IKEA's parent company, Inter IKEA, on Wednesday said that it would be pumping in an additional 200 million euros or $220 million in green energy and forestation as the company makes an effort towards shifting to renewable energy use.
The announcement follows the company's plans of becoming carbon neutral by 2030. IKEA has long been making efforts to shift to renewable energy. As the company continues to increase its franchise base, its focus too shifts towards supporting its direct suppliers towards increased green energy use.
The investment will be made by the parent company Inter IKEA which boasts a string of franchise businesses, the largest being Ingka Group.
Investment to be made in phases
The 200 million euros will be invested in two phases. The first 100 million euros will be invested in renewable energy projects like cooling, heating and electricity generation.
This investment will be in partnership with its suppliers, which will be directed partly towards its supply chain such as metal, ceramics, glass and textile production, where converting renewable energy has been a challenge, according to The Guardian.
"Our suppliers have worked on this agenda for quite some time so we know where there are critical areas," said Chief Sustainability Officer Lena Pripp-Kovac.
The company also said that in order to reach its goal it not only needs to stop carbon emission but also needs to store carbon already emitted.
Another 100 million euros or $110 million will be invested in projects like reforestation and forest protection in a bid to remove carbon from air. This money will be spent in partnership with forest owners and organizations working towards reforestation and forest protection.
Investment part of bigger plan
The world's largest furniture retails has set a goal to become carbon neutral by 2030. Naturally, this investment is part of that goal. The company produces only 10% of its total product range and sources the rest from its suppliers.
The Leiden-based furniture giant has also identified the areas where reforestation is required. The most likely areas would be the tropical and subtropical regions, the company said.
Earlier in September, the company said that it was pledging to exceed its 2020 target of producing equal amount of renewable energy that it consumer by the year end.
The company since 2009 has already invested 2.5 billion euros in renewable energy, owning 534 wind turbines and 715,000 solar panels in 14 countries. Besides it also owns an additional 920,000 solar panels on store rooftops.