IKEA says shrinks climate footprint with help from new light bulbs

A view shows the logo of IKEA on a closed store in Kotelniki
A view shows the logo of IKEA on a closed store in Kotelniki outside Moscow, Russia July 5, 2022. REUTERS/Evgenia Novozhenina

STOCKHOLM, Feb 15 (Reuters) - IKEA, the world's biggest furniture brand, said on Wednesday its annual carbon emissions fell 5% in the last fiscal year following efforts to boost renewable energy use and make its products more energy efficient.

IKEA has a target to be climate positive - reducing more greenhouse gas emissions than its value chain emits - by 2030.

It said emissions in the entire value chain - from raw material production to customers' use and disposal of products - was estimated to total 25.8 million tonnes of CO2 equivalent in the 12 months through August 2022, against an upwardly revised 27.2 million tonnes in the 2021 fiscal year.

One of the main drivers of the reduction was the development of a more energy efficient LED bulb range called "Solhetta", said Jon Abrahamsson Ring, chief executive of the Inter IKEA Group that owns the IKEA brand.

Helping suppliers to use more renewable energy in countries such as China - by getting them discounted loans and framework agreements to increase their access to clean power - also contributed to the emissions cut, he told Reuters.

Inter IKEA acts as franchisor to IKEA store owners and is in charge of supply.

Abrahamsson Ring said earlier that retail sales volumes did not increase in fiscal year 2022 as IKEA struggled to meet demand due to supply shortages. Retail sales were up on the back of price hikes, to 44.6 billion euros.

Ingka Group, which owns most IKEA stores worldwide, reduced its own emissions by 23% to 455,014 tonnes of CO2 equivalent. The store owner's emission reduction was also achieved by using more renewable energy.

Reporting by Marie Mannes and Anna Ringstrom Editing by Helen Popper

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Stockholm-based company news correspondent who mainly covers anything to do with retail and industrial companies in Sweden as well as other sectors with Swedish companies. She previously covered the general Nordic stock market from Gdansk, reporting on a range of subjects, from companies exiting Russia to M&As and supply chain concerns. Marie has degrees in journalism and international relations and is keen on finding stories that drive the market and that have unreported elements to it.