IKEA's Sustainable Business Strategy: A Difference-Maker in Social and Environmental Affairs

1. Social and Environmental Affairs Thomas Bergmark

2. 14,6 billion Euro sales FY 2005 • 90.000 co-workers • 216 stores in 33 countries • 1500 Suppliers in 55 countries • 32 factories in 9 countries • 27 distribution centres in 16 countries

3. Our Vision…. …is to create a better everyday life for the many people

4. “Sustainability Direction”; In a consumer society with growing & international business; “IKEA’s business shall have an overall positive impact on people & the environment”

5. “Focus Areas” FY 06-09 • Products & materials • Suppliers • Energy & Transport • Buildings & infrastructure • Community involvement • Leadership & Competence

6. Suppliers • “IKEA shall secure good Social, Working • and Environmental conditions at its suppliers, • and increase the suppliers’ own capability and • motivation to implement and maintain our • demands”

7. The IKEA supplier world...

8. Differs a lot…...

9. IWAY consists of... • Our Code of Conduct - “IWAY” “The IKEA Way on Purchasing Home Furnishing Products” • Based on UN and ILO decl & conv • IWAY Standard – specifying requirements • IWAY evaluation checklist – 90 criteria’s • Business responsibility, since Sept 2000 • IWAY Council – CEO is Chairman

10. IWAY Standard - 17 areas • .General Legal Compliance • .Emissions to air and water, Noise • .Ground Contamination • .Chemicals • .Hazardous and Non-Hazardous Waste • .Fire Safety • .Worker Safety • .Provided Housing Facilities • .Wages, benefits and Working Hours • .Child Labour • .Forced & Bonded Labour • .Discrimination • .Freedom of Association • .Harassment and Abuse / Disciplinary Practises • Continuous Improvements • .Routines for procurement of wood, bamboo and rattan • Fulfilment of IKEA and legal forestry demands

11. 43 Trading Service Offices • 80 auditors performing IWAY audits • developing suppliers . .

12. Internal & External Verification audits A. Trading Service Offices B. Compliance team C. 3rd parties - PWC, KPMG and ITS

13. Difficult issues remains to be solved…….. • Local legislation • Working hours • Overtime payment • Wastewater treatment • Hazardous waste • Chemicals In August 2005 the average supplier fulfils 90% of our requirements…..”the 90 criteria’s”

14. How IKEA can contribute to this UNEP meeting…… • We have been working with Social & Environmental actions since 15 years • We have a substantial experience from the field • We are actively working with the UN Global Compact “Ten Principles” • We are profitable and growing and S&E actions is one of the success factors

15. Benefits to IKEA by participating • We can highlight the challenges we are facing • We need partnerships to solve several difficult issues • We can learn a lot from other stakeholders • We can contribute to and influence the development

16. Social & Environmental Report F.Y.2004 on www.IKEA-group.IKEA.com

17. Conclusions • Our Vision, Culture & Values - the foundation • Sustainability Direction and S&E Strategy • Clear requirements & tools for improvement • Participating is a win-win situation • S&E actions is core to our business success

18. WE CAN MAKE A DIFFERENCE!! - by doing business in a responsible way…. www.IKEA-group.IKEA.com