Our view on wood supply chain due diligence
At IKEA we believe in taking social and environmental responsibility throughout our supply chain, as well as being transparent about how we work. For our wood supply, we deploy a comprehensive due diligence system to secure that the wood we use in our products meets our strict requirements and legal obligations, which includes being able to trace where the wood comes from. Under no circumstances do we accept wood that does not meet our requirements. If we discover irregularities, we take immediate action.
As a part of the IKEA due diligence system, during the fall of 2020, IKEA wood supply and forestry specialists proactively performed a routine audit at a supplier in China. The audit discovered falsified documents related to the origin of the wood. Besides being unethical, the misconduct by the supplier constitutes a clear violation of our requirements and goes against the foundation of our business model and values. This is completely unacceptable and, we moved quickly to address it. Our customers should be able to trust that our wood is responsibly sourced, and we are sorry and troubled by this event.
IKEA supply organisation launched a full investigation into what has taken place, which resulted in the termination of the business relationship with the supplier. We have also stopped sales of the affected products. Despite being fully functional and safe to use, the 95 different birch-based products manufactured by this supplier do not live up to our standard and promise towards customers, as we cannot verify the wood origin. During FY20, the unverifiable wood used by the supplier equates to 0.28% of our total wood consumption.
Across the world we work with approximately 1000 home furnishing suppliers and many more sub-suppliers. We work closely with our suppliers and have high trust with all of them. However, if we find any irregularities everyone is treated the same way. If the case warrants it, we will not hesitate to terminate the business or take legal action. Although what has happened here is serious it is important to underline that it is a very rare occurrence. We will continue to proactively monitor and follow up our requirements across our total wood supply chain.
As a large consumer of wood, we take our responsibility very seriously. We consciously work to use our scale and global reach as a driver for positive change, particularly in regions facing challenges. To achieve this, we remain committed to investing in specialist competence. Today, IKEA employs a global team of approximately 40 wood supply and forestry specialists. The team works to ensure that the wood which enters our supply chain meets our strict requirements and that we strongly contribute to the further development of responsible forest management around the world.