How Is Ingka Group Decarbonising Its Supply Chain?

Ingka Group, the largest IKEA retailer, is making significant progress in its mission to reduce its environmental impact, with a strategy that places manufacturing and supply chain transformation at its core.

Ingka has set ambitious targets to halve its emissions by 2030 against a 2016 baseline and to achieve net zero by 2050, goals that necessitate a fundamental rethink of its vast operational footprint.

The scale of the challenge is not lost on its leadership.

“Not knowing where to start is often the biggest barrier to action,” says Karen Pflug, Chief Sustainability Officer at Ingka Group. "The doom, the gloom, the planet-sized problems, can feel overwhelming, even paralysing.

"That’s why we believe that with the size and reach of the IKEA brand, we have both a responsibility and an opportunity to communicate sustainability in a way that inspires and enables people to take action.”

For Ingka Group, this action begins within its own value chain.

Decarbonising logistics and operational waste

A key pillar of Ingka Group's strategy involves tackling emissions from its logistics and retail operations.

Ingka Group is on a path to phase out fossil fuels, aiming for 100% renewable energy use across electricity, heating and cooling by 2030.

This transition directly impacts its manufacturing sites and extensive network of stores.

According to its Net Zero Transition Plan, Ingka Group aims for more than 90% of its home deliveries to be made by zero-emission vehicles by 2028, a major challenge for a global retailer.

In addition to transport, waste generated within its own operations is a major focus. The business intends to recycle 100% of its operational waste by 2030.

Ingka Group has already reduced its total climate footprint by 30% against its 2016 baseline, with its targets validated by the Science Based Targets initiative as being aligned with a 1.5°C pathway.

As of FY24, Ingka reports it is on track to meet its published targets.

Powering production with renewable energy

To support its operational decarbonisation, Ingka Group is investing heavily in renewable energy generation.

Its investment arm, Ingka Investments, has pledged investments totalling €7.5bn (US$8.8bn) in the renewable energy sector by 2030.

This investment is not merely financial but directly supports its operational goals by providing clean power for its facilities.

As of January 2025, Ingka's portfolio includes 49 wind farms and 26 solar parks across 17 and nine countries, respectively.

These assets are crucial for powering its manufacturing partners and retail stores, reducing reliance on fossil fuels throughout the production and sale of its goods.

The inauguration of its first solar park in Poland is a tangible example of this strategy in action, bringing Ingka Group closer to its goal of self-sufficient clean energy for its operations.

Advancing a circular supply chain

Circularity is being treated as a system-wide transition across the Ingka Group.

It involves creating a closed-loop system where materials can be reused and recycled, fundamentally altering its manufacturing and supply chain processes.

Ingka Investments has established a dedicated circular investments platform with an ambition to invest around €1bn (US$1.17bn) to grow recycling infrastructure.

This platform is focused on key materials used in its products, including plastics, textiles, wood, mattresses and food, as demonstrated by its collaboration with RetourMatras, which opened its first mattress recycling facility in La Cavalerie, France.

On the retail side, second-hand areas are now present in 365 stores, with online buy-back options in 338 stores. 

In FY24 alone, Ingka Group repurchased over 495,000 used items from customers, feeding them back into the supply chain for resale or recycling. The approach not only reduces waste but also creates a more resilient supply chain dependent on fewer virgin materials.

Ingka Group’s advocacy at global forums like COP28 for a meaningful price on carbon and an end to fossil fuel dependency emphasises its belief that business success is intertwined with climate action.

“What we do now will shape what lies ahead of us and we can’t leave this to the next generation to fix,” Karen said ahead of the 2023 conference. “We know that climate action is good for business now and in the future.”