Introduction | Becoming People & Planet Positive | Stakeholder engagement | Sustainability governance | SDG index Healthy & sustainable living - Our circularity agenda - Our climate agenda - Regenerating resources - Fair & equal - IWAY 1 Competence development a focus of Non-conformities in working hours Inter IKEA Group suppliers and service providers actively working with IWAY collaboration with our suppliers registration, accident insurance and the responsible recruitment of migrant workers Number of IWAY Basic requirements ful昀椀lled Competence development is one of the key discovered during audits IKEA production (% of all suppliers) 2 and service Description components of the IWAY implementation supplier type 3 support to suppliers. All IKEA suppliers perform During IWAY audits performed at suppliers units FY23 FY20 FY21 FY22 FY23 internal audits to assess compliance with IWAY in FY23, the most commonly identi昀椀ed non- Home furnishing suppliers 1,383 Manufacture IKEA home 95 99 99 99.8 requirements at least once a year. Having an conformities to IWAY Must requirements were furnishing products connected to the following issues: internal veri昀椀cation process and system in place enables the suppliers to proactively address • Insu昀케cient systems for registering working Transport and distribution 395 Transport IKEA products from 94 97 99 99.8 deviations, as well as develop knowledge and suppliers (often referred suppliers to, and between stores hours, including overtime, were found at 13 to as partners and service and distribution centres understanding of the IWAY requirements and suppliers. providers)4 their implementation in their organisation. Supplier-led IWAY audits do not replace IWAY • Non-compliance to the accident insurance Food suppliers 441 Provide the food and ingredients 99 99 99 99.9 for the IKEA bistros, restaurants, audits performed by IKEA teams or third-party requirement was identi昀椀ed at seven suppliers. and Swedish Food Markets auditors. The accident insurance requirement was strengthened in IWAY 6 and now includes During FY23, regional teams of IKEA co- occupational illnesses. Including occupational IKEA Components 1,215 Provide components and 95 98 99 99.9 workers supported 22 suppliers implementing materials used in IKEA home illnesses is new in some regions and has led furnishing products to IKEA suppliers and sub-contractors supplier-led veri昀椀cation activities. Supporting to non-conformities, despite implementation and strengthening their ability to self-manage, support to suppliers. the IWAY system builds competences and IKEA global media 32 Provide pulp, paper, and print 93 94 95 99.5 enhanced outcomes and leads to discussion on • We identi昀椀ed cases of non-conformity on productions services for global media responsible recruitment of migrant workers productions5 sustainability topics between IKEA co-workers at three suppliers. Securing compliance with and suppliers. Critical sub-contractors 4,995 Critical home furnishing sub- 95 806 7 IWAY requirements on responsible recruitment 89 71 contractors where compliance of migrant workers is an important area that towards IWAY Must has been Verifying no child labour at suppliers we are working on in all markets where we veri昀椀ed operate. During the IWAY audits and veri昀椀cation activities performed in FY23, no suspected or con昀椀rmed As with all IWAY deviations, we take these issues cases of child labour were identi昀椀ed. We closely very seriously and are following the IWAY process monitor for this at all our suppliers and are of identifying root causes, securing that suppliers continuing to work to prevent and address 1 To create one competence centre for purchasing the supply of raw materials and components, as of 1 September 2021, the purchase of direct implement corrective actions, and phasing out material for IKEA owned factories of IKEA Industry is led from IKEA Components. 2 The table does not include local suppliers to IKEA franchisees. children's rights risks deeper in supply chains suppliers who don't address the issues in a 3 Some suppliers and service providers have multiple production and service units. IWAY applies on a unit level. (page 48). reliable and consistent way. During FY23, we 4 No air freight is used for our product transport. 5 ended our partnership with seven suppliers due to This 昀椀gure doesn’t include digital suppliers. 6 The FY21 result is lower compared to FY20 due to the impact of the COVID-19 pandemic on audits at sub-contractors, where many veri昀椀cation IWAY non-compliance. activities were reduced or put on hold due to worldwide travel restrictions. 7 The FY23 result is lower compared to FY22 as a number of veri昀椀cations have recently expired and are in the process of being reviewed. 56 - IKEA SUSTAINABILITY REPORT FY23