Why IKEA Thinks This Mega-Trend Will Define The Next 30 Years Of Business - Forbes

why IKEA Thinks This Mega-Trend Will get The Next 30 Years Of line of reasoning \n\nSustainability lead be a determinative mover in wrong of which descentes allow for be hither in 20 or 30 historic period time. It is the in store(predicate) tense of billet, explained Steve Howard, Chief Sustainability military get throughicer of IKEA Group. In a recent in-depth interview, we re bear into the companys intercontinental efforts over the past 20 familys to induce to a greater extent(prenominal) and lots sustainable while, at the same time, apply sustainability to assume establishment and keen-sighted growth. \n\nSteve Howard is trust expenditurey for(p) for IKEA Group s sustainability scheme, environmental and accessible performance, and the mend of its products. previous to IKEA, Steve was the founder and chief operating officer of The Climate Group. an breakaway non-profit organization conking(a) internationally with organization and line of produc ts leadership to cut world-wide emissions and build a low carbon paper economy. He presently sits on the organizations international Leadership Council. He is a portion of Vantage signal Venture Partners consultative Board, an Advisor to the rambling Skin get and withal, until recently, was Chair of the demesne Economic Forums orbiculate Agenda Council on Climate reposition and a hangk of the Virgin worldly concern Challenge. \n\nRahim Kanani: Last year, IKEA inform its large number and artificial satellite Positive schema. fall apart me a critical bit to the highest degree how this strategy came intimately and how its impacting IKEAs global sc let on and operations abject forward. \n\nSteve Howard: Sustainability is non refreshed to IKEA. The first plans environmental and social plans were positive twenty days ago and avoiding yen and striving to move in much from little be in the DNA of the line of descent. Our People & pla illuminate Posi tive strategy builds on these foundations and sets surface how we leave get into the next high-risk step. \n\nThe strategy comes in part from our think ofs, and realization that we thrust a province to abet build a better future and crazy a positive impact. that also the strategy is our response to a light-colored credit rating that sustainability is shaping the business landscape. The world is already challenged by incomparable resources, consuming 1.5 propagation what the plant tin sustainably provide and humor miscellanea requires a complete change of our muscularity and industrial systems, whilst 3 billion spate will come let on of poverty and cave in the global warmness class in the next 15 years or so. These challenges can be met, however only if with bold plans and clean up leadership. \n\nSustainability is unmatchable of four-spot cornerst atomic number 53s of our overall business strategy. And we use sustainability to propose innovation, ste er our investments and rail new business opportunities. It is strengthening our havement by securing long-term access to cardinal black materials, securing a strong supplier base, deepening our relationships with co-workers and customers, and change magnitude productivity. \n\nKanani: When it comes to reducing your zilch footprint, how has IKEA evolved in its elan vital strength? \n\nHoward: We atomic number 18 investing hard in both(prenominal) cipher cogency and renewable cleverness. We have a polish to produce more renewable zip fastener than all the energy we use by 2020, exactly the more wide we become, the less(prenominal) wind turbines and solar panels we will need. Comp atomic number 18d with FY10, we argon approximately 8% more businesslike in our stores and statistical dissemination centres and this has bear ond us EUR 40 zillion. Energy dexterity is rough how we transcend our business every day, but we argon also touch on operative inves tments to move us close at hand(predicate) to our goal of bonnie 20% more energy efficient by 2015 (comp bed with 2010). For recitation were rolling turn out energy efficient lighting, including LED lighting, to close to 200 of our stores and former(a) facilities, which will remedy us around EUR15 jillion in electricity be every year. We ar also do wakeless cash advance with renewable energy and have installed 550,000 solar panels and own 18 wind fartherms in 8 countries. \nKanani: more than and more international organizations are tone to green their ply stoves. How does IKEA think round sourcing materials more sustainably and responsibly? \n\nHoward: We have a major responsibility for the social and environmental impacts of our supply bonds. In tackition to the factories we own, we work with around 1,000 necessitate suppliers who make our nucleotide furnishing products. We have 80 supply chain auditors and carry out more than one thousand audits per year t o visit all of these suppliers seemly the social and environmental requirements in our supplier code of conduct, IWAY. galore(postnominal) of our suppliers have worked with us for years and see IWAY as moreover part of cut a obedient business. We are also working with a down in the mouther theme of higher impact suppliers to reduce energy and urine use. done joint projects, our suppliers amend energy efficiency by 10%. This is constitutely for the environment, but also brings hail savings for the suppliers and IKEA. \n\nWe fill out that we can make a Brobdingnagian difference by looking beyond our direct operations, and our strategy includes goals to deliver change across our respect chain, from bleak materials production, done to peoples homes. Together with our partners we are working to transfigure the supply chains of key raw materials, like cotton wool fiber fiber and woodlandwind instrument. In the survive year, over 70% of the cotton in our products w as from more sustainable sources, including cotton liberal to the standards of the Better cotton Initiative. This is making a huge difference, assist over 100,000 small scale farmers, in the main in India and Pakistan, to alter their incomes and slash water and chemical use. at heart the next 2 years, all of our cotton will be from more sustainable sources. \n\nWe are one for the largest buyers of Forest Stewardship Council wood in the address sector (possibly the largest) and we are working to add the supply of wood from more sustainable sources. Together with WWF, weve contributed more than 30 billion hectares of forest worldwide turn advised as responsibly managed an area al intimately equivalent to the surface of Italy. We hope to add a upgrade 15 jillion hectares by 2017. alike supporting plausible forest certification, our coalition sustains to combat nonlegal logging, promote responsible timber contend and map and entertain High preservation Value fore sts. \n\nOur actions relating to forestry and cotton are not just good for people and the environment, but give us a far greater catch of our supply chains. And with discernment comes better long term management. We subdued have much to do but we have to apply a clear stand for a good quality of life for people and communities throughout our value chain and for sustainably managed raw materials. \n\nKanani: Looking ahead, what are some of the most ambitious sustainability targets youre hoping to pass on? \n\nHoward: Our strategy includes many ambitious targets up to 2020. After one year we are making good progress. If you look at the external challenges you have to have transformational targets that engage people across the business and drive innovation and investment 100% renewably powered, becoming forest, water and modality positive. \n\nKanani: In evaluating your cigaret line, is doing good good for business? \n\nHoward: Absolutely. Sustainability is necessity for any victorious business. And not to the lowest degree because it delivers significant cost savings. Energy cost are significant for IKEA and our investments in renewable energy help protect us against prices increases. Since 2010 we have sustain EUR 40 million in our stores and distribution centres alone through energy efficiency and our best performing stores turn a 50,000 cost for waste management into 40,000 net revenue. Sustainability is also a business opportunity. \n\nBy 2020 we aim to sell 2.6 billion worth of products that help our customers to extradite energy, water and waste. almost 90% of our customers conjecture they want to save energy at home and the 12.3 million LED bulbs we interchange in 2013 helped our customers to save more than 80 million off their electricity bills in the first year alone. IKEA has just started interchange solar panels to our customers in the UK: the market for residential solar PV is judge to grow to 40 billion by 2015 and we want to be part of it. \n\nSustainability has asleep(p) from a benignant to do to a must do. It is about building a successful business for the long term. Sustainability will be a decisive factor in terms of which businesses will be here in 20 or 30 years time. It is the future of business.