Ikea’s new $1 billion recycling investments support its ‘fully circular’ target for 2030
The funding from Ikea’s investment arm shows a more refined focus to "future proof" its business, executives say. Read More
Ikea’s investment arm will invest more than $1.03 billion into recycling infrastructure companies, including for plastic goods and mattresses, the company shared Jan. 15. This circular economy push reflects a refined focus in Ingka Group’s sustainability strategy as it pursues a “fully circular” target by 2030 and an offset-free net zero goal for 2050.
“To future proof our business we want to invest in financially and environmentally resilient companies,” said Lukas Visser, circular investments portfolio manager at Ingka Investments, in a Jan. 15 statement. “Ingka Investments is committed to transitioning towards a circular economy and retaining the value of materials. For us, that means investing in companies that are developing technology or growing capacity to prevent waste or supply recycled materials.”
Ingka Investments held assets under management of roughly $20.61 billion in 2022. In November, it announced a massive $1.55 billion of investment toward phasing out its direct use of fossil fuels.
The investments
Ingka named three recipients of the funding in Europe: RetourMatras; Morssinkhof Rymoplast; and Next Generation Group.
RetourMatras of Bodegraven, Netherlands: Founded in 2009, the business is expanding across Europe and the U.K. from its four recycling facilities. It recycles polyeurethane foam into a raw material for mattresses called repolyol. Ingka’s 2019 investment in RetourMatras by 2021 enabled the startup to recycle the equivalent of all the 1.5 million mattresses discarded in the Netherlands each year. And if all 40 million mattresses discarded in Europe were recycled, it would prevent the release of 3 billion kilograms of CO2, according to RetourMatras.
Morssinkhof Rymoplast of Lichtenvoorde, Netherlands: With 11 recycling centers, the company buys plastics from post-consumer and post-industrial sources and recycles them into raw materials. Founded in 1960, the company specializes in high-density polyethylene (HDPE), low-density polyethylene (LDPE), polyethylene terephthalate (PET) and polypropylene (PP) plastics. The business doubled its recycling capacity to 515,000 tonnes per year with help from by Ingka, according to the companies. Ingka acquired a 15 percent stake in 2017, the year IKEA launched a circular economy strategy.
Next Generation Group of Feldkirchen an der Donau, Austria: Ikea has previously invested in the company, which since 1996 has provided equipment to the plastics recycling industry. PET plastic, common in water bottles and other packaging, is a special focus.
Circular economy push
To become “fully circular” by 2030, Ikea is gunning for long-lasting products that are either manufactured with renewable or recycled materials; easy to take apart, repair and recycle. In addition:
- The retailer last summer created an online peer marketplace for its used furniture. IKEA Preowned launched in Madrid and Oslo.
- The Buy Back & Resell program provides store credit to customers who bring in used Ikea furniture, which the company can resell. Repair efforts include services to help customers fix products, and readily available spare parts.
- Ikea is investing in recycled plastics, biobased materials and circular textiles. Its MÅLA Crayons use industrial waste. Recycled PET bottles and wood comprise parts of its Kungsbacka kitchen fronts.
- Phasing out single-use plastics falls within waste reduction goals, including having half of all materials renewable or recycled by 2025.
The net zero by 2050 target is on track, according to Ingka Group. For example:
- Ikea reduced its climate emissions across Scopes 1, 2 and 3 by 12 percent between 2022 and 2023. Scope 3 emissions made up 99.3 percent of the total footprint in 2023.
- It also shrank by 52 percent, over a 2016 base year, the emissions embedded in the products its customers use. The goal is 70 percent by 2030.
- Keeping prices on “sustainable living” goods low helps that effort. To that end, Ingka Group invested $2.16 billion in thousands of products, from heat pumps in Sweden to solar panels in California, in the 2024 financial year.
The business
The brand known as Ikea is part of a complex corporate structure. INGKA Group owns about nine in 10 Ikea stores, while others are franchised. Inter Ikea Group manages the Ikea brand and the franchise system.
Ingka Investments, which falls under INGKA Group, backs renewable energy, real estate and startup efforts that support both INGKA and Inter Ikea.
[Gain insights to move beyond incremental action and accelerate the shift to a circular economy at Circularity, April 29-May 1, Denver, CO.]
