ISEAL Alliance

By Michelle Doust, ISEAL Communications Coordinator

2011 was deemed the International Year of Forests by the United Nations, and it was also a big year for IKEA, whose sales continued to grow despite an overall slump in the home furnishings sector globally. Wood is the most important raw material for the retailer (wood products constitute more than half of IKEA’s sales), and IKEA has made commitments over the years towards increasing the percentage of responsibly harvested wood in their supply chain, with Forest Stewardship Council (FSC) certified wood accounting for approximately 25% of their supply, and plans to see that rise to 35% in 2012.  IKEA also is focusing on increasing the sustainability of their cotton supply (used in IKEA’s upholstery fabrics and bed linens), and to this end IKEA became a founding member of the Better Cotton Initiative (an ISEAL affiliate). IKEA also introduced UTZ certified coffee into their cafeterias, offices and restaurants in 2008.

Yet it is still a challenging time for IKEA. Deforestation rates are still alarmingly high across the globe, although the rate has slowed in recent years and illegal logging continues in many tropical forests. We asked Anders Hildeman, Global Forestry Manager at IKEA, to tell us more about IKEA’s recent challenges and commitments to responsible procurement.

IKEA has always focused on responsible forestry, and has embraced a stepwise or “staircase” approach to sustainable sources of timber, whereby a forest supplier must meet minimal requirements and IKEA will place increasingly higher demands for sustainability on those suppliers over time. Yet, illegal logging is still rampant across the globe and in many of IKEA’s main supply origins, such as China and Russia. What is IKEA doing to ensure legal and sustainable supplies of wood in its supply chain?

Well, first of all, our approach to wood sourcing is really a two step approach. The first one is to ensure that it fulfils some basic requirements and among those are issues around legality and ensuring that the harvesting isn’t damaging high conservation values. The second step is to ensure that we continuously source more of what we refer to as “preferred wood” for our range of products and it’s FSC certified wood that qualifies towards that objective. We are also looking at sourcing more recycled wood to ensure that we meet these minimum requirements everywhere. We first use forest certification and a chain of custody certification and then we have 16 foresters who work to control the wood source for IKEA products at our suppliers and carry out audits of the supply chain.

There is a new EU regulation, coming into effect in early 2013, focused on Due Diligence Systems that will avoid illegally harvested wood. How will this affect IKEA and its commitment to FSC? Will your FSC commitment help IKEA to meet the new regulation?

The EU regulation doesn’t explicitly mention FSC as “putting you in the clear”, as such, from the point of view of the legislation but it’s definitely going to be an important tool to meet the due diligence requirements of the EU timber regulations. We also have other certification systems like the PEFC (Programme for the Endorsement of Forest Certification) which can also provide reassurance towards legal requirements.

Overall, we welcome the EU timber regulation and we welcome the Lacey Act because it creates an even playing field. We are putting a lot of effort into ensuring legality of our products, of the wood that is harvested for our products, so we are happy to see that everybody else has to comply with these requirements. And since we’ve been operating these systems for more than a decade to ensure legality, we see this as a competitive advantage for us.

Some might say that origins such as Russia and China, where IKEA sources a great deal of its timber, are still struggling to reach maturity in terms of responsible forest management. Why doesn’t IKEA source its wood from elsewhere in Europe, or other origins? How can standards systems like FSC improve forest management in countries like China and Russia?

Well, the reason why IKEA sources globally is, of course, to ensure the best possible price and the best possible quality of its products but having said that we also put the resources in place to make sure that the wood that we’re using meets our requirements. And I think if we look from a sustainability point of view, companies are prepared to put these resources in place to ensure their sustainability requirements contribute very strongly to the development in countries like Russia or China or in South East Asia. IKEA has been supporting responsible forestry in both China and Russia and elsewhere over the years. For instance, since 2002 we’ve been working with WWF to promote responsible forestry and in that period, the area of certified forest in Russia has grown from approximately 3 million to 30 million hectares. And in China, out of the 2 million hectares that are certified, IKEA has contributed with technical assistance to approximately 85% of that area.

Some have complained that IKEA is not doing as much as it can to source FSC certified wood, and that certification targets have been slower than originally promised years ago, or not as high as the percentages seen in some of your competitors’ stores. What are the challenges to meeting those certification targets?

One of the big challenges is the availability of certified wood in many regions. If you are sourcing in China roughly just 2% of the forest area is certified and on a global level FSC certified forests makes up only about 5% of the commercially oriented forest management area. So, in many areas you have very low availability and that, is of course, one of the biggest challenges we face. However, I think one has to remember that even if the percentage might not seem that high, IKEA sources more than 2 million cubic meters of FSC certified wood and we are also implementing our minimum requirements and working with our foresters on the ground to ensure that we meet our sustainability targets.

What are the environmental and social sustainability challenges of IKEA’s other main raw materials, such as cotton? 

Besides wood, cotton is one of the most important raw materials for IKEA and we want the cotton we use to be produced with respect for people and the environment.

Although cotton is a renewable resource, it’s also a material associated with major sustainability concerns such as many farms using large amounts of water, artificial fertilisers and pesticides. We work to create lasting and large-scale improvements in conventional cotton cultivation by encouraging farmers to introduce more sustainable farming practices.

In 2005 we also started working with WWF on cotton farming projects that help farmers in India and Pakistan to grow cotton in a more sustainable way. The results have been significant. On average, participating farmers have halved their water consumption and use of chemical pesticides while the use of artificial fertilisers has been cut by 30 percent. At the same time, earnings have increased by 40 percent on average.

Today, we support projects run by a number of organisations to reach a larger number of farmers. Farmers get hands-on training and support to introduce more sustainable farming practises. In some areas, “master trainers” act as teachers and role models in the local community and this encourages other farmers to get involved.

How are standards systems like the Better Cotton Initiative being used to address sustainability issues in cotton and what are the opportunities for cotton standards in your sector?

Well, IKEA is one of the founding members of the Better Cotton Initiative (BCI), which aims to make global cotton production better for the people who produce it, better for the environment and better for the sector’s future.

We have also set a target that by the end of the 2015 financial year, all the cotton used for IKEA products shall comply with BCI’s social and environmental criteria. Farmers wanting to produce Better Cotton must incorporate not only the environmental criteria originally developed by IKEA and WWF, but also the working conditions criteria defined by the BCI. For instance, child labour and bonded labour is unacceptable but not uncommon in rural Pakistan and India, and this represents a major challenge to fulfilling BCI criteria on decent work. IKEA and the IKEA Foundation are working together to find ways to bring about lasting change in India and Pakistan. The IKEA Foundation is supporting projects run by UNICEF and Save the Children in cotton farming areas in India and Pakistan to improve children’s rights.

IKEA is focusing on its climate footprint, primarily in terms of energy efficiency and transport. As deforestation is a major driver of climate change, will your climate work become integrated with your forestry procurement and bring about more of a “carbon forestry” focus, such as on work related to Reducing Emissions from Deforestation and Degradation (REDD)? 

This is currently not integrated in the IKEA approach and we will need to have more clarity on the international policies, REDD not the least, before doing so. We do however have a requirement that wood should not come from deforestation in the tropics and the ambition to increase the sourcing of certified wood to a large extent directs IKEA sourcing away from areas affected by deforestation and degradation.

IKEA is also known for its in-store restaurants and Swedish food treats for shoppers. IKEA has been featuring UTZ certified coffee since 2008. Is IKEA considering using additional sustainability standards for its food procurement needs, beyond coffee? Might we ever see certified Swedish meatballs of some kind?

We are focusing on increasing the range of more sustainable food products to specific raw material areas with particular social and/or environmental challenges, mainly coffee, cacao, tea, salmon, dairy and meat products.

Since 2008, all coffee sold and served at IKEA has been UTZ Certified. We also introduced UTZ Certified cocoa, earlier this year, with a fully traceable chocolate bar produced by an Ivory Coast cooperative.

IKEA is also part of the Aquaculture Stewardship Council’s (ASC) Salmon Dialogue which is developing principles and criteria for responsible salmon farming. All IKEA salmon products shall be sourced according to the ASC standard by 2015. All other fish must fulfil the Marine Stewardship Council (MSC) criteria or be on WWF’s “green list” of species from relatively healthy and well-managed populations that can sustain current fishing pressure.

In addition, at least one dish served in IKEA restaurants must be made exclusively with organic ingredients.

We’re also cooperating with WWF in a project aimed at finding ways of adapting the IKEA range of foods to be more sustainable. The initial goal is to identify potential short-term greenhouse gas reductions. The next step is to initiate and implement actions to reduce the climate impact from all food-related operations and outline a strategy for long-term adaptation of the IKEA food business.

You partner with WWF and Rainforest Alliance to foster responsible forestry in IKEA supply origins such as Russia, China and Vietnam.  But how influential is the national or local NGO sector in those major origins, and what are they doing to tackle the sustainability challenges of forest management? 

Well, we’ve been working a lot with WWF in all these countries and we think they are doing a very good job on the ground to improve the standards of forest management. As I said before, in Russia the area that has been certified has grown from a very low level in the beginning to over 30 million hectares today. In China, although the growth has been slower, awareness about the necessity to manage resources in a better way has increased greatly. The same is true in Vietnam where there is also a growing awareness of the link between the way forests are managed and the possibilities to compete on an international market.

Lastly, you are a forest owner and own some 270 hectares of forestland in Swedish Lapland. What have you learned about forestry from working your own land?

Well it’s actually not me owning the land but it’s my wife and my kids who own the land! I’m a forester by training so forestry is something I have studied and worked with for my whole professional life. But what you learn from managing your own forest is to really take care of the land and you get a sense a pride from seeing the forest develop; having areas that are interesting from a conservation point of view; taking care of the wildlife and the trees and also the heritage from earlier generations.

IMAGE: FSC Certified Forest. Copyright FSC A.C.