The "Sustainability at IKEA Group" case study assesses the People and Planet Positive sustainability plan of the company. It discusses the program concerning its being aligned to IKEA's business model.
V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain, Jerome Lenhardt
Harvard Business Review (515033-PDF-ENG)
September 02, 2014
Case questions answered:
- How would you assess IKEA Group’s People and Planet Positive sustainability plan? Is the plan likely to help the company transform its business? Are the plan’s targets too limited, appropriate, or too ambitious?
- How do you feel about the progress IKEA Group has made implementing the plan?
- How does IKEA’s sustainability strategy align with its business model? What are the overlaps? What are the conflicts?
- Which option(s) should IKEA Group pursue to address IKEA’s Wood Supply Chain sustainability? Which has the highest leverage for IKEA?
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Case answers for Sustainability at IKEA Group
1. How would you assess IKEA Group’s People and Planet Positive sustainability plan? Is the plan likely to help the company transform its business? Are the plan’s targets too limited, appropriate, or too ambitious?
The strategy for sustainability at IKEA Group, ‘people and planet positive,’ aims at meeting the needs and interests of many people and the society while protecting the environment. The strategy is intended to also improve the quality of life of people and communities within the planet limits.
The company is committed to the right working conditions, uses resources efficiently, and recycles waste into resources. It also promotes renewable energy, responsible stewardship of forests, water and farmlands, and a better society that respects human rights across its integrated value chain.
This plan is a significant step towards transforming business, innovations, and creating new business opportunities and leading the change in society. The idea to make more sustainable products (energy-efficient LED lighting) and provide affordable solutions are likely to benefit the consumers, environment, and society in saving money, time, and living an exciting life. Similarly, IKEA will be able to achieve competitive advantage through its access to important raw materials, improved relationships with co-workers and customers, develop and maintain supplier base, and increased productivity.
The targets of the sustainability plan at IKEA Group are ambitious because they pertain to all aspects of business and adding value. IKEA’s success in its business and becoming people and planet positive depends on its ability to enable change throughout its business by; and more critical because they are aimed at creating a positive impact on people and the planet. Also, IKEA has highlighted three key change drivers that will make it possible to achieve the stated targets:
- Inspiring many customers to live a more sustainable life at home. This is by taking the lead in developing and promoting products and solutions that help customers reduce waste and save energy.
- Engaging and involving people and communities, suppliers, co-workers through impactful, relevant, and unique communication.
- Striving for resource energy independence. Sourcing raw materials from more sustainable sources, produce a renewable source of energy, and promote energy efficiency throughout its value chain.
- Taking the lead in contributing to a better life for people and communities by supporting human rights and preventing child labor.
- By August 2017, develop and implement a transparent and reliable system for the responsible recruitment of workers at first-tier suppliers in critical areas…