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. 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 responsi-bilities 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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Gain insights into the corporate social responsibility initiatives at the company
• Understand the importance of corporate social responsibility
• and Know more about the challenges and issues concerning the implementation of CSR initiatives.

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