Business Irish

Thursday 8 December 2016

Ikea assembled €1bn renewables budget

Alister Doyle

Published 05/06/2015 | 02:30

IKEA had sales of €30bn last year
IKEA had sales of €30bn last year

IKEA, the world's biggest furniture retailer, plans to spend €1bn on renewable energy and steps to help poor nations cope with climate change, the latest example of firms upstaging governments in efforts to slow warming.

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Two years ago Ikea struck a €16m deal to invest with Irish energy firm Mainstream Renewable Power to construct and operate the windfarm at Carrickeeny in north-west Leitrim.

Chief executive Peter Agnefjall said the latest measures would "absolutely not" push up prices at the Swedish group's stores. The investments will be "good for customers, good for the climate and good for IKEA too," he told Reuters. He said the plan was motivated by a desire to tackle climate change, rather than to court favourable publicity.

"Getting that message out to the customers is secondary," he said.

An internal review last year showed only 41pc of its customers see IKEA as a company that "takes social and environmental responsibility seriously", below its goal of 70pc by 2015.

IKEA, which had sales of €30bn last year, wants to generate all the energy used in its shops and factories from clean sources by 2020.

It will invest €600m on wind and solar power installations, adding to €1.5bn invested since 2009. It has already signed up to own and operate 314 wind turbines and has 700,000 solar panels on its roofs.

The IKEA Foundation, the charitable arm of the family-owned group, would invest €400m by 2020 in supporting families and communities in nations vulnerable to impacts of climate change such as floods, droughts and desertification.

Senior officials from almost 200 nations are meeting in the German city of Bonn this week to prepare for a summit in Paris in late 2015 at which governments aim to agree a deal to slow global warming.

The Alliance of Small Island States, which fears the impact of rising sea levels, welcomed IKEA's planned investments.

"I am heartened to see corporate leadership in this area," said Amjad Abdulla of the Maldives, chief negotiator for the alliance in Bonn.

There are signs that companies are taking a more active approach, keen to show their awareness of consumer concerns. Last month, top European companies urged governments to commit to slashing greenhouse gas emissions.

IKEA says it will ensure it grows as many trees as it fells by 2020. The top national suppliers of wood used in its furniture were Poland, Lithuania, Sweden, Germany and Russia last year.

Irish Independent

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