Ikea’s parent company is betting big on sustainability. Ingka Group’s financial arm, Ingka Investments, said it plans to sink around 1 billion EUR in companies that are building and improving recycling infrastructure.
The move is part of Ingka Group’s Circular Investments initiative, which launched in 2017 to financially support companies contributing to the transition to a circular economy, with an emphasis on plastics, textiles, mattresses, wood and food waste. Since then, Ingka Group estimates its portfolio companies have recycled around 2.7 million metric tons of materials, avoiding more than 9.4 million metric tons of carbon emissions.
“To future-proof our business, we want to invest in financially and environmentally resilient companies,” said Lukas Visser, circular investments portfolio manager, Ingka Investments. “Ingka Investments is committed to transitioning towards a circular economy and retaining the value of materials. For us, that means investing in companies that are developing technology or growing capacity to prevent waste or supply recycled materials.”
With this new investment, Ingka will put its support behind companies such as RetourMatras, which recycles mattresses in Europe; Morssinkhof Rymoplast, which recycles post-consumer plastics and has two new facilities in Belgium under construction; and Next Generation Group, which is a collaborative of companies focused on plastic and organic waste recycling solutions.
Ikea has launched a number of initiatives in recent years aimed at shedding its “fast furniture” reputation by improving sustainability and circularity. Last year, the home goods giant launched Ikea Preowned in European markets, a peer-to-peer marketplace for secondhand items. The company also produced a line of bags, throws and other soft goods made from recycled Ikea uniforms.
According to Ingka, the global economy consumes 75 percent more natural resources than the earth can regenerate, and less than 20 percent of waste produced gets recycled. Ingka Investments managing director Peter van der Poel said this new investment will allow the company to expand its sustainability programs behind its own operations, contributing to a reduction of waste on a more global scale.
“Through investments, we are committed to doing our part to ensure that valuable materials are recycled and reused in the production of new products,” he said.
And while regulatory programs such as the European Union’s Waste Framework Directive aim to increase recycling, van der Poel said Ingka hopes to see further legislative pressure on companies to keep their products out of the landfill.
“What would help us go further is if legislation was stronger at prioritizing recycling over incineration and landfilling, for example by ensuring that Extended Producer Responsibility schemes were resulting in higher recycling rates,” he said. “We also welcome eco-design regulations to encourage the demand for these recycled materials, and we are actively collaborating with relevant authorities and other stakeholders to address these issues.”