IKEA To Help India Suppliers Go Green By Enabling Shift To Renewable Energy

IKEA, the 35.2 billion Euro (Rs 313,000 crores) Swedish home furnishing retailing major has announced a programme for its suppliers in India, Poland and China where it will help them transit to 100 per cent renewable electricity. Almost 1,600 direct suppliers will be covered under this move, IKEA said in a statement. In India, In India, IKEA currently has 48 suppliers with about 45,000 direct employees and about 400,000 people in the extended supply chain. It sources approximately 330 million Euros worth of goods from India each year.

A part of the Ingka group in Sweden, Ikea has been pushing to become 100% renewable energy powered worldwide, and climate positive by 2030. IKEA India opened its first retail store in Hyderabad in August 2018 and second store at Navi Mumbai, Maharashtra in December 2020.

By switching to renewable electricity, these suppliers will save 670,000 tonne of emissions per year, which is equivalent to approximately 3 per cent of the total climate footprint of the IKEA value chain, it added.

“The programme will be introduced in 2021 for suppliers in Poland, China and India, who represent three of IKEA’s largest purchasing countries, followed by a stepwise global rollout,” it said.

“India is one of IKEA’s largest purchasing countries, and we are excited to adopt this programme in this market,” said Henrik Elm, Global Supply Manager, Inter IKEA group.

“We have a long-term perspective and the financial strength to invest in activities and support our suppliers to have a positive impact on people and the planet. By working together, we can make renewable electricity both more affordable and accessible,” he added.

Presently, IKEA has implemented 51 per cent renewable energy consumption in its stores, offices, warehouses, factories, and other operations. Like other major retail firms, it is looking at options from renewable energy to converting its transport fleet to electric, to reduce its carbon footprint.

“The goal is to reach 100 per cent renewable electricity in 2025 and by 2030 secure that all remaining energy, such as heating and cooling, in renewable as well,” it said.

IKEA plans to help its key suppliers access renewable energy as they may not be able to do it themselves. Thus, be it power trading, or standing guarantee for OPEX models, or even supporting with initial funding support, all options are on the table as the Swedish retail giant cleans up its supply chain. Either way, the corporate and industrial segment, including rooftop, needs all the help it can get from firms to maintain growth and clean up India’s power sector. Especially at a time when growth in the preferred utility solar option is stagnating.