IKEA has reached a significant milestone in its decarbonization journey, increasing the share of renewable electricity in its production to 75% in 2024, up from 71% the previous year. This achievement is a key step towards its goal of 100% renewable electricity in production by 2030 and highlights a strategic approach to supplier engagement that other corporates can learn from. It also follows on from a significant investment in decarbonizing heating and cooling, further strengthening IKEA’s commitment to sustainability.
The organization’s renewable electricity programme was initially launched in 2021 to assist suppliers in purchasing renewable electricity from the grid, particularly in markets with limited access. By pre-negotiating prices and securing agreements - such as bundled frame agreements and power purchase agreements (PPAs) - IKEA helps suppliers overcome market barriers and transition to cleaner energy sources more cost-effectively.
The scheme will now broaden further to include 14 additional markets, including Japan and the United States, bringing it to a total of 27. With this expansion, the programme will now cover more than 90% of CO2 emissions from electricity used in IKEA’s production and is already proving to have positive impacts. Notably, suppliers in China and India, which were part of the programme from the start, have already achieved substantial emissions reductions of 87% and 49% respectively between 2020 and 2024. The current share of renewable electricity in production now stands at 92% in China and 69% in India.
IKEA’s model provides a useful blueprint for other organizations looking to accelerate their renewable energy adoption, especially those with complex supply chains. Aggregated procurement helps suppliers access cost-effective renewable power while targeting high-impact geographies maximizes emissions reductions. Furthermore, by actively engaging suppliers IKEA has strengthened business relationships which helps to ensure resilience against regulatory shifts. This underscores the importance of collaboration and leveraging collective purchasing power to target key markets in driving impactful change. However, renewable electricity is just one part of the equation - firms must take a holistic approach to net zero strategies, addressing emissions across their entire value chain.
To learn more about IKEA’s sustainability initiatives, read the IKEA Sustainability Strategy and the IKEA Sustainability Report FY24.
