You would be hard-pressed to find someone today who does not own a piece of IKEA furniture, or at least know someone who does. What is perhaps lesser acknowledged about the company, however, is its commitment to social and environmental initiatives that have given it a reach that extends beyond its corporate walls.
In the company’s early days, most of its furniture was made of wood, which Kamprad would source from different countries. Often, this process would involve the large-scale cutting down of trees from forests. It was also later discovered that some of IKEA’s suppliers in the manufacturing of goods would exploit children.
Kamprad was unhappy with this situation. He did not want his corporate achievements to be overshadowed by these dark spots on his company’s resume. Thus, Kamprad decided to reorganize his company’s business activities, enforcing stricter rules with regard to its social and environmental policies. IKEA adopted a systematic approach to its environmental policies starting in the early 1990s. After performing environmental audits to identify its areas of greatest impact, IKEA developed an environmental action plan.
IKEA is now committed to working in close cooperation with its suppliers, in order to monitor a product’s life cycle right from the choice of raw materials through to production and distribution. Kamprad has focused the company on using fewer raw materials and creating less waste. IKEA no longer uses wood from forests that have a clearly defined high conservation value or natural forests that are intact. Instead, all of their materials are certified according to a forest management standard.
All of IKEA’s suppliers are now required to have an environmental policy, which sets targets for reducing their negative impacts. IKEA’s buyers are required to take training courses to learn more about the environmental impacts of they materials they are purchasing. IKEA staff members are given Environmental Training, and the opportunity to sit on the Environmental Committee. Visitors to IKEA stores are also given their own mini-training, with brochures and occasional displays on the company’s environmental work.
In his “Testament of a Furniture Dealer”, Kamprad outlines another one of his maxims: “Waste of resources is a mortal sin at IKEA.” From storage systems made of recycled milk cartons to tables made from birch heartwood, a part of the wood normally discarded by manufacturers, Kamprad’s company is doing its fair share to preserve the environment. IKEA is also involved in numerous charitable causes, including UNICEF, Save the Children and American Forest. Together, IKEA works with these organizations to address the issues of child labour in northern India, violence against women and children in Uganda, and providing aid to victims of Hurricane Katrina.
Kamprad has made his company a leader in corporate social responsibility and has reaped the benefits as a result. “To do business with a clear conscience is an attitude that pays,” he says. “We have to find more time for ourselves and to regain respect for the environment in which we live.”
Lesson #5: Commit to Reaching Beyond Your Stores
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