Ikea’s first New Zealand store will have solar panels on its roof, use natural cooling methods and aim to reduce waste as part of its push for sustainability.
And Karen Pflug, chief sustainability officer at Ingka Group (Ikea’s parent company), is hoping its moves will rub off on other New Zealand retailers.
Ikea launched a Net Zero Transition Plan last month as it continues its push to drive emissions down to meet the targets set within the Paris Climate Agreement, of which Ikea is a signatory.
Those initiatives, including a continued reduction in the use of fossil fuel, a transition to renewable energy, and the development of circular services, are all likely to influence how the business will operate in New Zealand.
“We obviously want to listen and learn and not come in with some arrogance and say, ‘oh, we know better than you guys’,” Pflug said.
“I think listening and learning and really understanding the levers and also what the challenges are because I think probably many of the other retailers aren’t doing it because it’s hard, whereas we can use our size and scale as a force for good.”
All country managers for Ikea are chief sustainability officers and while it might seem symbolic, Pflug believes it helps drive behaviours critical to meeting sustainability metrics.
“If we look at our own operations, even the creation of the store itself, the more efficient we can make it, making sure it’s built in a way that heating and cooling is installed, that’s ideal. We’ve designed it in a way where it will naturally cool itself and use less refrigerants,” Pflug said.
“The best use of energy is the energy you don’t use.”
The New Zealand store is no different as a collection of solar panels will be part of powering the store, with Pflug referencing Ingka Group’s investment arm and its €7.5 billion goal of renewable energy projects globally.
An area she has looked at in New Zealand is waste, particularly the amounts of waste heading to landfill.
She said the level of waste ending up in landfills in other countries where Ikea operates is a lot smaller and she wants to apply learnings from those places to our market.
“How can we work with Government here and policymakers and other retailers because this is not to be competitive, we should all collaborate and then look at how we reduce waste to landfill.”
About 77% of Ikea’s operational waste worldwide is recycled but Pflug said the remaining 23% is the hardest to eliminate.
The same applies to food waste. Ikea’s in-store restaurant is something that differentiates it from other retailers in New Zealand, minus CostCo’s offering, so dealing with food waste as a business and for consumers is critical.
“The two biggest things a consumer can do is eat less red meat and reduce the food waste. That doesn’t mean you have to be vegan, and it’s not about making them feel guilty about eating a steak or whatever, especially in New Zealand.
“We know they love lamb and beef, but it is about just being conscious about ‘when I do eat meat, I eat really good quality meat and I have it less often’. And that’s a big impact.”
Ikea’s New Zealand store will have the staple Swedish dishes featured in its restaurants around the world, namely its Swedish meatballs, but there’s also potential for some special local additions to the menu.
Circular economy initiatives are also an area where Ikea has made direct investments.
The business makes spare parts available to customers, with customers making use of roughly 24 million spare parts such as nuts and bolts in the past year.
There are also potential plans for pre-loved Ikea furniture to be sold within the store.
Another area of the business that’s no stranger to drawing controversy is around its sourcing of wood, particularly pine.
The business has bought over 20,000ha of forest and farmland over the past few years to add to its pine-growing portfolio.
Pflug said the business is making those investments in a sustainable way, particularly acknowledging the work it has done with local governments, local iwi, scientists and experts.
“We always plant more than we harvest and we also are allowing at least 10%, and in some forestland we bought, 50%, is put aside for biodiversity and mixed species and not for harvesting. So we feel like we’re doing the right thing and being really responsible.
“When we have purchased in New Zealand, we’ve always made sure that it’s land that isn’t suitable for profitable good farming. We tend to try and buy forests that already exist because they’re already successful and they’re suitable for the space that they’re in. But where we’re doing afforestation, so planting trees where there weren’t trees before, we will only buy farmland where it is no longer suitable for farming.”
She said all wood harvested by Ikea is Forest Stewardship Council certified and, in many places, the business goes beyond certification to look at closer-to-nature practices in terms of how it harvests.
Ingka Investments previously told RNZ that it was proud its forests could be part of the solution to climate change, but using them as a source for other companies to offset their carbon emissions was “not why we have forests”.
Pflug believes business leaders and stakeholders can be part of leading a more sustainable future, but it needs to be alongside governments and society as a whole.
“It’s been ingrained in our DNA from the start. We had the first environmental policy in the 90s before it was even a thing, and then we’ve had a people and planet strategy for over a decade now, but we update it because times change and the world around us changes.”
She said that while sustainable initiatives are good for the planet, they are also good for business.
Ikea has managed to grow its revenue by 23.7% since it set emissions baselines in 2016, while also reducing emissions by 30%.
Ahead of the New Zealand launch, Pflug wants to make Ikea’s “profits and purpose” narrative clear to consumers.
“If we can get that across to the Kiwi customer that we really do care, you know, we’re not in for a fast buck. We’re here for the long haul, we want to be good neighbours and we want to be a responsible retailer.
“It shouldn’t cost more to live more sustainably, so we really want to bring our life-at-home knowledge, our sustainable life-at-home knowledge, and help customers make better-informed choices. I think there we can have a point of difference.”
Ikea is set to launch in late 2025.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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