Introduction letter | Our climate agenda | FY23 summary of progress | The IKEA climate footprint throughout the value chain | Air pollution | Appendices Making progress and strengthening our climate goals 2023 was the warmest year on record, Türkiye reaching 100% renewable electricity during the example of how we enable our customers to generate is also one of the main contributors to climate change, and current forecasts predict that we year, there are now 25 IKEA retail markets that only use renewable energy at home (page 9). as nature is an important carbon sink and securing its are heading towards a global warming renewable electricity (page 26). resilience is of utmost importance. We will be working 1 Millions of people are already a昀昀ected by climate together with partners and stakeholders to halt and of about 2.7°C. Despite the clear signs For materials – our largest climate footprint – we have change. In the six years from 2016 to 2021, UNICEF reverse nature loss. To further support change, the IKEA and evidence pointing to the world being clear plans in place for each material area and, in FY23, reported that 43.1 million children were displaced due to business was present at COP28, joining in the call to 2 From a health perspective, set a new goal to halve GHG emissions from materials weather-related disasters. phase out fossil fuels, halt deforestation and address o昀昀 course in addressing global warming, it’s more important than ever to act with by FY30 compared to FY16. A milestone that will impact 2.4 billion people are currently breathing dangerous the root causes of air pollution. urgency and stay committed to the Paris our future footprint is the introduction of bio-based glue levels of polluted air, with the combustion of fossil fuels 3 Agreement and align with the 1.5°C limit. in one of our board factories. As glue in board materials being a large contributor. Looking ahead to 2050, it's We are immensely proud of all the hard work our represents 5% of the total climate footprint within the projected that 1.2 billion people will be displaced as a co-workers, suppliers and partners do across the 4 result of climate change. These are simply staggering That’s why we have strengthened our strategic climate IKEA value chain, this movement will have a signi昀椀cant IKEA value chain to make the changes we want to see goals and actions to align with the 1.5°C trajectory impact on our climate footprint (page 12). We also 昀椀gures. For a business with a vision to create a better happen, step by step. It gives us the optimism that everyday life for the many people, we must do what we – moving from a goal of an absolute reduction of launched our 昀椀rst ceramic product using internal factory it can be done! Together, we will take the necessary waste – the tableware SILVERSIDA. can to limit climate change. actions needed to reach our new ambitious goals and greenhouse gas (GHG) emissions from the total IKEA contribute to limiting global warming to 1.5°C. value chain of at least 15% by FY30 to at least 50% It's important for us to lead with facts and to be able An important movement in society, if we are to (page 4). Our overall goal is to reach net-zero emissions to substantiate the goals we set and understand what limit climate change and contribute to clean air, is without using any carbon o昀昀sets by FY50 at the latest. it takes to reach them. This safeguards credibility and the complete phase-out of fossil fuels – abated and These goals are aligned with the Net-Zero Standard 5 – and any connected subsidies. We must unabated accountability. E昀昀ects from COVID-19, the war in Ukraine by Science Based Target initiative (SBTi) and are now address the root causes of climate change. Therefore, pending their approval. and impacts from high in昀氀ation made the work to set we support the Fossil to Clean campaign by We Mean our new climate goals a bit harder than we 昀椀rst thought. We now have clear plans in place and will share these in Business and are engaging in many other initiatives. In FY23, the absolute reduction of greenhouse gas more detail in FY24.Hopefully, we can inspire others to Only by striving towards 100% renewable energy can we emissions from the entire IKEA value chain was 12%, take action aligned with 1.5°C. limit global warming. There are no shortcuts. compared to FY22, and 22% compared to the baseline year FY16. The reduction resulted from a continued As a business, we have the possibility and the We know that climate change, nature loss and inequality increase of renewable electricity use in both retail and responsibility to reduce the GHG emissions of our own are interdependent. Protecting and restoring nature is Jon Abrahamsson Ring Pär Stenmark production units, energy e昀케ciency improvements in value chain and contribute with further reductions a vital part of our climate agenda since climate change Chief Executive O昀케cer, Chief Sustainability O昀케cer, our lighting range, and lower production volumes. With is one of the main drivers of nature loss. Deforestation Inter IKEA Group Inter IKEA Group in society. Our home solar o昀昀er, SOLSTRÅLE is one 1 Climate Action Tracker, "No change to warming as fossil fuel endgame brings focus onto false solutions" 2023. 2 UNICEF, "Weather-related disasters led to 43.1 million displacements of children over six years" 2023. 3 WHO, "Health topics: Air pollution" 2019. 4 Zurich Insurance Group, "There could be 1.2 billion climate refugees by 2050. Here’s what you need to know" 2022. 5 IPCC de昀椀nition of "abated and unabated". 3 - IKEA CLIMATE REPORT FY23