IKEA’s parent company invests 1.5 billion euros to promote the transition to renewable energy and strive to reduce emissions by 85% before 2030

Ingka Group, the world’s largest IKEA retailer, has announced that it will invest €1.5 billion to accelerate the comprehensive transition to renewable energy. This plan aims to help the company achieve its goal of reducing the climate footprint of its own operations by 85% by 2030 compared to 2016, and contribute to solving the global climate crisis.

Jesper Brodin, CEO of Ingka Group, said: Breaking away from dependence on fossil fuels is key to tackling the climate crisis and halving global emissions by 2030. We have been working on this since 2009, driving the transformation through significant investment in renewable energy both on and off site. To date, we have reduced emissions in IKEA stores by 60.4%, with 96% of our retail sites running entirely on renewable electricity. The future of energy must be renewable and this additional investment will not only help us further reduce carbon emissions, but also increase efficiency and reduce long-term costs, which is a win-win situation.

Focus on energy transformation and facility upgrades

The investment will accelerate energy efficiency retrofits in existing IKEA stores, as well as upgrades to renewable heating and cooling systems. All new facilities will be fully equipped with renewable energy technology, and 150 existing facilities have already started retrofit programs.

Karen Pflug, Group Sustainability Director at Ingka, said: Advancing renewable heating and cooling is an important step in our journey to reduce emissions, but it is a complex and costly process. This investment will help us accelerate the realization of our plans and we believe it will bring us considerable benefits in the long run.

Strengthen renewable energy production capabilities

The investment is a continuation of a previously committed €7.5 billion program. To date, Ingka Investments has invested more than €4 billion in off-site renewable energy projects and has successfully positioned the company as a mid-sized renewable energy producer.

Promote cross-border cooperation to address climate challenges

Jesper Brodin calls on governments and businesses to work together to turn climate commitments into practical actions. He stressed that the government should quickly promote policy reforms and streamline relevant processes to overcome institutional barriers to climate action. He said: As businesses, we have an important responsibility in phasing out fossil fuels, but we cannot do it alone. We welcome the COP28 commitments on renewable energy, but moving from commitments to action will require governments and businesses to work together. With just five years left to meet the Paris Agreement goals, we must work together to achieve our commitments.

Policy recommendations

Ingka Group calls on the government to take the following actions:

Emission reduction achievements and future goals

The Ingka Group’s climate footprint covers Scope 1 and 2 (own operations) and Scope 3 (upstream and downstream value chain) emissions. From fiscal 2016 to fiscal 2023, the company reduced its overall climate footprint by 24.3%, while revenue grew by 30.9%, proving that sustainability and business growth go hand in hand.

This €1.5 billion investment marks a new milestone in Ingka Group’s transition to renewable energy. As an important part of IKEA's sustainability goals, this move not only solidifies its leadership in global climate action, but also sets an example for other companies.

Zhang Xiaocheng, a sustainability consultant at Scienjoy Sustainability Consulting Services, believes that Ingka Group’s achievements in the field of renewable energy development, in addition to providing excellent template references for other large enterprises, are also very important in their appeals to the government, especially in optimizing the national grid infrastructure and promoting energy efficiency regulations. Taiwanese society and government are currently actively promoting energy transformation and carbon reduction issues. However, in recent years, the issue of optimizing the national grid infrastructure has often been discussed by the public. In addition, Taiwan occupies an extremely important position in the electronics manufacturing industry. Stable energy supply, energy transformation, and carbon reduction issues will be a big challenge if they are to go hand in hand. However, the Inkga Group has proven that heavy investment in energy efficiency transformation will not affect revenue and business development. This move is also a shot in the arm for other companies. On the other hand, it also encourages the government and companies to cooperate in the development and investment of renewable energy.