IKEA's Social and Environmental Responsibility Initiatives

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Case Details:

Case Code : BECG058
Case Length : 22 Pages
Period : 1997-2005
Pub. Date : 2006
Teaching Note :Not Available
Organization : IKEA
Retail - Furniture
Countries : Sweden, US, China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Social Responsibility

IKEA undertook several projects for community development. Most of its projects were centered on children. IKEA purchased carpets from India. In August 2000, IKEA initiated the Child Rights Program in India in association with UNICEF. The project was started in the Indian state of Uttar Pradesh (UP). The aim of the project was to prevent child labor in 'the carpet belt' of UP, by addressing root causes such as poverty, illiteracy and ill health. The project was started in nearly 200 villages with a population of more than 400,000 people...

Environmental Responsibility

After the formaldehyde incident came to light, IKEA took a fresh look at its stand on environmental issues. In 1989, Anders Moberg (Moberg), the then president of IKEA instructed Johnson to identify environmental issues that were relevant to IKEA and conversely how IKEA impacted the environment.

Moberg told Johnson, "Environment is not just a new fashion, it will not fade away, it is the new reality and we have to adapt to it."

Johnson, in association with Karl-Henrik Robert initiated The Natural Step (TNS) environmental program in IKEA in 1990 (Refer Exhibit IV for more information about the TNS). IKEA's environment policy was based on TNS...

Transportation and Distribution

IKEA depended heavily on transportation through trucks and trailers for the distribution of its products to its stores and also for delivering furniture from stores to its customers' homes. The company's transportation and distribution activities thus had a significant impact on the environment through emission of gases like carbon dioxide into the atmosphere (Refer Exhibit VII for CO2 emissions in IKEA's transport and distribution operations). One of the first initiatives IKEA took to reduce environmental impact of transportation was to introduce smart packaging. Packing more products into a single trailer was not easy...


According to IKEA, about 75% of the raw materials for its furniture, catalogs and packaging came from timber. Hence, conservation of forests was an important environmental issue. IKEA worked with groups such as Greenpeace to formulate policies for sustainable forestry. IKEA was also a member of the Forest Stewardship Council (FSC). As a result of consultations with these organizations, IKEA banned the usage of timber from intact natural forests, except those forests that had been certified by the FSC in its products, in November 1999. IKEA's ultimate aim was to source all its timber from well-managed forests...

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