IKEA Group is fully committed to renewable energy, waste reduction, and more. Stefan Sjöstrand, the company’s Canadian president, walks us through the instructions.
IKEA is more than just a household name, it is a world leader in sustainable business practice, with a commitment to be energy independent in its operations worldwide by 2020. In Canada, it’s already reached that goal, following its purchase of a wind farm in Alberta. The company has also installed solar panels on three of its Ontario stores, and has installed electric vehicle charge points in all of its stores’ parking lots.
For our Countdown to GLOBE series, we spoke with IKEA Canada president Stefan Sjöstrand. He’ll speak in the session on “Culture Capital: Empowering Employees to Drive Change.”
Tell me about the new store you have just announced for Halifax.
We’re planning to have the largest rooftop solar power installation of any IKEA store in Canada, a 624 KW system. We’ll also have a geothermal system to provide most of our heating and cooling needs, through 120 holes in the ground to allow for geothermal heat exchange. We’ve also planned for a few small-scale wind turbines on the light posts in the parking lot, which will help, in a smaller way, offset energy use in the store whenever that resource is available and show our commitment to renewable energy. This IKEA store will have a drastically lower energy footprint than the stores that have come before it. Our goal is that each new store we will open will always at the forefront, we are trying to be more energy efficiency and sustainable in every store opening.
Your company is really embracing the shift to a low-carbon energy economy globally but also here in Canada. What kind of returns are these investments generating, to both the brand and the bottom line?
Renewables are always a win-win—they are good for the environment, of course, but also good for our chief financial officer, because we make money on them which we’re able to reinvest in the business and provide benefit to the customers. It’s really important that leaders don’t see renewable systems as a cost, because they are investments. Once you have made the capital investment, the sun and the wind are free and always will be.
Across the company, we have decided to become energy independent by 2020 and we’ve already reached that goal in Canada. And IKEA, when we do things we go “all in,” we don’t go for 80 or 90 percent, we go to 100. That’s is why we decided to be energy independent by 2020. There are also emerging new technologies, that is something we’re looking into. if you look at the wind farm we bought in Alberta, that was a big investment that is paying us returns. Once again, it’s good for the business and good for the environment. I just don’t understand why other large companies are not seeing renewable energy as a huge opportunity.
Good question, why aren’t they?
I don’t know. But here’s the thing. I really see this GLOBE conference as a good moment to challenge other business leaders. I would like to be part of any meeting with government leaders who might be present to say, “We are doing lot of things, but we think we can do more. Challenge us!” But I would also use my time at GLOBE to really challenge other businesses, to see what they can do.
How does the company share the lessons learned from clean energy and sustainability experiments tested in other markets—for example, retailing solar panels in the UK—and what factors influence whether you try them in other markets? What lessons from Canada are you sharing out to other arms of the company?
Before I came aboard with IKEA Canada, I was working in IKEA France. We tried full product take-back programs for products that have reached their end of their useful lives. We tried that out there, and it worked very well. In Canada, we have 27 million visitors a year. Just imagine that five percent want to come back with product. That would be well over one million customers that come back. That would be really really huge, and we’re just not ready, it would at this point be prohibitive. But we have done it in Belgium, and in France.
Meanwhile, in the U.K. we are selling solar panels direct to the consumers. We have done that for two-and-a-half years We had a few supplier issues with the solar, but it’s resolved now. Not that that’s worked out, that’s something we will investigate about introducing in Canada.
But Canada differs from German and Sweden and other markets because energy policy is largely led by the provinces. Here in Ontario, we have the feed in tariff that provides for a government incentive for rooftop solar, but that’s not in any other province. I’m not sure how we explain to consumers that it only works there and not in our other provinces, or why we might have one price in Alberta and a different price elsewhere.
We test things a lot at IKEA. We have to make sure that when we launch things we don’t have a negative reaction from our customers.
Solar panels on stores are great, but where do you see IKEA making the biggest difference?
Our strategy is called People and Planet Positive—the first pillar is, we say we want our customers to live a more sustainable life at home. We have around 900 million visitors worldwide. If we could have an impact on these customers to live a more sustainable life at home, we will have a huge impact. And we are having an impact.
Your sustainability chief attracted some attention for his recent “peak stuff” comment. What is your philosophy on the circular economy and extended producer responsibility? Could an operation as large and complex as IKEA ever be a cradle-to-cradle operation?
That was Steve Howard, our global head of sustainability, and he made that comment in a panel debate, and one journalist picked up and ran with it but without the context of the bigger conversation.
If you look at the world of finite resources, and the challenge of climate change new approaching, we clearly need new approaches so that our needs can be met while staying within ecological limits. We have a big job to do. Because our furniture is affordable, some people think it is not long-lasting, and this is an impression that we must change. Also, our furniture is produced and transported in very resource efficient ways, so when you look at the full picture our products are more sustainable than this perception.
And I am very proud of that. If we truly believe in a circular economy, then we need to work with this idea in different parts within the company. We have had take back programs for many years, while customer can do waste sorting out in stores - especially for household batteries and light bulbs for example. We also recycle everything in the stores. When you come and eat in the restaurant, and take a napkin it is made out of paper that was made from recycled cardboard gathered in our stores. We have a mattress take back program as well.
So we are doing a lot of things. We are far from the best, but we try, and we try to improve all the time. That is my message and the intention when Steve Howard made that comment, when you put in a context of everything else we are at that peak period where we must change our behaviours, because we simply cannot continue as we have done in the past.
The philanthropic arm of your parent company, the IKEA Foundation, has targeted significant resources to help communities impacted by climate change. In your view what is the obligation of the private sector when it comes to communities where you make your products?
We really want to support both people and communities where we impact them, that is one of the change drivers of of our People and Planet strategy. Today we are the biggest corporate contributor to UNICEF and Save The Children. Our funding is directed to support children’s education in some of the most vulnerable communities on Earth. It’s very important for us to create opportunities in communities where our factories are located, to ensure sure we don’t help create a situation where children in those communities have to seek work. So far, we have provided more than $140 million CAD to UNICEF and Save the Children.
What do you hope to get out of GLOBE?
We want to really raise the voice of IKEA, and send the message that we want to take leadership in the sustainability landscape in Canada. Also, I’m so supportive of the new direction we are seeing from the federal government here in Canada and I want to recognize that and encourage others to follow our lead. It is about shedding more light on all the things we are doing. I am very proud of our work on sustainability, and would like challenge others to take up leadership as well.
IKEA Canada president Stefan Sjöstrand will be speaking at GLOBE 2016 on “Culture Capital: Empowering Employees to Drive Change.” Register now.