November 27, 2019 / 8:11 AM / 17 days ago

IKEA to invest 200 million euros in race to turn 'climate positive'

STOCKHOLM (Reuters) - IKEA, the world’s biggest furniture group, said on Wednesday it would spend around 100 million euros ($110 million) to support direct suppliers as they switch over to renewable energy use.

FILE PHOTO: Customers walk by a placard reading "Act Now" as they leave the IKEA store in Kaarst near Duesseldorf, Germany, April 3, 2019. REUTERS/Wolfgang Rattay/File Photo

Brand owner Inter IKEA, which is in charge of supplying retailers with stock, said it also planned to invest around 100 million euros in projects to remove carbon from the atmosphere through reforestation and forest protection.

It said the investments would be part of its work toward making IKEA climate positive - cutting more greenhouse gas emissions than the IKEA value chain emits - by 2030.

The target, announced in 2018, encompasses the entire value chain from raw material production to customer purchase - including IKEA’s around 1,000 direct suppliers.

“Our suppliers have worked on this agenda for quite some time so we know where there are critical areas,” Chief Sustainability Officer Lena Pripp-Kovac told Reuters about the renewable energy related investment, adding that the focus would be on textile, ceramics, glass and metal producers.

Chief Executive Torbjorn Loof said IKEA would invest where it was likely to have the biggest impact on emissions. “This is a way for us to add capital that will be available to speed up these transformations,” he said in an interview.

IKEA now says that to reach its 2030 target it also needs to help store carbon already emitted, besides capping emissions.

The money earmarked for forestry management would be spent in partnerships with organizations and forest owners, Pripp-Kovac said.

In September Ingka Group, which owns most IKEA stores, pledged to exceed its 2020 target to produce as much renewable energy as the energy it consumes by the year’s end.

More than 400 firms including IKEA, H&M, Coca-Cola and Sony have committed to a U.N.-backed initiative to help limit global warming.

IKEA produces around 10% of its range itself and sources the rest from suppliers.

Reporting by Anna Ringstrom, editing by Louise Heavens, Kirsten Donovan

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