Making Sustainability Affordable for All: IKEA Creates a Demand for Better Cotton, Lasting Change

15.03.13 CSR Wire

STOCKHOLM and NEW YORK – The IKEA Group of Sweden has announced its commitment to the Business Call to Action (BCtA) and reinforced its goal to use only cotton produced entirely in line with the Better Cotton Initiative (BCI) in all IKEA products by end of 2015.

As part of this effort, the leading home furnishing retailer also plans to grow worldwide demand for sustainable cotton at affordable prices. The BCtA is a global initiative that aims to support private sector efforts to fight poverty through its core business, supported by several international organizations and hosted by the UN Development Programme (UNDP).

IKEA’s goal is to ensure that consumers do not have to pay a premium for cotton products that are more sustainably farmed than conventional cotton—using less water and fewer chemicals and pesticides. Forecasts suggest cotton production costs will increase as conventional cotton farming becomes more water and chemical intensive. IKEA believes it is possible to produce cotton at a lower cost and through practices which not only improve incomes for farmers but also have a lower impact on the environment.

Cotton is the second most important raw material for the company after wood, making it a clear strategic priority. In 2012, IKEA used 160,000 tonnes of cotton in its products—with the majority coming from India and Pakistan, where its work related to the BCtA commitments are focused.

Sigrid Kaag, UN Assistant Secretary-General, Assistant UNDP Administrator, and Director ofUNDP’s Bureau for External Relations and Advocacy, also welcomed IKEA’s commitment. “Through its development expertise and convening power, UNDP can leverage private sector investments and operations in developing countries. The Business Call to Action (BCtA), housed at UNDP, can challenge and support corporations such as IKEA in new markets by contributing to more inclusive business models with a positive impact on people living in in poverty,” she said.

IKEA’s commitment began in 2005 as part of its overall environmental efforts and as a founding member of the BCI. BCI works with a diverse range of stakeholders to promote measurable and continuing improvements for the environment, farming communities, and theeconomies of cotton-producing areas. Such efforts often reduce input costs and generally increase farmer incomes by transforming the way in which cotton is farmed. By encouraging more sustainable cotton farming methods and the uptake of Better Cotton on the global market, IKEA contributes to securing a more stable, affordable supply of cotton.

IKEA is providing technical assistance and training to thousands of farmers in Pakistan to help them to produce and sell Better Cotton. Currently, 34 percent (51,000 tonnes) of all cotton used in IKEA products is produced in line with BCI standards. In 2012, the annual world production of sustainable cotton was only 250,000 tonnes, which IKEA seeks to increase through its holistic approach to assisting farmers, including those outside of IKEA’s value chain.

“We are pleased to contribute our knowledge and experience on working with cotton to the innovative BCtA and play our small part in progressing towards the Millennium Development Goals. By making sustainability affordable for everyone, we hope we can lead to the transformational change of markets and commodities, such as cotton,” Steve Howard, Chief Sustainability Officer, IKEA Group, said.

“Today, 34 percent of our cotton is produced in a more sustainable way and by the end of 2015 this will apply to all of the cotton in IKEA products. It not only benefits cotton farmers but importantly, customers do not need to pay a premium price for products made in a way that is better for both people and the environment,” Howard said.

Charlotte Petri Gornitzka, Director-General of the Swedish International Development Cooperation Agency (Sida), added: “It is very welcome that more Swedish companies are joining this initiative. Inclusive business models are good for business as well as for people living in poverty. The mutual benefits are at the core of this programme and show the importance of better harnessing the great potential of the private sector in poverty reduction efforts.”