How Business Can Sow Climate Optimism and Drive Action

During the last decade, we have become painfully aware that the climate crisis is no longer a distant threat but a living reality. It affects millions of people every day. Last year, the world exceeded 1.5°C of warming above pre-industrial temperatures for the first time—a milestone that reminds us of the urgency of action. Now, every fraction of a degree counts. Every year we can gain in actions will matter. Every leader who takes responsibility will matter. [time-brightcove not-tgx=”true”]

Today, 68% of IKEA’s customers worldwide see climate change as the biggest threat and worry about our future. The numbers, gathered during a 2023 survey, vary less from country to country than you may think. At the same time, only 6% of customers are prepared to pay more for sustainable products and solutions. Do not make the mistake of concluding that people don’t care. The truth is that most people simply can’t afford to pay more. They expect policymakers and companies such as ours, to find solutions that are affordable and sustainable. And they are right to do so. Sustainability can’t be a luxury for the few. 

As a leader of a multinational business and father of three, I see three reasons to be part of leading the transition to a climate smart future. To start with, based on the facts and awareness of today, we simply cannot allow ourselves to pass this on to the next generation. Secondly, it is clear that our customers and co-workers across the world expect us to lead the way. People will deselect brands that don’t. The expectation is not for perfection but sincere intentions and impactful actions. Third—here comes the good news—this is great for business. In general, climate smart means cost smart. Waste has always been expensive and every step of building a sustainable business model drives positive impact on the financials. Some actions pay off fast. Some take time. Just like any other investment.

As we experience the pains of today’s climate impacts and listen to the justified concerns for our future, we need to mobilize our optimism. It is true that we are not on track with the Paris Agreement’s goal of limiting global warming to 1.5°C. It is true that the trajectory is currently towards 2.5-2.9°C of warming by 2030 which will have disastrous consequences should it become a reality. At the same time, it is also true that we have already reached peak carbon per capita and have within our reach to soon bring down emissions in total. 

As a company we are committed to the Paris Agreement—we must halve greenhouse gas emissions by 2030 and reduce them by 90% by 2050. This means across scope 1 emissions in our operations, scope 2 indirect emissions, and scope 3, which covers emissions from the whole value chain—from raw material, production and transportation to customer use and product end of life. And it works. 

Since 2016, our baseline year, we have managed to reduce our climate footprint by 30.1% across all scopes, while growing the business by 23.7%. To help achieve this, we have invested more than 4.2 billion euros into off-site renewable energy since 2009. We are also investing about 1 billion euros in companies that are working to boost recycling infrastructure. And efficiency measures have helped us to reduce our energy bill by 97 million euros—or 29%—compared to five years ago. Meanwhile, we have cut our operation food waste by half across our business. Reducing waste, transitioning to renewable energy, as well as supporting our customers to save water, waste, electricity, and money is all a part of a long-term perspective that is resource smart, climate smart, and in the end, business smart.

And we’re not alone. Take a look at the World Economic Forums Alliance of CEO Climate Leaders, which has more than 130 member companies. Over the last three years they have collectively reduced absolute carbon—across all three scopes—by 10% while growing their business by 18%, outgrowing global GDP.  It’s not enough, but it proves we are on the right path. Only a few years ago many of us leaders made decisions based on faith. Today we know for a fact that our changes and investments will pay off—for people, for the planet, and for business. 

So, what’s the problem? We are not fast enough and actions are not enough. With five years left until 2030, we find ourselves at the halfway point of the most important decade for climate action. All parts of society including small and large companies need to act on their impact. We all need to get our own house in order by knowing our carbon footprint and taking action. We need a stronger and more solution-oriented collaboration between policymakers and corporate leaders to set the framework for the climate smart economy. We need to speed up change—the clock of this crisis is ticking. We also need to share our successes. Trust is at an all time low for the wrong reasons. Greenwashing and intentional misinformation are unacceptable, but silence from the best actors is an even bigger risk. And, we must be leaders for the future. All of us must assume a bigger role in the collective change.

We need to challenge the myths that stand in the way of action. We have the solutions and money to transition towards net zero. The risk is not only to miss the benefits of the new economy but suffer the economic loss. According to a recent report from the World Economic Forum, the cost of inaction will be in the region of 10-15%, every year. The biggest risk as a leader is knowing you could have done something, but didn’t.

It is good business to be a good business. It’s cost smart. It’s resource smart. And it’s climate smart. Let’s own the responsibility, lead from opportunities. Think about it: we are the first generation that can be part of creating a sustainable future that is good for people and the planet. That inspires me. I hope it does for you too.

Jesper Brodin is the CEO Ingka Group I IKEA, co-chair of the U.N. Global Compact, co-chair of the WEF Climate Alliance, and co-chair of the B Team.