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Circularity for IKEA
- case study
In a fast-changing business environment, where a short-term mentality is still the norm, what are the building blocks needed for businesses to bring more importance or emphasis to the long-term value creation?
Companies generally adopt a linear take-make-use-dispose business model that generates massive pre-consumer and post-consumer waste streams that impact in a negative way the environment and contribute to the rising effects of climate change. To further understand the impact, on average, EU citizens generated 486 kilograms of waste per person in 2012 (Lee et al. 2017) and three billion new consumers are expected to enter the global market by 2030, driving unprecedented demand for goods and putting an enormous pressure on the environment through consumption and the waste that they will generate. The furniture industry makes no exception as it disposes of resources, creating waste streams that harm our environment. Furthermore, price volatility will continue to surge for certain goods with high probability of inflation of key commodities as well. All of these issues challange companies to revise their material input.
Client: IKEA (consultancy offered as part of the Leadership for Sustainability programme)
Solved: Considering the challenge but also the global context, we saw the need to propose to IKEA to adopt an industrial model that would decouple revenues from material input, that is the circular economy.
We have designed an integrated strategy, from an individual, organizational and network perspective, to create long-term value creation for IKEA. To this end, we have designed and proposed a new circular system for IKEA that has the potential to transition the company to a circular economy framework.
With a circular system in place, IKEA can create solutions that transform waste streams (pre-consumer and post-consumer waste) into valuable resources and continue to circulate them for as long and as efficiently possible through a regenerative and restorative system design. Moreover, due to the company’s size and influence in the furniture industry, it can bring a considerable contribution towards a positive environmental impact, aiding to shift perceptions, processes and procedure within the industry.
External collaborators: Julian Mühlmeier, Marthe Nehl, Niclas Jonsson, Madhuri Muralidhar, Vanessa Trager.