‘Long, loud and legal’ policies crucial to supporting low-carbon transition, says Ikea chief

The growing megatrends surrounding demographical evolution, decarbonisation and digitalisation will increase the need for the private sector to inform policymakers of the types of legislation that are needed to support low-carbon growth, Ikea's chief sustainability officer Steve Howard has claimed.

Speaking at a Financial Times Summit in London on Tuesday (29 November), the chief sustainability officer of the world’s biggest furniture retailer warned that companies that don’t embrace the low-carbon transition would “wither away”, while those attempting to drive change would need to communicate with policymakers to create enabling and long-lasting frameworks.

“This is about our future economies, this is about growth and opportunities and innovation, but we do need policy,” Howard said. “This isn’t about stopping carbon, it’s about policy supporting innovation and growth for the 21st century. It’s about long, loud and legal policy and we need businesses to step up and tell policymakers that we want legislation that is good for jobs, good for the economy, good for business and we need long-term policy that we can play and invest against.”

Howard revealed that he was sympathetic towards carbon intensive businesses that would have to radically change operations if they were to survive in a low-carbon economy, but suggested that most companies would be “hugely successful” if disruptive innovations and business models became central topics in boardroom discussions and actions.

Ikea has been keen to embrace this disruption, having shifted its operational model to encapsulate servitisation, leasing and the sharing economy. The company has also pushed the low-carbon agenda to its customers. The cost of commercial LED lights have fallen by 85% in Ikea stores in four years, and the company also offers residential solar arrays from its stores across nine countries including the UK.

Howard has been keen to pass this message onto policymakers. At the Business and Climate Summit in June, the Ikea chief urged policymakers to craft “well-designed policies” – which implemented aspects from science-based targets and carbon pricing – to aid businesses with the transition to a “carbon free 21st century”.

Diverse spectrums

Also speaking at the Financial Times Big Picture event was the chief executive officer of Sustainable Energy for All (SEforAll) and special representative of the United Nations Secretary General for Sustainable Energy for All, Rachel Kyte.

Kyte echoed the calls from Howard for clearer policies, but suggested that companies were still “wrestling” with short-term views in boardrooms that would need to become more diverse as disruption begins to influence business decisions.

“Now is not the time for businesses to be shy about calling for kinds of policy,” Kyte said. “Now is the time for the business sector to be pretty strident with it. There’s an opportunity that comes from standing on the cusp of a new era of super efficiency, but I don’t think that is understood by many in the boardroom still.

“While companies wrestle with long-termism against short-termism, we’ve heard the international community double down on climate commitments in Marrakesh. Inaction will far outweigh the cost of action, and how quickly we get to the transition will depend on how much ambition and leadership is shown.

“We’re about to go through a transformation, the likes of which none of us have ever seen. That transformation is underway. The energy transition is underway and very few times during a revolution do the people running the system at the beginning emerge at the end. I’m not here to cut off anyone’s head, but I will say that the sooner we get more diverse spectrums into the boardroom, the better-abled businesses are going to be, to manage their way through this.”

Matt Mace

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