 billion ($1.6 billion) to the energy efficiency of its global store network as well as renewable heating and cooling systems. This initiative supports Ingka Group’s bigger objective of achieving 85% reduction in the climate footprint from its operations by 2030 as part of its broader effort to decarbonize its operations and value chain.
Heating and cooling systems represent the single biggest source of Scope 1 and 2 emissions; these account for direct and indirect emissions from its operations. Ingka Group reported in its latest sustainability report that even though it has realized several major successes in sustainability, it is still on course but not likely to achieve 100% renewable heating and cooling in all buildings by the end of the decade. Measures the company has so far put forward include holistic action plans focused on the gap and quickening the pace.
Ingka Group’s Chief Sustainability Officer Karen Pflug highlighted how important this investment was to meeting Ingka Group’s environmental ambitions. “Transitioning to renewable heating and cooling is a critical enabler in our journey toward decarbonization; it is, however, a complex and expensive exercise. This investment enables us to take steps further and at a faster pace on our plans – and we also know it will pay off in the long term,” she said.
This investment commitment is an addition to another announced last year, where Ingka Group allocated €7.5 billion to investments meant to spur off-site renewable energy generation and technologies. Of this, over €4 billion will be used for wind farms and solar energy. This commitment on investments continues deepening this effort, where efforts are being made to retrofit already existing properties of IKEA with renewable energy systems and ensure that all new properties are newly fitted with these technologies from inception.
The company said that at present, retrofitting is already under way for 150 properties of IKEA. Simultaneously, the company insisted that every reduction in emissions would mean improvements in energy efficiency as well as some reductions in future operational costs. Ingka Group CEO Jesper Brodin underlined two directions, as he emphasized the initiative benefits: “The future of energy must be renewable, and this additional investment will enable us to reduce our carbon emissions, increase efficiency, and lower costs in the long term. It’s also good for business – a win-win.”.
Ingka Group understands that the imperative to address climate change is urgent and that it demands businesses play a critical role in the energy transition. Therefore, the company prioritizes renewable heating and cooling systems by being a trailblazer for the retail sector on how large-scale investments in sustainable practices can deliver both economic benefits and contribute toward the achievement of global climate goals.
As one of the world’s largest retailers, IKEA’s efforts to decarbonize its operations have the potential to set a benchmark for others in the industry, reaffirming its dedication to fostering a sustainable future for the planet.