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One of the world’s largest furniture retailers, Ingka Group—best known as IKEA’s largest franchisee—has pledged to eliminate fossil fuels from its operations within the next six years. The company has announced an ambitious €1.5 billion investment to accelerate its transition to sustainable practices.
Focusing on energy efficiency and renewable heating and cooling technologies, Ingka Group aims to slash its operational climate footprint by 85% by 2030, using 2016 as the baseline. This bold commitment builds on its existing €7.5 billion investment in offsite renewable energy production and technologies.
“Ending our reliance on fossil fuels is essential to tackling the climate crisis and halving global emissions by 2030. At IKEA, we started our journey” in 2009 and have invested heavily in both onsite and offsite renewable energy production to enable the transition,” according to Jesper Brodin, CEO of the Ingka Group. “We have reduced emissions across our IKEA stores by 60.4% since 2016, and 96% of our retail sites now use renewable electricity.”
“The future of energy must be renewable, and this additional investment will enable us to reduce our carbon emissions, increase efficiency and lower costs in the long term. It’s also a win-win for business.”
Jesper Brodin, CEO of Ingka Group
As part of its dedication to the Paris Agreement, Ingka Group aligns with Science-Based Targets (SBTi) to drastically reduce greenhouse gas (GHG) emissions and phase out fossil fuels. Efforts to power all retail operations with 100% renewable electricity have reduced overall emissions by 24.3%, even as revenue has grown by 30.9% since 2016.
This latest €1.5 billion investment is a step toward fully decarbonising Ingka Group’s operations and value chain. It will fast-track retrofitting IKEA stores with energy-efficient upgrades and renewable heating and cooling systems. All newly constructed units will be built with these technologies, and work is underway to retrofit 150 existing locations.
“Transitioning to renewable heating and cooling is a vital enabler on our decarbonisation journey; however, it’s a complex and costly process. This investment means we can progress further and faster with our plans – and we know it will pay off in the long term”, said Karen Pflug, Chief Sustainability Officer, Ingka Group.
These efforts complement the group’s ongoing €7.5 billion commitment to offsite renewable energy. Ingka Investments, the company’s investment arm, has already allocated more than €4 billion to renewable energy projects, positioning it as a significant player in green energy production.
“As businesses, we have an important role in phasing out fossil fuels, but we cannot do it alone. We welcome the COP28 pledges on renewable energy and energy efficiency and consensus on transitioning away from fossil fuels. To move from pledges to impact, governments and businesses must combine efforts to address obstacles, such as complex and inefficient policy, permitting and reporting frameworks. We have five years left to deliver to the Paris Agreement – with the right commitment and leadership, we have it in our hands.” Jesper Brodin adds.
To support a broader societal shift toward sustainability, Ingka Group calls on governments to take decisive action by:
- Rapidly scaling renewable energy targets and incentives while phasing out fossil fuels and related subsidies.
- Investing in modernised grid infrastructure capable of supporting distributed renewable energy and widespread electrification.
- Strengthening energy efficiency regulations across all sectors.
- Simplifying permitting processes for renewable energy projects and infrastructure, ensuring fair transitions and community involvement.
- Encouraging and incentivising retrofitting and renovating commercial and residential buildings, including insulation, heating and cooling systems, and energy storage technologies.
Ingka Group seeks to transform its operations and climate action across industries and societies through these combined efforts.
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