Ikea launches renewables programme for direct suppliers

Ikea has unveiled a new programme that will ensure that all of its direct suppliers are powered by 100% renewable electricity, as the retailer pushes towards its commitment to become 'climate positive' by 2030 by reducing more emissions than the value chain emits.

Ikea launches renewables programme for direct suppliers

Ikea states that achieving 100% renewable electricity through suppliers in Poland

With almost two-thirds of Ikea’s climate footprint located in the supply chain, the retailer is aiming to power the entire value chain using renewable electricity. A new programme, announced on Thursday (10 June), will aim to secure 100% renewable electricity for Ikea’s direct suppliers.

According to the retailer, the new initiative will support around 1,600 firms, with bundled framework agreements and Power Purchase Agreements (PPAs) to be set up.

The programme will officially launch next year. Ikea will introduce the initiative for suppliers in Poland, China and India – three of the company’s largest purchasing countries. A global implementation will then follow.

Ikea states that achieving 100% renewable electricity through the suppliers in Poland, China and India will save 670,000 tonnes of carbon emissions annually, equivalent to 3% of the carbon footprint of Ikea’s value chain.

“Together with our direct suppliers we will take the necessary steps and contribute to limit climate change to 1.5C,” Ikea Group’s global supply manager Henrik Elm said.

“We have a long-term perspective and the financial strength to invest in activities and support our suppliers to have a positive impact on people and the planet. By working together, we can make renewable electricity both more affordable and accessible.”

The new programme will build on Ikea’s commitment to become climate positive by 2030, which includes the retailer powering its global operations with renewables by 2025 and then ensuring that all remaining energy, including heating and cooling, derives from renewable sources by 2030.

Ikea’s parent company, Ingka Group, generated more renewable energy than it consumed last year, marking a milestone on its vision to become a “planet-positive” business.

Ikea generated renewable electricity equivalent to more than its annual energy consumption during 2020, through a mix of onsite arrays and PPAs with offsite array developers.

On the former, Ikea’s global estate of warehouses and stores now hosts more than 920,000 solar panels. On the latter, the company has secured stakes in – or full ownership of – a total of 547 wind turbines and two large-scale, offsite solar farms. New additions for 2020 included seven wind farms in Romania and an 80% stake in the two solar farms, which are both US-based.

Overall, renewable generation was equivalent to 132% of Ikea’s consumption.

In September 2020, Ingka Group unveiled plans to spend at least €600m on sustainability-related initiatives within a 12-month period. Particular focus areas will be reducing the consumption of fossil fuels for heating in stores and warehouses, and assessing staff pensions to ensure providers share the company’s climate ambitions.

Ikea is also calling on other businesses to transition to 100% renewables. The retailer is supporting calls from the Countryside Climate Network (CCN), ahead of today’s G7 Summit, for local authorities and businesses to become “100% green”.

The CCN consists of 27 rural authority members – representing more than 45% of England’s land area – who are also members of the UK100, a climate coalition for local elected leaders. The members are calling on other councils and regions to set net-zero and renewables targets.

A representative from the Ikea Foundation, Liz McKeon, said: “We are committed to a just transition to a zero-carbon future. This means making sure the many people can benefit from a clean, green and sustainable economy—something that will only happen if everyone has the opportunity to take part.

“Rural communities in the UK are already feeling the impacts of climate change. As the G7 leaders meet in Cornwall, we’re supporting the CCN’s campaign to unite rural local authorities behind collective action and ensure the voices of their residents are heard.”

Matt Mace

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