r https://www.greenbiz.com/article/ikea-argues-businesses-go-all-sustainability
ID: 470291 • Letter: R
Question
r https://www.greenbiz.com/article/ikea-argues-businesses-go-all-sustainability
“IKEA argues for businesses to go all-in on sustainability”
By the year 2020, IKEA has promised that it is going to have a net positive impact on the environment, running completely on renewable energy and producing just as much renewable energy as it is consuming. IKEA has a Chief Sustainability Officer, Steve Howard, that says that they are going “all-in.” If your end goal is to help to eliminate carbon emissions you have to aim at having a 100% target. IKEA decided to set their goal at 100% to control its energy sources rather than paying large bills to utility companies. Many other businesses are only setting their aim to around 90%. If you are a company that is setting your goal around 50% you will only be half as good today, leaving customers and staff confused on what the end goal to real sustainability is.
Not only is Howard aiming at changing with his company, but also within the government. Howard argues in order to sell going green to other business you need to “make something that businesses can get behind - innovation, investment and growth.” In 2015, IKEA invested around $1.95 billion into its own solar and wind installations. IKEA owns 700,000 solar panels and 29 wind farms worldwide; they are on track to reach their goal by 2020. Their recent successes were found in their LED lighting movement, as they eliminated the sale of all bulbs except for LED’s. Their current sales were at 63 million and plan for next years to reach 100 million, growth that motivates all involved. Without IKEA’s backing from their multinational business, the sustainable goals, global leadership and resources wouldn’t be available and this growth and change not possible.
Doing business with IKEA is proving to be beneficial for those involved. They are helping to improve the processes and supply chains while educating and steering partners in the right direction. As noted in the article, “In a sense, IKEA is less the athlete and more like the team coach.”
Questions:
1. IKEA said that they are going through a “radical decarbonization” and has set an amazing goal of being 100% carbon free. Do you think that this is even feasible for other companies to do the same? How does this effect IKEA’s marketing campaigns and their business as a whole?
2. Do you think that IKEA’s view of the business over the long term justify their $1.95 billion investment into solar energy? Explain why you think it is or is not worth this investment.
3. What are some of the benefits of doing business with IKEA, as stated in the article?Do you agree that doing business with a multinational company is beneficial and would work for most companies? Why or why not?
Explanation / Answer
1. yes, it can be possible and feasible also. untill they set targets or goals to stop production of green house gases (GHG), they can not reach the goal of sustainability.
sustainability is based on a simple principle; everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. sustainability is an economic state where the demand placed upon environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations.
it is the same case with IKEA, it is saying that it focused on minimization of carbon production, with this move it send a clear message to its competitors that they must focus on these kind of strategies, and the same can be use for their marketing strategy.
2. yes, it is worthable. because it is one time investment and moreover there is zero impact on climate with this move. initially it may occur huge capital investment, but later the only need of maintanance cost to the project. solar power is the more acceptable power which does not create any damage to the climate and environment.
3. yes, it can be work. doing business like with IKEA or with international firms is good to domestic firms. because their exposure is good and the same experience and exposure will helps the domestic firms to reach their goals. not only this, they also can become a global firm by joing with a global firm which is fast growing.
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