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IKEA Sees Sales of Green Products Soar, Sales Exceed $1 Billion in 2014

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Multinational home products company IKEA, known for its assemble-it-yourself furniture, reported that it sold $1.13 billion worth of sustainable products last year. That included items that saved or generated energy, helped people lead healthier lives, or reduced waste use and waste production, according to the IKEA 2014 Group Sustainability Report. It was an increase of 58 percent over 2013.

“Through our People & Planet Positive strategy, we want to make IKEA completely sustainable," said Steve Howard, IKEA Group's chief sustainability officer. Photo credit: IKEA Group

"Our customers also tell us they care about climate change and want to live more sustainably," said IKEA group CEO and president Peter Agnefjäll. "Through the amount of visitors in our stores and online, we have unique possibilities to inspire and enable millions of people to live a more sustainable life at home by offering sustainable and energy-saving solutions, affordable to all."

IKEA did this while posting strong sales figures. In 2014, its sales increased 5.9 percent from 2013 to $32.1 billion.

The company's commitment to sustainably sourced products encompassed several areas. It's one of the world's biggest consumers for wood in the retail sector and it's also become one of the biggest customers for Forest Stewardship Council (FSC)-certified wood, referring to wood that was harvested sustainably. More than 40 percent of the wood the company sold in 2014 was FSC-certified or recycled. In addition, about 75 percent of the lighting products it sold last year were LED or LED compatible, and by September of this year, IKEA will only sell LED lighting. More than 75 percent of all the cotton in products it sold in 2014 was from “more sustainable sources," that is, made with decreased chemical and water use by the growers and suppliers.

“Through our People & Planet Positive strategy, we want to make IKEA completely sustainable," said Steve Howard, IKEA Group's chief sustainability officer. "I’m proud to say that we’re making good progress in transforming the supply of key materials, with over ¾ of our cotton and 41% of our wood now from more sustainable sources, and we’re investing in renewable energy to bring us closer to our goal of being energy independent. And by making energy-efficient LED affordable and attractive, we’ve enabled millions of people to live a little more sustainably.”

One of its signature initiatives in 2014 was the completion of its rollout of home solar panel sales in all 18 of its UK stores. It's currently expanding the offer to its stores in Switzerland and the Netherlands and has plans to add six more countries in the next several years.

The company's commitment to sustainability extends beyond the products it offers for sale.

"We also want our own operations to be sustainable, and we have a goal to become resource and energy independent," said Agnefjäll. "By 2020 we will produce as much renewable energy as we consume in our operations. We already produce energy from our own renewable sources equivalent to 42 percent of our total consumption."

In the works for IKEA are 224 wind turbines intended to move the company toward producing all its own energy. Image credit: IKEA Group

"Climate change is possibly the greatest challenge of our time," says IKEA's Sustainability Report. "Tackling it gives us the opportunity to innovate and lead by example.By the end of 2015, we aim to have invested and committed to invest EUR 1.5 billion in renewable energy projects, mainly wind farms and photovoltaic solar panels installed on our buildings. We have already committed to own and operate 224 wind turbines around the world and have installed 700,000 solar panels on our buildings."

Last year, IKEA invested in its first U.S. wind farm, its largest renewable energy investment so far. When it is up and running, it will produce a third of the energy used by all its stores, distribution centers and factories in the U.S. And its Suppliers Go Renewable project works with its suppliers to help them save energy and use more renewable energy. It worked with 4o groups of suppliers in 2014 and is expanding that number.

Agnefjäll and IKEA's chief sustainability officer Steve Howard demonstrated their engagement in environmental issues by participating in the People's Climate March and participated in the Clinton Global Initiative plenary session in New York September. “It was truly great to see all the people out on the streets of New York," said Agnefjäll. "There can be absolutely no doubt what direction they want policy makers and businesses to take.”

IKEA CEO/president Peter Agnefjäll and chief sustainability officer Steve Howard participated in the People's Climate March in September. Photo credit: IKEA Group

"It was the first time IKEA has ever participated in this kind of global climate change campaign, and we plan to be involved in more of the world’s most important debates on climate change," says IKEA's sustainability report.

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Protestors marched outside the Prudential Center in Newark, New Jersey on Monday, August 26, during the MTV Video and Music Awards to bring attention to the water crisis currently gripping the city. Karla Ann Cote / NurPhoto / Getty Images

By Will Sarni

It is far too easy to view scarcity and poor quality of water as issues solely affecting emerging economies. While the images of women and children fetching water in Africa and a lack of access to water in India are deeply disturbing, this is not the complete picture.

The city of Flint, Michigan, where dangerous levels of pollutants contaminated the municipal water supply, is a case in point — as is, more recently, the city of Newark, New Jersey.

The Past is No Longer a Guide to the Future

We get ever closer to "day zeros" — the point at when municipal water supplies are switched off — and tragedies such as Flint. These are not isolated stories. Instead they are becoming routine, and the public sector and civil society are scrambling to address them. We are seeing "day zeros" in South Africa, India, Australia and elsewhere, and we are now detecting lead contamination in drinking water in cities across the U.S.

"Day zero" is the result of water planning by looking in the rear-view mirror. The past is no longer a guide to the future; water demand has outstripped supplies because we are tied to business-as-usual planning practices and water prices, and this goes hand-in-hand with the inability of the public sector to factor the impacts of climate change into long-term water planning. Lead in drinking water is the result of lead pipe service lines that have not been replaced and in many cases only recently identified by utilities, governments and customers. An estimated 22 million people in the US are potentially using lead water service lines. This aging infrastructure won't repair or replace itself.

One of the most troubling aspects of the global water crisis is that those least able to afford access to water are also the ones who pay a disproportionately high percentage of their income for it. A report by WaterAid revealed that a standard water bill in developed countries is as little as 0.1 percent of the income of someone earning the minimum wage, while in a country like Madagascar a person reliant on a tanker truck for their water supply would spend as much as 45 percent of their daily income on water to get just the recommended daily minimum supply. In Mozambique, families relying on black-market vendors will spend up to 100 times as much on water as those reached by government-subsidized water supplies.

Finally, we need to understand that the discussion of a projected gap between supply and demand is misleading. There is no gap, only poor choices around allocation. The wealthy will have access to water, and the poor will pay more for water of questionable quality. From Flint residents using bottled water and paying high water utility rates, to the poor in South Africa waiting in line for their allocation of water — inequity is everywhere.

Water Inequity Requires Global Action — Now.

These troubling scenarios beg the obvious question: What to do? We do know that ongoing reports on the 'water crisis' are not going to catalyze action to address water scarcity, poor quality, access and affordability. Ensuring the human right to water feels distant at times.

We need to mobilize an ecosystem of stakeholders to be fully engaged in developing and scaling solutions. The public sector, private sector, NGOs, entrepreneurs, investors, academics and civil society must all be engaged in solving water scarcity and quality problems. Each stakeholder brings unique skills, scale and speed of impact (for example, entrepreneurs are fast but lack scale, while conversely the public sector is slow but has scale).

We also urgently need to change how we talk about water. We consistently talk about droughts happening across the globe — but what we are really dealing with is an overallocation of water due to business-as-usual practices and the impacts of climate change.

We need to democratize access to water data and actionable information. Imagine providing anyone with a smartphone the ability to know, on a real-time basis, the quality of their drinking water and actions to secure safe water. Putting this information in the hands of civil society instead or solely relying on centralized regulatory agencies and utilities will change public policies.

Will Sarni is the founder and CEO of Water Foundry.

Note: This post also appears on the World Economic Forum.

Reposted with permission from our media associate Circle of Blue.

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