IKEA commits to transforming its entire value-chain | Knowledge Hub | Circle Economy Foundation
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Business case
IKEA commits to transforming its entire value-chain
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To prepare for the transition towards a regenerative circular economy, the company has an array of plans to develop a holistic value chain.

Problem

The transition from a linear ‘take-make-waste’ economy to a circular economy requires that the life span of consumables and manufactured goods—including items such as furniture—is extended through incorporating circular design. At the EU level, Parliament, in July 2017, adopted a resolution urging the European Commission to take steps against planned obsolescence. Following France’s 2015 energy transition law that made planned obsolescence a crime, the resolution requested the Commission to do the same for the entire EU. Additional action needs to come from product manufacturers and designers who are key players in the circular transition.

Solution

In 2018, Swedish retail giant, IKEA, committed to transforming its entire value chain. To prepare for the transition towards a regenerative circular economy, the company has an array of plans to develop a holistic value chain that supports a variety of its activities, such as developing circular customer service offers, making fully circular products (while ensuring that materials are responsibly sourced), and using only renewable and recycled materials. 

The company recently collaborated with the Ellen MacArthur Foundation (EMF) in 2020 to help establish a common vocabulary around the circular economy. The result of their collaboration culminated in a glossary of circular terms published by EMF in September 2021.



Outcome

One of the primary goals of the company is to extend the material life cycle of their products through reuse, refurbishment, remanufacturing and recycling. To achieve these circular business ambitions, the company opened a second-hand pop-up store in Sweden in partnership with ReTuna, the world's first ‘recycling mall’. Moreover, IKEA audited more than 9,500 products and scanned for circularity based on their own product design principles of designing for assembly, disassembly and reassembly. The company has also conceptualised their own product development plans highlighting actions needed to ensure all their products are adhering to circular principles and, therefore, are as circular as possible by 2030, a date synonymous with achieving the Sustainable Development Goals (SDGs). In fact, IKEA’s product audit in 2021 was an effort to find if the company was on track with their 2030 goals. They found that their average fulfilment rate was 76%, and the lowest-performing product rate was 36% as compared with 28.6% in 2020, respectively. At present, IKEA claims that nearly 55.7% of its sourced materials are renewable, while 17.3% are recycled. The company also announced that it has secured 100% renewable electricity for its Russia operations, including offices, stores and factories.

Additional information

Photo by Jueun Song on Unsplash.

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