CORPORATE SOCIAL RESPONSABILITY PRACTICES Based on the Sustainability report of FY 2016 ANA MARIA ROIBAN BOGDAN ISTRATE CAMILLE THEPAUT CATALIN… [601500]

CAEN, 2ND YEAR , TEAM 2

CORPORATE SOCIAL RESPONSABILITY
PRACTICES
Based on the Sustainability report of FY 2016
ANA MARIA ROIBAN
BOGDAN ISTRATE
CAMILLE THEPAUT
CATALIN ANGHEL
CLAUDIU PULPA -PETROVICI
LIVIA NICOLETA DUTU

Ikea is a Dutch multinational corporation of Swedish origin, which focuses on retailing furniture
and low cost household items with modern and contemporary designs.
IKEA was founded in Sweden in 1943 by 17 -year -old Ingvar Kamprad. The name comes from the
combination of the initials of Ingvar and the first letters from Elmtaryd and Agunnaryd, the farm
and the village where he grew up. In 1947, he started to sell furniture and in 1955 IKEA started
to design its own fur niture. IKEA started as a mail order company, but this soon changed and the
first store was opened in Älmhult – later it became the model for all IKEA establishments. IKEA is
regarded as one of the most respected and reliable companies in Sweden and has be come one
of the most popular companies to work for.
Since its beginning, Ikea has faithfully followed its mission – to create a better life for the many
people , and even after seven decades of business with a presence in 28 different markets and
385 stores around the world, the values remain the same no matter the cultural diversity:
 HUMBLENESS AND WILLPOWER – We respect each other, our customers and our
suppliers. Using our willpower means we get things done;
 LEADERSHIP BY EXAMPLE – Our managers try to set a good example, and expect
the same of IKEA co -workers;
 DARING TO BE DIFFERENT – We question old solutions and, if we have a better
idea, we are willing to change;
 TOGETHERNESS AND ENTHUSIASM – Together, we have the power to solve
seemingly unsolvable problems. We do it all the time;
 COST -CONSCIOUSNESS – Low prices are impossible without low costs, so we
proudly achieve good results with small resources;
 CONSTANT DESIRE FOR RENEWAL – Change is good. We know that adapting to
customer demands with innovat ive solutions saves money and contributes to a
better everyday life at home;
 ACCEPT AND DELEGATE RESPONSIBILITY – We promote co -workers with potential
and stimulate them to surpass their expectations. Sure, people make mistakes. But
they learn from them!

The cornerstone for the IKEA vision is represented by the low prices , which also enhance the
business idea and concept. The basic thinking behind all IKEA products is that low prices enable
well-designed, functional home furnishings to be available to ever yone.

About the company

The design of Ikea home
furnishing is seen as a
democratic design . The
creation of a product
concept start with
understanding people’s
everyday needs at home
and continues. Further,
during the development of
the product, attention to
five dimensions is paid –
form, function, quality,
sustainability and low
price. These ideas are closely related to the fact that IKEA's roots have started in Småland,
southern Sweden, where people work hard and live modestly, making maximum use of their
limited resources. Using the Democratic Design principles, IKEA designers scrutinize eve ry
product idea and constantly try to do everything a little better, a little simpler, and always more
cost-efficient.

IKEA IN NUMBERS
Today, IKEA operates 340 stores in 28 countries with 70% of the stores located in Europe. The
best countries for IKEA are Germany and the U.S., which both represent 14% of IKEA Group sales.
Additionally, it has 22 Pick -up and Order Points in 11 countries, 41 Shopping Centres in 15
countries a nd 38 Dist ribution sites in 18 countries (as of 2016 FY).
Ikea received 783 million store visits last year and 425 million shopping centre visits. It offers
roughly 9,500 products, with a renewal rate of approximate ly 2.500 new products each year (as
of 20 16 FY).
For FY2016, IKEA Group total sales amounted to $37.6 billion (EUR 34.2 billion). Total sales
translated into Euro increased by 7.1%. Adjusted for currency impact, total sales increased by
+7.9%. Sales in comparable stores grew by 4.8%. The net profit amounted EUR 4.2 billion.

A CSR PERSPECTIVE
Part of their brand image are your commitments and responsibilities. Thus, for example, they
have an active commitment to the environment, the prohibition of child exploitation in their
producti on or a policy of gender equality with which men and women in the same position charge
the same.

IKEA releases a Sustainability Report annually and it includes the details of IKEA Corporate Social
Responsibility (CSR) programs and initiatives engaged by th e company. Here CSR is referred to as
environmental and social responsibility going beyond legal requirements.
The main focus areas of IKEA’s CSR efforts are the following:

In 2016, the IKEA Group has allocated over EUR 3 billion for sustainability inve stments. This
includes a financial frame of EUR 1 billion, announced today, to secure a long -term supply of
sustainable materials by investing in forestry as well as companies that are active in recycling,
renewable energy development and biomaterial developments. And it includes the EUR 1.5
billion invested in wind and solar energy projects since 2009 and EUR 600 million allocated for
further investments in renewable energy.

product
development
supplier
relations
reduction of
energy use in
production and
transport
location and
sustainable
management
of store
societal
responsibility
leadership and
competence
development

“We design products that meet these criteria, and enable customers to save energy and water, reduce
waste, live more healthily, and save money. We call this our “More sustainable life at home” range, and
we are constantly developing and improving it to meet our goal of a fourfold increase in sales of these
products by August 2020, compared with Fiscal Year 13”.

According to IKEA, they are continuing to improve their
work and production ethic to encompass the elements of
CSR and sustainability through waste reduction , water and
energy saving, money saving and living a healthier life.

The IKEA group showed commitment to going all -in on
climate change not only in their business, but also beyond.
The CEO and CSO (Chief Sustainability Officer) attended the
Paris conferen ce of the United Nations regarding climate
change, along with many other co -workers who turned the
iconic Champs -Elysees into a showcase for renewable
energy and LED lighting. Using a wind turbine, 440 solar panels and 25 human powered
generators they kept 800.000 LED lights lit along the entire avenue. This created a very fun event
where thousands of families joined to keep the generators running through swinging running and
cycling.
Since 2009, IKEA has invested 1.5 billion EUR in wind turbines and solar panels. In 2015, IKEA
group and the IKEA Foundation committed a total of 1 billion EUR to climate action. Out of these,
400 million were committed to support communities most impacted by climate change and 600
million towards investments in renewable ener gy.
In 2015, the entire lightning systems in all IKEA stores were
switched to energy efficient LED bulbs, which can last for up
to 20 years. They also sell these bulbs in the stores and the
company aims to sell 500 million units by 2020.
To promote renewable energy, IKEA has adopted a belief to
show their customers that it can be done: they use solar
panels on the rooftops of the stores, use energy efficient
LED bulbs and provide cheap, sustainable and healthy food.
They want to inspire and help the customers to do the same
at home.
In 2016, IKEA launched offers for solar panels in the Netherlands, Switzerland and the UK, where
they guide the customers all the way from planning and purchase to fitting and maintenance, all
at the lowest possible price. In the following year they aim to expand this offer to nine more
countries.
A more sustainable and healthier life at home

Another aspect of saving energy is creating home appliances that are as energy efficient as
possible at a low price. Many of the appliances that IKEA offers, such as fridges, dish washers,
ovens or washing machines are al A+++ classified.
Another big problem that IKEA addresses is batteries. These objects are very difficult to recycle
and the alternative offered by the company is a rechargeable battery that can be charged up to
1500 times. It saves a typical family up to 75 EUR per year by using these batteries. Charging
stations are also offered by IKEA, which can charge up to 12 batteries at home or a different one
that charges 2 batteries via USB for portability.
This is proof th at IKEA is very oriented towards encouraging people and other businesses to act
towards protecting the environment and switching to more energy efficient and less wasting
products.
There are a total of 1.138 products in the “More sustainable life at home” range – from LED light
bulbs to water efficient taps, indoor gardening equipment, desks and even a bicycle . The sales of
these products are measured to be compared with sales in previous years to allow IKEA to make
an accurate assumption on how far they ar e from the final goal in 2020. In Fiscal Year 16, sales
of these products totalled 1.8 billion EUR, which brought the company to 70% of the way towards
their target. Along with measuring sales, the company uses surveys and studies not only on
customers, bu t also on workers to gain a unique insight into how their products and solutions
can be used to live more sustainably and to improve people’s lives.

RESPONSIBLE SOURCING
For IKEA long -term viability business, protecting the raw materials that go into their
products and ensuring a sustainable supply chain is vital. Their challenge is to use those raw
materials that are recyclable and recycled where they can. Also they go beyond using such
materials, trying to ha ve a positive impact on people and the planet.

.WOOD
Wood is fundamental to IKEA. They are one of the biggest users of wood in the retail sector
globally. Around two thirds of IKEA home furnishing products contain wood and they use paper in
notebooks, napkins, and much of their packaging. In 2016 they use 15.75 million m3 of round wood
Resource and Energy Independence

equivalent which was 2% less than 2015 despite an increase in the volume of products containing wood
sold.
All their wood is sourced in compliance with IKEA Forestry Stan dard. In 2016, 61% of their wood
used in products came from sustainable resources, including 57% from FSC certified and 4% from recycled
sources. IKEA is one of the world`s biggest users of FSC certified wood, purchasing over 9 million m3 which
account for over 3% of global output.
FSC (Forest Stewardship Council) is an international organisation dedicated to promoting
responsible management of the world`s forest. Its certification system has two key components:
 Forest management: Ensures that forests are m anaged to high social, economic and
environmental standards.
 Chain of Custody: Traces wood from forests through processing and distribution, ensuring that no
non-certified material enters the certified value chain.
In 2016, IKEA and WWF worked for increasi ng the levels of wood from more sustainable sources
in priority countries. This way they contributed to certification of an additional 1,8 million hectares of
forest to FSC standards. This area is far greater than they would be needed to meet their wood demand
in these countries (the idea of being forest positive) .

.COTTON

In 2016 all of the cotton used by IKEA came from more
sustainable sources. Of the total amount used in their products
17.8% is recycled cotton. The remaining 82.2% is cotton grown
to the Better Cotton Initiative Standard or farmers working in
other programs like that.
For example in India, they are partnering with WWF
and Gujarat Green Revolution Company to reduce the
environmental effects of cotton farming and improve farmers`
profitability. Through this partnership over 4000 farmers in
nine districts of Gujarat have received training on sustainable
cotton principles. IKEA is also exploring an interactive web -based app that will provide information and
advice on crop management ( irrigation scheduling).

.WATER

IKEA is committed to being water positive -using water as efficiently as possible in our operations,
and promoting good water stewardship throughout and beyond their value chain. For this purpose they
are partnering with WaterAid, local government and local NGO LEAF SOCIETY to support AsianFabricx on
the project WASH (Water, Sanitation and Hygiene) that will reach up to 10.000 people. First it will explain
to everyone in the community about their shared role to protect and maintain the water supply. At the
same time partners will support communities to build 500 households toilets, train 2000 workers at the
AsianFabricx factory to save water and use it safely and share these messages with surroundings schools
and communities. Their report says that it has been already a great response to the first stage of the
project and they are continuing their water stewardship journey with all of their suppliers.

. LEATHER

Every year IKEA use about 3 million m2 of leather in their home furnishing products, including
sofas and rugs. This comes from eight leather suppliers and three hair -on-leather suppliers.
They are working closely with their partners to reduce the environme ntal and social issues that
can be common in leather supply chain, this implies reducing chemicals used in tanning process and
improving traceability .

SUSTAINABILITY PRODUCT SCORECARD
IKEA is using the Sustainability Product Scorecard to measure how sustainable our products are
and to see how well they are moving with their actions.
Criteria of
measurment1. More from less(using lightweight materials and smart design that require fewer resources)
2. Renewable materials
3. Reused and recycled materials
4. Materials from more sustainable sources
5. Recyclability at products` end life
6. Quality
7. Transport efficiency
8. Energy use in production
9. Renewable energy in production
10. Raw -material utilization in production
11. Sustainble life at home(products that enable customers to reduce energy and water use, cut waste and live
a healthier lifestyle.

People are at the heart of everything we do: the suppliers who make our products, our customers, co –
workers and the communities around us.
The aim of Ikea is to create a fully inclusive work environment. This is achieved by liste ning to
their employees needs and by accepting their diversity. The company believes that people should
have access to the same opportunities and treatment regardless of their age, gender identity,
sexual orientation, physical ability, ethnicity, race, nat ionality, religion or any other dimension of
their identity. An inclusive workspace is, of course, built and maintain by co -workers, and Ikea is
educating them to be open and welcome diversity.
In 2016, Ikea re -launched the Ikea Group Policy on Human Righ ts and Equality, which defines its
standpoint on human rights, including its commitment to equality for all people involved in and
affected by its business.
The company is also
trying to establish an
inclusive environment
for refugees and people
with dif ferent sexual
orientation or gender
identity – Ikea became a
member of the
Workplace Pride
Foundation.
Another reference point
in Ikea’s CSR strategy is
represented by the
relationship it has with
the suppliers. IWAY is the
IKEA supplier code of
conduct which sets the minimum requirements on environment, social and working conditions,
ensuring a mutual unde rstanding with the suppliers, and it is a pre -condition for doing business
with the company.

Other key aspects:
 Responsible wage practices – IKEA Group Employment Standards
 Embedding the Children’s Rights and Business Principles – Ikea’s Way of Preventi ng
Child Labour and Supporting Young Workers
 Help in reuniting domestic migrant workers with their children
 Employ home -based workers
A better life for People and Communities

 Partnerships with small -business to co -create unique limited edition Ikea collections
using traditional handicraft methods and materials, and so create sustainable, positive
change in the communities they work

The Ikea Foundation is an independent charitable foundation that oversees IKEA’s global
philanthropy. The Foundation resides in the Netherlands and their funds come fr om the
Stichting INGKA Foundation. They fund dozens of programmes run by large and small
organisations to make life better for children living in extreme poverty.
Their mission is to create substantial and lasting change by funding holistic, long -term
programmes in some of the world’s poorest communities that address children’s fundamental
needs: home, health, education and a
sustainable family income.
The Foundation funds programmes that
focus on children’s four fundamental needs:
a place to call home, a quality education, a
healthy start in life and a sustainable family
income .

„Sustainability is central to the way we work, and one of the cornerstones of our business strategy. To
achieve our ambition of creating a sustainable business that has a positive impact on people and the
planet, we need to bring all of our co -workers on board.
We can have a much greater impact when we work with others. We create strategic partnerships and
listen to our s takeholders to make sure that we are always improving.”

Sustainability is one of the four cornerstones of the IKEA Group direction, ‘Growing IKEA
Together’. The CSO chairs the Sustainability Management Group, which brings together
sustainability managers from the main busine ss areas. Together they review performance against
the targets and make strategic decisions on sustainability in IKEA Group.
Every co -worker is responsible for contributing towards the sustainability objectives and
achieving Ikea’s ambition of becomi ng people and planet positive. The employees meet
customers every day, so they are continuously learning and making their best to understand their
needs. They have the opportunity to inspire and enable people to live a more sustainable life at
home, and to improve the way we work.
Governance & Ethics

The Group Sustainability reports any risks or concerns relating to sustainability to the IKEA Group
Risk Committee, consisting of three members of Group Management. The committee meets
around four time a year. Sustainability risks are handled on different leve ls in the organization.
We also ran sustainability risk assessment pilots in Range & Supply and Purchasing.
Ikea is aware that it cannot achieve all of its goals by itself and it partners with NGOs,
governments, industry organisations and other business t o increase the positive impact on
people and the planet.

BUSINESS ETHICS

 Ethical conduct – Honesty, respect, integrity, and fairness are at the heart of everything we do. It
is essential that our co -workers respect and live these values every day.
 Misconduct – We offer clear guidance on how to manage co -worker misconduct and undertake
regular risk assessments in this area in a regional and national level. If any policy breaches do
occur, we investigate quickly and carefully.
 Anti -corruption – The p rinciples of transparency and fairness are key values of IKEA.
 Training – We train our co -workers on our Code of Conduct, the IKEA Group Standards on Anti –
Corruption and the IKEA Group Policy on Anti -Corruption to ensure they understand how to act on
behal f of IKEA.
 Raising concerns – At IKEA we promote an open culture of trust and honest communications, built
on a foundation of respect and fairness. All co -workers are encouraged, and should feel
empowered, to come forward in good faith and raise any concer n they may have.
 Taxes – We have a strong commitment to manage our operations in a responsible way and to
contribute to the societies where we operate. We want to create a long -term through growth,
customer experience and a positive impact on people and th e planet.

PUBLIC POLICY AND ADVOCACY
The related approach has f our key areas of action:

In 2016, Ikea engaged with local, national and regional g overnments on a range of issues:
 Climate change – strong policies and leadership are needed to mitigate the worst impacts
of climate change.
 Equality – Ikea believe s that everyone should have access to equal opportunities,
whoever they are and wherever they come from.
 Transport – road transport accounts for a fifth of Europe’s carbon emissions.
 Circular economy – Ikea believe s that in a world with limited resources, it must move
away from a linear take, make, waste approach, to a circular use of resources. The contribution
to investment and
growth in societyProduct market
requirementPeople & Planet
PositiveIKEA as a great
place to work

One of the main important component parts IKEA’s CSR strategy is the reporting one, which
updates the stakeholders on the progresses against the objectives that were set out.
The reports covers all wholly owned companies in the Ikea Group, during a financial year.
Regarding the dat a, IKEA Group’s reporting and data collection processes involve many internal
and external stakeholders. The majority of data is collected form primary sources and entered
into reporting systems. Energy -related information is usually obtained from real -time meters at
each site, from invoices or from transport providers.
The primary unit used in energy reporting is MWh. Carbon emissions from own operations and
tier 1 suppliers are typically calculated based on real measured energy and fuel usage, while
mode ls and estimations are used to assess value chain impacts. The calculation of IKEA’s energy
and carbon footprint is made in accordance with the GHG Protocol Corporate Standard using the
operational control consolidation approach, and it is externally assur ed. However, the data may
be affected by uncertainties in scientific knowledge or in the contextual data used in calculations,
especially for Scope 3. IKEA uses emission factors from publically available sources like DEFRA
(2015) and IEA (2015), and from l ocal electricity and heat suppliers. In some cases, data is
estimated, which is indicated in the text. Scope 2 emissions are calculated in accordance with the
GHG Protocol Scope 2 Guidance applying both the market and location based approaches.
The main ob jective is to ensure all information and data is relevant, transparent, consistent,
accurate and complete, and that it provides an objective picture of IKEA Group’s operations. Data
for IKEA stores not owned by the IKEA Group, but by other franchisees, is not covered within the
scope of this report. Information and data on the IKEA catalogue is provided by Inter IKEA
Systems B.V. Any other exclusions are stated in the report.
An another priority is focusing the efforts and reporting according to the three c hange drivers of
the company’s People & Planet Positive strategy. The strategy considers IKEA’s full value chain,
stretching across three change drivers. It is framed within, and is a reaction to, the external
megatrends that the company’s world is facing. All three change drivers are critical to becoming
a more sustainable business within this context.
In developing the strategy, the company consults with stakeholders across the business and
externally, to identify the most important areas. For example, IK EA uses many different raw
materials for IKEA products, all of which have an impact on the environment in some way.
Together with an external organization, the company analysed its value chain and purchasing
volumes for each material to assess where they c an have the greatest impact. The two biggest
materials are wood and cotton. This is where IKEA focuses its efforts and aim to have a positive
impact both in their own supply chain and beyond in the wider industry. There are many other
materials across the value chain, some of which are critical to the health of the planet, which are
also included in the strategy and reporting.
Reporting

In order to create a comprehensive image about the reporting guidelines that are followed when
the reports are made, in the followin g tables will be presented the principles of the United
Nations Global Compact (UNGC).
Human rights
Principle 1 Businesses should support and respect
the protection of internationally
proclaimed
human rights

Principle 2 Business should make sure that they are
not complicit in human rights abuses

Labour
Principle 3 Businesses should uphold the freedom of
association and the effective recognition
of the right to collective bargaining; and

Principle 4 the elimination of all forms of forced and
compulsory labour ; and

Principle 5 the effective abolition of child labour ;
and

Principle 6 the elimination of discrimination in
respect of employment and occupation

Environment
Principle 7 Businesses should support a
precautionary approach to
environmental challenges; and

Principle 8 undertake initiatives to promote greater
environmental responsibility; and

Principle 9 Encourage the development and
diffusion of environmentally friendly
technologies.

Anti -corruption
Principle 10 Businesses should work against
corruption in all its forms, including
extortion and bribery.

As a company that values its CSR strategy, IKEA sets objectives tied to its commitments. At the
reporting moment, they report what is the fulfilment stage of that objectives. In the following
tables, there are some of commitments and goals of the company.

Commitments Goals
Enabling change

Enabling change throughout
our business to
become people and planet
positive By August 2017, 95% of IKEA co -workers state that “sustainability is
a natural part of the everyday work”

By August 2017, at least 95% of co-workers view IKEA as a company
that takes social and environmental responsibility.
A more sustainable life at home
Take the lead in developing
and promoting products and
solutions that enable
customers to live a more
sustainable life at home. By August 2020, achieve more than a fourfold increase in sales from
products and solutions inspiring and enabling customers to live a
more sustainable life at home .
Take a lead in more sustainable food by enabling and encouraging
a balanced diet.

Resource and energy independence
Strive for resource
independence; securing
long term access to
sustainable raw materials,
ensuring a positive impact
on the communities where
we source and using
resources within the limits
of the planet. By August 2017, at least 50% of our wood will come from more
sustainable sources. By August 2020, we aim to source 100% of our
wood, paper and cardboard from more sustainable sources.

By August 2020, 90% of the total sales value will come from home
furnishing products classified as more sustainable.

By August 2020, on Group level, produce as much renewable energy
as we consume

Better life for people and communities

Contribute to better lives for
workers by supporting
decent work throughout our
supply chain. Maintain the social and environmental improvements reached
through the 100% IWAY approval of all suppliers of home furnishing
and other key products and services.

By August 2017, go further into our supply chain by securing
compliance to IWAY Musts 17 at all sub -suppliers of critical
materials and processes.

Develop and implement a transparent and reliable system for the
responsible recruitment of migrant workers at first tier suppliers in
identified critical areas by August 2017
Continuously identify and develop setups for home -based workers
to improve working conditions, protect labour rights and prevent
child labour . By August 2020, all home -based workers are
transitioned into improved setups and part of our handmade
development programme.

As a conclusion, we can say that reporting plays a very important role in IKEA’s CSR strategy,
because it shows which were the areas of improvement, what are the medium and long term
goals, and especially, how the actions that are taken are guided by valid principles, like the 10
the principles of the United Nations Global Compact (UNGC).