Targets versus achievements - this article compares what a company said it would do with what it has actually achieved. This time, the focus is on Ikea. Taken from the second issue of Innovation Forum's new regular monthly publication, Supply Chain Risk & Innovation, which covers all the key trends, stats, numbers, critical analysis, campaigns and analysis in sustainable supply chains world-wide. Published ten times a year at: http://innovation-forum.co.uk

1. PAGE 10
PAGE 10
TARGETS VERSUS ACHIEVEMENTS
Ikealeveragesscaletomeettimbergoalearly
In this section we compare what a company said it would do with what it has actually achieved. This time, the
Swedish retail giant Ikea comes under the spotlight as it addresses traceability and chain of custody issues for
its secondary raw materials
Essential insight
• Ikea has met its target to
source 50% of its wood from
“more sustainable sources”
two years ahead of the 2017
target date.
• It has also made good
progress on sourcing
sustainable cotton, meeting
its goal on target.
• While supportive of the
RSPO, Ikea is keen for the
standards to be strengthened.
Its palm oil policy includes
two additional criteria that
go beyond RSPO.
• There is recognition that
where it is a relatively small-
scale buyer – say, for leather
– Ikea has “limited leverage to
bring industry wide change”.
CORPORATE INSIGHTSUPPLY CHAIN RISK & INNOVATION
TARGET RAW MATERIAL PROGRESS
50% SUSTAINABLE
By August 2017, at least 50% of wood to come
from “more sustainable sources”. By August
2017, 100% of wood from ‘priority areas’ to come
from more sustainable sources. By August 2020,
this will jump to 100% of all wood.* WOOD
ACHIEVED
In 2015, 50% of Ikea’s wood
came from sustainable sources
ensuring it met its 2017 target
two years’ ahead of schedule.
100% SUSTAINABLE
By August 2015, all cotton used in
Ikea products to be sourced from
more sustainable sources.**
COTTON
ACHIEVED
Goal reached at the end of 2015.
100% SUSTAINABLE
By December 2015, all palm oil (currently
used in home furnishing products such as
candles, and as a food ingredient) to come from
certified segregated sustainable sources or be
substituted with more sustainable alternatives. PALM OIL
ALMOST THERE
By December 2015,
approximatelyy 97% of palm oil
was from certified segregated
sources.***
100% WITH FULL CHAIN
OF CUSTODY
By August 2017, all leather used to have full
chain of custody and be produced according to
standards that help protect forests and respect
human rights and animal welfare. LEATHER
NOT THERE YET
Not likely to be met until August
2017 due to complexities of
leather supply chain.
100% CERTIFIED
By August 2015, all seafood sourced for
Ikea restaurants and Swedish Food Markets
to be certified.
SEAFOOD
ACHIEVED
Goalnowreached.Ikeaonly
sourcesandsellsAquaculture
StewardshipCouncilorMarine
StewardshipCouncil-certified
fishandseafood. ****
NOTES
* Defined as FSC-certified or
recycled wood
** Includes Better Cotton Initiative,
cotton from farmers working
towards BCI standards and cotton
grown to other regional standards
such as the e3 Cotton Program in
the US.
*** Applies to known sources of palm
oil only.
**** Crayfish is an exception due to
there being no certified fisheries.

2. PAGE 11
INNOVATION FORUM COMMENTARY
RECOGNISING THE LIMITS OF CERTIFICATION
As a global retailer selling everything from timber flatpack furniture and
sofas, to hotdogs and light fittings, the Swedish chain Ikea has worked
hard to position itself as a leader in the sustainable business world. Its
large-scale investment in renewable energy – backed-up by its focus on
selling domestic solar panels to customers in-store – has won plaudits
for understanding the opportunity of low-carbon economy thinking and
leveraging its scale to get projects off the ground.
With so many products sold at its huge warehouses around the world,
responsible sourcing is a core part of its positive people and planet
narrative. As outlined in its latest sustainability report, the focus is on the
five key commodities of palm oil, wood, cotton, leather and seafood which
make up the large proportion of its commercial offering.
Recognising the limitations of sticking to raw materials that have come
from so-called certified sources, Ikea is careful to describe the 50%
of its timber that is bought from FSC-labelled forests as being “more
sustainable” rather than merely “sustainable”. As Lena Pripp Kovac, Ikea’s
head of sustainability, range and supply, says opposite, the company
is keen to keep pushing the boundaries and development of standards
where appropriate to ensure it is having the desired effect.
Ikea’s sheer buying power can clearly help get results – as with cotton
and timber. But transforming a supply chain is more difficult where
you are a relatively small player, say with leather or seafood, and the
company recognises the need to work harder in developing partnerships.
For example, the company says it is working with the Marine Stewardship
Council to turn around the current situation of there being no supply of
MSC-certified crayfish in the world.
IKEA COMMENTARY
PROUD OF OUR MILESTONES
LENA PRIPP KOVAC, HEAD OF SUSTAINABILITY,
RANGE AND SUPPLY, IKEA
All of the cotton we use for our products comes from more sustainable
sources, and we have reached the 50% target of wood from more
sustainable sources ahead of time. We’re the only major retailer to have
reached this milestone for cotton and we’re one of the world’s largest
buyers of FSC-certified wood in the retail sector.
Palm oil: an ongoing challenge
We source relatively small amounts of palm oil and have made good
progress with the majority of the amount that we use. The challenge with
the remaining 3% of our volume is to understand which market-specific
food products contain palm oil – and we’re working to address this.
Our palm oil sourcing strategy includes two additional criteria that go
beyond RSPO requirements: no deforestation; and no new development
on peat, regardless of depth. By December 2015, we have asked Ikea
global suppliers to produce a roadmap of how they will meet these
additional requirements by December 2017.
The complexities of leather
The leather supply chain is long and diverse, and traceability is a big
challenge. Ikea is a relatively small leather user compared to, say, a large
shoe company, so we have limited leverage to bring industry wide change
as we can for materials such as cotton and wood. Butwe’reworking
hardtobringimprovements.Forexample,weareupdatingourleather
traceabilityrequirementstostrengthenstandardsinBrazil.Thesewill
includeinstructionsonthesystemsslaughterhousescanusetoensuretheir
suppliersarenotlinkedwithdeforestation.Onceweestablishtraceability,we
willprovideanimalwelfarestandardsforslaughterhouses.
Our long-term ambition is for the leather we use to have a chain of
custody – from breeding farm via slaughterhouse and tannery all the way
out to our customers – and be produced according to standards that help
protect forests and respect human rights and animal welfare.
Certifications has its limits
Our goal is to contribute to positive change in our supply chain and to
make materials from more sustainable sources the norm. Certification
schemes are contributing to this shift, and are also helping to raise
awareness and build trust with customers.
However, to truly transform the sustainability of materials,
certification standards must be continually strengthened to ensure they
make a positive difference for people and the planet. The most important
factor in bringing about positive change is close collaboration with our
suppliers throughout the chain. ★
IKEA’SSHEERBUYING
POWERCANCLEARLYHELP
GETRESULTS,
as with cotton and timber. But transforming a
supply chain is more difficult where you are a
relatively small player
CORPORATE INSIGHTSUPPLY CHAIN RISK INNOVATION