IKEA's Environmental Practices: Making Good Business Sense

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BECG065 For delivery in electronic format: Rs. 500 ;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Corporate Social Responsibility
Case Length : 20 Pages
Period : 1992-2006
Pub. Date : 2006
Teaching Note : Available
Organization : IKEA
Industry : Furniture Retailing
Countries : Sweden

Abstract:

The case discusses the environmental and sustainable business practices of the Sweden-based furniture retail giant IKEA Systems BV (IKEA). It examines in detail IKEA's journey in becoming an environmentally responsible company and highlights the initiatives the company took to ensure that its operations did not have adverse effects on the environment. IKEA was primarily involved in furniture retailing; initially most of its furniture was made of wood, which required the felling of trees. To process the wood, many chemicals were used, which were harmful to the environment and to the consumers. IKEA realized that better environmental practices within the company and among its suppliers would have long-term benefits, not only economically but also in presenting a positive corporate image of it to customers.

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Besides, they would help the company in playing its part in preserving the depleting natural resources. The case examines in detail IKEA's forestry practices and the IKEA Way or IWAY, which specified the working conditions, and the labor, environment, and forestry management practices that IKEA expected its suppliers to follow.

It also discusses the staircase models IKEA followed for the suppliers and with regard to forestry practices. Other environment friendly practices of IKEA discussed in the case include transportation, the environmental responsibilities of the employees, some of the unique eco-friendly products made by the company using recycled materials, and other practices regarding conservation of energy and waste management practiced at IKEA's stores.

Issues:

Understand how environmentally friendly practices can help a company minimize its costs

Examine how environmentally friendly practices can enhance an organization's image

Study how IKEA went about implementing its environmental policies across its global operations

Study how IKEA extended its environmental responsibility initiatives to its employees and consumers

Contents:

  Page No.
Introduction 1
Background Note 2
The Need for Environmental Initiatives 3
IKEA - Focus On Environment 4
Environmental Training 4
Environment Friendly Products 6
Eco-Friendly Practices 7
Making Suppliers Environmentally Responsibile 8
Audit of Suppliers 11
Forest Management 12
The Benefits and the Challenges 13
Exhibits 15

Keywords:

IKEA Systems BV, Environmental Responsibility, The Natural Step, Environmental Training, Eco-Friendly Practices, iWay Standards, Supplier Environmental Assurance, Staircase Model for Forestry, Forest Management, Wood Procurement, High Conservation Value Forests, Corporate Social Responsibility, Forest Stewardship Council, Universal Declaration of Human Rights, ISO 14000 Environmental Management Standards

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