IKEA Sustainability and Climate Reports FY24: making progress towards climate goals and investing in the future

The financial year 2024 (FY24)* was a year of actions to address climate change, nature loss and inequality across the IKEA value chain. The total IKEA climate footprint decreased by 5% (vs. FY23) and 28% compared to the baseline year FY16 in absolute terms**. Key developments include an increased share of renewable energy in production and retail, as well as scaled-up investments in material innovation and production processes.

The IKEA Sustainability Report FY24 and the IKEA Climate Report FY24 are issued by Inter IKEA Group and cover the collective efforts from contributors across the entire IKEA franchise system and value chain to meet the objectives set out in the IKEA Sustainability Strategy. 

“Our business direction is clear. We want to make IKEA more affordable, accessible and sustainable, including for people with thin wallets. As part of this journey, last year we took two big steps - we lowered prices by an average of 10% across all markets and made steady progress on our sustainability agenda. We have reduced our climate footprint by 5% compared to last year and we saw a positive movement towards decoupling growth from our greenhouse gas emissions,” says Jon Abrahamsson Ring, CEO, Inter IKEA Group. 

In FY24, the IKEA climate footprint is estimated to be 21.3 million tonnes CO_² eq - a decrease of 5% compared to FY23 and 28% lower compared to baseline FY16. The reduction in FY24 is attributed to continued increase in renewable energy, improved energy efficiency, movements towards electrification of transport, but also to lower production volumes.   

Compared to the baseline year FY16, relative volume-based emissions decreased by 9% in the upstream part (such as sourcing raw materials and manufacturing) of the value chain and 34% in the downstream part (such as transportation, delivery, and product use). This showcases progress in reducing emissions relative to volumes, a positive step toward decoupling growth from emissions.  

As materials stand for almost half of the IKEA climate footprint, efforts continue to increase the share of secondary raw materials, use materials more efficiently and develop products with a lower climate footprint. In addition, collaboration with suppliers is ongoing to improve traceability for both primary and secondary raw materials. 

“Our commitment and investments in sustainability are not only crucial for safeguarding the future of both people and the environment, but also for the future of the IKEA business,” says Jon Abrahamsson Ring. 

This year's Climate Report includes a FY30 climate roadmap for Inter IKEA Group. The roadmap is based on a business consequence analysis conducted to support the development of the IKEA net zero goals, which were approved by the Science Based Targets initiative (SBTi) in June. It provides an overview of the key actions needed to halve the overall emissions across the value chain by FY30 compared to baseline and marks the first step toward a more comprehensive transition plan.  

The climate roadmap shows the wide range of actions – from circular design and responsible sourcing of materials to innovative production processes. This includes designing products from the beginning to be able to be reused, refurbished and recycled, and addressing the root cause of climate change by phasing out fossil fuels and striving towards 100% renewable energy across the value chain.  

During the year, the IKEA code of conduct for suppliers, IWAY, was enhanced. The new IWAY requirements address seafarers’ rights, animal welfare, as well as social and environmental aspects in agriculture. 

“This marks a major step towards strengthening our responsible sourcing approach across the value chain. We have also developed the IKEA biodiversity and water agendas as critical steps towards setting targets aligned with science,” says Jon Abrahamsson Ring. 

Highlights from the financial year 2024 include: 

• Increased share of renewable energy In IKEA retail and other operations*** to 71% in FY24 from 67% in FY23, with the share of renewable electricity increasing from 77% to 81%.  
   
• Achieved 100% renewable electricity at 93 additional factories or suppliers, bringing the total to 491 (constituting 44% of our direct suppliers). 
   
• Reduced greenhouse gas emissions (GHG emissions) across the IKEA value chain, in absolute terms, including materials, production, food ingredients and product use at home  
   
• Introduced the MITTZON sit/stand desk using high-strength steel to allow for thinner, lighter materials without sacrificing quality. This material reduction also lowers GHG emissions. 
   
• Reduced the overall foam consumption in mattresses by 20% by using alternative comfort and design solutions. 
   
• Expanded the TRIXIG range, which offers useful, low-priced solutions to make care and repair accessible to more customers and prolong the life of their products. 
   
• 97% of wood in our products was either Forest Stewardship Council certified (FSC) or recycled. 
   
• Moved towards paper-based bags for furniture fittings in our packages, helping to reduce our plastic consumption by an estimated 1,400 tonnes a year. 
   
• Expanded our plant-rich food offer with new dishes and investments in innovative ingredients, including introducing a hybrid patty in Sweden with 50% minced beef and 50% plant-based protein. 
   
• Launched the new foldable PAX frame designed for easy disassembly and reassembly.
   
• Endorsed the Business for Nature statement ahead of COP16 calling for renewed policy ambition on nature, demonstrating our support for swift implementation of the Global Biodiversity Framework (GBF). 
   
• Introduced new IWAY requirements to further strengthen our responsible sourcing approach across the value chain by addressing seafarers’ rights, animal welfare, and social and environmental aspects of agriculture. 
   
• IKEA Social Entrepreneurship partnered with 11 social businesses during FY24, employing 10,000 people to produce handcrafted products. 
   

The IKEA Sustainability Strategy outlines the ambitions and commitments, creating a common agenda towards 2030. More examples of progress are to be found in the IKEA Sustainability Report FY24 and IKEA Climate Report FY24, including Inter IKEA Group, the 12 franchisees and our suppliers. Each part of the IKEA business sets goals and road maps to deliver on the strategy and to allow for locally tailored and relevant activities. 

*FY24 is the period from 1 September 2023 to 31 August 2024. 

**Includes IKEA stores and other customer meeting points in IKEA retail, as well as distribution centres, offices, etc. under the IKEA Brand. Emissions from customer travel to stores have been excluded from the Net Zero inventory as per the SBTI evaluation of Inter IKEA Group’s Net Zero goals. 

***IKEA retail and other operations covers all IKEA operations (stores, warehouses, offices, etc.) owned by Inter IKEA Group and the IKEA retail business of each of the IKEA franchisees. It does not include IKEA owned factories by IKEA Industry and packaging and distribution units by IKEA Components, since these are reported in production. 

In preparation for CSRD-compliant reporting from FY26, going forward our sustainability reporting will undergo changes. The CSRD framework begins with a double materiality assessment, and based on the assessment of ESG topic materiality, future sustainability statements will be reported alongside financial data, analysing the impact of operations on people, the planet, and financial performance.