Executive Briefings

How Ikea's $1Bn Supply Chain Investment Could Boost Its Profits And Brand

Ikea says it will invest $1.1bn in forestry and companies developing recycling technologies, renewable energy and biomaterials as part of the retail giant's plan to secure a long-term supply of sustainable materials for its products.

"We are going all in to transform our business, to ensure that it is fit for the future and we can have a positive impact," said Peter Agnefjäll, Ikea Group president and CEO, in a statement.

It's also a business move that will have a positive impact on Ikea's bottom line.

Ikea has invested €1.5bn ($1.6bn) in renewable energy since 2009 including wind turbines and solar panels. The company also, as of fiscal year 2016, diverts from landfills 88.7 of its overall operational waste, through recycling or energy recovery. These efforts are also helping Ikea grow its business; the company says its total revenues during fiscal year 2016 reached €35.1bn ($37bn), up 7.4 percent from last year.

Pierre Francois Thaler, co-CEO of EcoVadis, which provides supplier sustainability ratings for global supply chains, said in an interview there are three main drivers for sustainable procurement.

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"We are going all in to transform our business, to ensure that it is fit for the future and we can have a positive impact," said Peter Agnefjäll, Ikea Group president and CEO, in a statement.

It's also a business move that will have a positive impact on Ikea's bottom line.

Ikea has invested €1.5bn ($1.6bn) in renewable energy since 2009 including wind turbines and solar panels. The company also, as of fiscal year 2016, diverts from landfills 88.7 of its overall operational waste, through recycling or energy recovery. These efforts are also helping Ikea grow its business; the company says its total revenues during fiscal year 2016 reached €35.1bn ($37bn), up 7.4 percent from last year.

Pierre Francois Thaler, co-CEO of EcoVadis, which provides supplier sustainability ratings for global supply chains, said in an interview there are three main drivers for sustainable procurement.

Read Full Article