Green Business Interviews: IKEA

IKEA & the Environment - An Interview with Anders Berglund

Anders Berglund was the co-owner of IKEA Seattle, the popular Swedish-based home furnishing retailer, until selling back their majority stake to the Swedish company in 2007. EarthShare Washington (ESW) interviewed Mr. Berglund regarding IKEA's leadership in the areas of sustainable design, resource conservation, & forestry, and IKEA Seattle's strides to become a better corporate steward of the natural world.

IKEA is probably best known for its cutting edge home furnishings at affordable prices, featuring modern designs with a Scandanavian flair. Perhaps lesser known are IKEA's social and environmental initiatives. Their focus is on designing products that use fewer raw materials and create less waste. By working in close cooperation with their suppliers, they can monitor all aspects of a product's life, from choice of raw material through production and distribution. IKEA does not accept wood from intact natural forests or from forests with a clearly defined high conservation value. Instead, they source all wood from verified, well-managed forests that have been certified according to a forest management standard.

This spring, Earth Share of Washington linked IKEA Seattle with the NW Biodiesel Network, so that they can begin to recycle the waste cooking oil from their cafe and turn it into biodiesel, a clean and renewable vehicle fuel.

For more information, please visit the IKEA Seattle website.

ESW: Tell us about IKEA's environmental philosophy. How did it evolve?

AB: As a corporation, IKEA realizes the role of business is changing, that our customers, stakeholders, suppliers, and coworkers expect more from us. With these expectations comes the responsibility of taking an active role by influencing social and environmental issues wherever we are present. At IKEA we believe it is possible to make traditional business objectives and social and environmental responsibility work together-and well.

This philosophy is good for business and will contribute to long term profitability-because our customers will feel reassured that they are doing business with a company that shares their views and values.

We know that we are only in the beginning and have a long way to go before our work is a natural integrated part of our day to day business.

These values and philosophies have evolved over time with different events consistently heightening our awareness. From 1943 on, our goals to cut costs and become more efficient has pushed IKEA towards creating a better environment long before we, or anyone else, became actively interested in the issue.

A favorite example of this is our flat packing. It reduces cost, and minimizes the amount of transport involved, which lessens the environmental impact.

ESW: How does IKEA's environmental philosophy differ from other retailers?

AB: It is difficult to say what other retailers' philosophy is, so I'll focus on what we believe is different from others. IKEA believes in working with our suppliers-through education and support-to raise awareness and help give them a better picture of how their business effects the environment around them and around the world.

An example of this is "The IKEA Way on Purchasing Home Furnishing Products" or "IWAY". This is a guiding document that supports our vision and business idea. The document outlines (in great detail) expectations and procedures for suppliers. IWAY is administered and monitored by IKEA of Sweden Trading Services Office and by a global compliance group.

ESW: Give one or two examples of how that philosophy plays itself out at the store level.

AB: For coworkers: we offer Environmental Training, the opportunity to participate on the Environmental Committee, and a part time Environmental Coordinator position.

The Environmental Coordinator: creates an annual Environmental Action Plan, monitors the day to day recycle and recovery of product and business waste, monitors energy use of the facility by compiling statistics.

For visitors: we provide an Environmental kiosk for customer information, various brochures on IKEA's environmental work, and occasionally display environmental communication on different products.

ESW: How does a major retailer like IKEA influence the supply chain?

AB: The IKEA Group has nearly 220 stores in 33 countries. Nearly 1600 suppliers manufacture products for IKEA. IKEA's purchasing is carried out through 43 trading service offices around the world. IKEA mainly sources from European countries, but purchases from developing countries and countries in transition are rapidly increasing. A limited part of the supply comes from the industrial group of IKEA, Swedwood, which has 35 factories in 9 countries.

One of the focuses of the IKEA culture is to be different. IKEA goes to places where none or few other companies have been. The easy choice would be to buy where the risks of exposing ourselves to social and environmental problems are zero. This is not the IKEA way. We also believe, by being present in difficult places, we can contribute to positive development through education and support of the local economy.

ESW: Does IKEA see its role as "educating" employees and customers?

AB: We believe education is a large part of our ¿roleî, certainly, which is why we offer environmental training for coworkers, who can then give our customers information regarding our products and philosophy.

ESW: Some would claim that IKEA makes "disposable" products, and that, in the long run, more durable products are better for the environment. How do your environmental programs address these concerns?

AB: Our environmental programs are centered around our philosophy, which focuses on developing healthy, safe, and functional products while minimizing the environmental impact. In the development of our products, IKEA uses the "E Wheel" Method. The stages of the E-Wheel are: 1) Raw materials 2) Manufacturing 3) Use 4) End of Life.

One of the most important parts of the wheel is the 4th spoke. In most cases, the product is recycled-but here at IKEA Seattle, we've added another spoke to the wheel with our "IKEA Green", an area of the Recovery department that adds to the lifetime of a product by rebuilding it or creating another unique product with parts of the old product, re-pricing it and placing it on the AS IS sales floor.

On a more personal level, I do own a lot of IKEA products, some of them at least 20 years old. I must say that for the most part they make me very proud of being part of this company. My daughter now has a dining set I bought in 1979. 2 generations of kids have been hammering on this table with all kinds of cutlery. The table now of course has many dents, but is still very functional. The chairs almost look like they did when I first bought them. So I am not sure that more expensive furniture is necessarily longer lasting. I hate to admit to it, but my wife has forced me to buy a few items at the competition. I know she is taken to the style, but the quality in relation to the price has left me wondering in a few cases.

ESW: Tell us about yourself. What drew you to IKEA?

AB: It is really strange that I have worked in retail for so many years, since the only thing I was sure of as a 19 old , was that I would never work in retail. I had grown up with my relatives all being retailers and I did not like the hours they had to work. After my business degree I could not get a job in any other place than in retail and that eventually led me to IKEA, which had and still has a great reputation in Sweden as a good place to work. I have worked for IKEA since 1978 Denmark, Canada, the old East Bloc and now USA.

ESW: How would you characterize our society's attitude toward the environment?

AB: In general too lukewarm. I am really concerned over the long term environment. I just got a hybrid car, I know it is not a big deal, but it is small thing I do to cut down on my gas consumption. We can all do a lot more and I really think we need help to legislate stricter rules. Coming from Sweden I know I am more accepting to government involvement in certain issues than the average American.