IKEA Australia reduces climate footprint by 89% while growing the business
At IKEA, we have a vision of ‘creating a better everyday life for the many people’. For us, being a successful company is about creating value over profit. We measure value in four dimensions; how we can create better homes for customers, better lives for the many people, a better planet for all, and a better company for now and the future.
The IKEA Australia FY24 annual summary and sustainability report confirms we have reduced our operational climate footprint by 89% since FY16, while growing revenue by 68%.
Our global ambition is to reduce our absolute emissions by 50% by 2030, compared to FY16 baseline. Already we have achieved a 30% reduction, while growing the business revenue by 20% over the same period. By significantly reducing our climate footprint while growing the business proves the business case for investing in climate action works.
Positive change
Unlike businesses that must be focused on their shareholders, our profits only have two possible destinations: either it goes back into improving our stores, products and business – or it helps create change through IKEA Foundation.
As an Ingka Group retailer, 85% of net income was reinvested into the company and 15% was paid as a dividend to the Stichting INGKA Foundation, to achieve its charitable purpose by providing funding to the IKEA Foundation.
Increasing the affordability of IKEA products
At a time when other retailers were raising their prices to secure profit margins during a cost-of-living crisis, over the past two years, we have committed $125 million in price reductions on over 3,000 items, with the goal of restoring our prices to their pre-pandemic levels.
A meaningful career in retail, no matter who you are
3,778 co-workers were employed by IKEA Australia across our 10 stores, three Plan and Order Points, remote customer meeting point and distribution centre.
In FY24 we achieved our gender balance goal of 50/50 in management positions and reduced our gender pay gap to 3.5%. Inclusive hiring workshops and unconscious bias training for all hiring managers, as well as gender balance in interview panels and inclusive succession planning are an important part of our work to increase the number of women in leadership positions.
IKEA Australia is supporting working parents with an industry-leading paid parental leave policy from the first day of employment. Up to 26 weeks paid leave is available for all co-workers, regardless of family formation, and superannuation is paid on both paid and unpaid parental leave a co-worker elects to take – up to 26 weeks.
IKEA is proud to be accredited as a Family Inclusive Workplace, with a dedicated plan to support parents manage work-life balance.
We are also committed to creating a workplace and customer experience free from homophobia, biphobia, intersexism and transphobia. These efforts have now been benchmarked on the Australian Workplace Equality Index (AWEI) as the definitive national benchmark on LGBTQ+ workplace inclusion. It comprises the largest and only national employee survey designed to gauge the overall impact of inclusion initiatives on organisational culture, and we are proud to have achieved this ranking in 2024.
Changing the narrative: Refugee Workforce Inclusion
At IKEA, we believe refugee integration is good for business and society. Yet misconceptions and negative stereotypes mean the social and economic benefits refugees bring to their new countries often go unrealised. This is a narrative we’re committed to changing.
35 permanent hires were made through our Refugee Workforce Inclusion program in FY24, with over 220 participants since 2020.
Participants from 23 cultural backgrounds, speaking 43 languages, aged from 18 to 64 yrs, have enriched IKEA Australia in countless ways, and we actively engage with other employers in many forums to share our experiences and motivate action for refugee employment alongside our partner Community Corporate.
Find out more about our program here IKEA Australia Refugee Workforce Inclusion - IKEA.
Shining a light on hidden homelessness
IKEA has partnered with Save the Children Australia to raise awareness of homelessness driven by domestic and family violence, and to help support survivors throughout their journey to safety, recovery and ultimately to find a place to call home. This includes financial assistance for housing and specialist support services, along with design expertise and home furnishings for different types of refuge accommodation.
This included a child-led design project to reimagine seven spaces in emergency refuges across Queensland and fit out of these spaces, making a refuge feel more like a home and reflecting the needs of a child through their eyes.
In FY24 we helped create safer places for women and children to call home including financial and product donations, and in-kind support to Save the Children Australia, directly supporting 647 women and children.
Awareness of the issue was raised with millions of Australians through our instore activation ‘This is not a home’ revealing the real-life living conditions facing thousands across the country.Find out more here Everyone deserves a place to call home - IKEA.
Doubling our impact with Good 360
IKEA is working with Good 360 to find a home for discontinued, ex-display or excess products for people who need them. In FY24 we supported 1300+ people with $138,000 IKEA products that were discontinued, ex-display or excess products, which also saved 5.2 tonnes of potential waste from landfill. Since our partnership began in June 2023, IKEA has donated close to 8,000 items, with a value of more than $485,000 (RRP) to 42 different charities. Over 4,850 people have been supported across Australia.
Australians are hungry for meat-free alternatives
Across the world, we offer plant-based food at the same price, or a lower price than the meat-based option, even where the cost of raw materials is higher. By including more plant-based alternatives on our menus, we can enable and inspire more people to try plant-based eating.
In FY24 we launched the plant-based evolution of the IKEA Hot dog with a free trial for IKEA Family customers in select locations across Sydney.
44% of our main dishes are now plant based, with a lower environmental impact than meat. Our aim for 2025 is for 50% of IKEA restaurant meals offered to be plant based.
Reducing waste
At IKEA Australia, much of our food waste comes from our production areas, the serving line and coffee grounds, and we’re determined to reduce it. We have introduced the Food Waster Watcher initiative which uses AI cameras and a scale connected to the food disposal areas to allow IKEA co-workers to track and manage food wastage. Since Waste Watchers began in March 2021, we have seen a 37% reduction in food waste across all IKEA Australia stores.
We have a Product Recovery & Quality department within all IKEA stores dedicated to preventing product waste, which also generates cost-savings. 976,000 products were diverted from landfill through our dedicated product recovery and quality teams, including 35,550 pre-loved IKEA products from our Buy Back offer.
We offer free spare parts – online, with free delivery, and in all our stores – so customers can keep the IKEA items they love in use for as long as possible, whether a part may be missing, broken or needed to renew a product – such as when moving house. Over 37,000 customers used our free spare parts offer in FY24.
Overall we achieved a 74.3% operational waste recycle rate, striving to achieve 100% of operational waste to be avoided or recycled by 2030.
The future of energy is renewable
As we work to reduce our climate footprint in our retail operations in Australia and achieve this goal, we’re investing in renewable energy through onsite generation at our stores and distribution centre and switching to renewable energy for heating and cooling in our buildings.
In FY24, IKEA Australia achieved 100% renewable electricity usage across our retail operations, secured from onsite energy generation and where needed, large-scale renewable energy certificates in line with Clean Energy Regulatory requirements.
Through energy saving initiatives, our buildings are now 16% more efficient than FY16, using 22KW/m2 less, while 7 out of 10 IKEA Australia stores now have no reliance on fossil fuels, with all 10 converted from gas to electric heating and cooling functions by 2030.
Zero Emissions deliveries
In FY24 45% of customer orders were delivered in a zero emissions vehicle, reaching a new peak of 65% in January 2025. Recognising that charging infrastructure is a major barrier for our delivery service partners, we have made a $4.5 million investment in dedicated electric vehicle chargers for delivery partner fleets in all IKEA stores across the country and the distribution centre. The investment represents a major step forward by a retailer that will support the road freight logistics sector to decarbonise.
In Australia, we are committed to a target of 100% zero emission delivery as soon as possible.
We expect in 2025, we can achieve approximately 90% of truck deliveries via a zero emissions vehicle, which is all of our metro customer orders. The remaining 10% is our regional volume - we aim to achieve this as soon as technology allows.
Renea Robson, Sustainability Manager, IKEA Australia, said, “We are proud of what we have achieved this year as a company and we will continue to innovate, lead by example and collaborate on our journey, working to overcome the complexities and challenges on our sustainability agenda to reach our ambitious goals.”
The FY24 Annual Report and Sustainability summary is available here: ikea-australia-sustainability-report-2024.pdf
For more detailed information you can find the Ingka Group Annual Summary and Sustainability report here.
