OSLO (Reuters) - IKEA, the world’s largest furniture retailer, will shift to renewable energy by 2020 and grow more trees than it uses under a plan to safeguard nature that has won support from environmentalists.
The Swedish-based group, which wants to build on many customers’ desire for a greener lifestyle, also said on Tuesday it would limit sales by 2016 to energy-efficient products including induction cookers and LED light bulbs.
“This will be a great driver of innovation,” said Mikael Ohlsson, chief executive of the firm which is known for its flat-packs and giant stores that are expected to be visited by 776 million people this year.
Ohlsson told Reuters he had no doubt the “People & Planet Positive” strategy would save money both for IKEA and its clients, although he declined to estimate total savings.
Under the plan, IKEA will invest 1.5 billion euros ($1.95 billion) from 2009-15 in solar and wind power to produce at least 70 percent of the group’s energy. By 2020 it would produce as much renewable energy as it consumes.
IKEA already owns wind farms in six European nations and has 342,000 solar panels on its stores, warehouses and factories that generate 27 percent of the group’s electricity.
“We are a little under half-way in terms of investments” to the 2015 goal, said Steve Howard, chief sustainability officer. The company would also halve its greenhouse gas emissions from its operations by 2015, from 2010 levels.
By 2020 IKEA, one of the world’s top users of wood, will grow at least as many trees as it uses to make products such as beds or cupboards. Already, IKEA says it does not take wood from natural tropical forests, such as in the Amazon or the Congo basins.
By 2017 it would buy 10 million cubic metres of wood - half the projected total for that year and four times current amounts - from sources such as those certified by the non-profit Forest Stewardship Council.
Environmentalists backed the shift. John Sauven, head of Greenpeace UK, said it “puts IKEA at the forefront of leading companies” trying to transform their businesses in the face of environmental threats.
Mark Kenber, head of the UK-based Climate Group think-tank, said IKEA’s plan was a roadmap to a “clean industrial revolution” and urged other businesses to follow.
Both Kenber and Greenpeace confirmed the remarks, provided by IKEA. The firm said other environmental experts had praised the strategy, including the WWF conservation organisation.
Many companies, from chip maker Intel Corp to Wal-Mart Stores Inc, are setting green goals and moving towards renewable energy as part of efforts to combat global warming and ensure supplies.
As part of the shift to energy-efficient products, induction hobs use 40 percent less energy than conventional cookers.
IKEA announced the shift to LED lighting, which can last 20 years, earlier this month. Changing all 12 billion incandescent bulbs worldwide to LEDs would cut global greenhouse gas emissions equivalent to those of the Netherlands.
A shift to more efficient appliances, such as fridges, cookers or lightbulbs, would reduce energy use by the average household by 30 percent. “That is like having a 10 percent pay rise for most people,” Howard said.
IKEA also set stricter targets for palm oil, leather and cotton supplies. It would tighten bans on child labour and enforce workers’ rights, partly with unannounced audits of suppliers. The company would also ensure greater supplies of clean water in communities where it operates, cut waste and promote recycling.
IKEA predicted the number of visitors to its stores would double to 1.5 billion by 2020, and forecast a potential 45-50 billion euros in turnover, up from 27.5 billion for 2012.
It predicted the number of stores would rise to 500 from 338 and that staff numbers would rise to above 200,000 from 154,000.
Ohlsson said IKEA had freedom to act partly because it is not listed on a stock market. “We are owned by a foundation, it means also that our whole focus is customers throughout the chain and not stock exchange and owners,” he said. ($1 = 0.7674 euros)
editing by David Stamp and Anna Willard