IKEA People & Planet Positive

© Inter IKEA Systems B . V . 2023 People & Planet Positive IKEA Sustainability Strategy Published: June 2018. Updated: November 2023

2 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 The purpose of this strategy is to inspire, activate and lead us in our decision-making and goal setting so that we Contents together can achieve the big positive changes we want to see in the world, and for the entire IKEA ecosystem. What sustainability means to IKEA 3 Being positive in a rapidly-changing world 5 The IKEA sustainability strategy, People & The strategy will be reviewed annually to Three focus areas 11 Planet Positive, is issued by Inter IKEA Group secure alignment with the total IKEA strategic Healthy & sustainable living 12 and covers the entire IKEA value chain and framework. You can read about our latest Circular & climate positive 14 1 franchise system. progress measured against this strategy in Fair & equal 16 the annual IKEA Sustainability Report and IKEA Enablers: How we make it happen 18 Climate report. The IKEA business is de昀椀ned as the business activities performed by all entities operating Overview of ambitions and commitments 19 under the IKEA Brand. “We” in this strategy Our sustainability ambitions and refers to the IKEA business. The IKEA value commitments are set for 2030 in line with the chain includes sourcing and extracting raw UN Sustainable Development Goals. materials, manufacturing, transporting of products, retail activities in stores, customer We don’t have all the answers and cannot travel to stores, product use in customers’ achieve our goals alone. Therefore, we homes and product end-of-life. are committed to working together in a collaborative way and being transparent To ensure the long-term growth and about what we learn. We will rely on our development of the IKEA business, we use culture of entrepreneurship, always moving a franchise system. This provides 昀椀nancial forward and not waiting for perfection. We stability while allowing franchisees to will work together to achieve continuous challenge, test and explore new markets and improvements. ideas. Together, we continue to develop the IKEA business. 1 In total, there are 12 IKEA franchisees in more than 60 markets. Inter IKEA Group includes the IKEA franchisor, range, supply and manufacturing. The IKEA sustainability agenda is set and governed by the Strategic Sustainability Council with the Inter IKEA Group CEO as chair.

3 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 What sustainability means to IKEA We want to have a positive impact on people, society and the planet. For us, it’s about balancing economic growth and positive Environmental social impact with environmental protection and regeneration. We always think long term – to be able to meet the needs of people today without compromising the needs of future generations. Doing this requires rethinking and inspiring Better changes in lifestyles and consumption and Life Better life to adopting new ways of working. We are for more committed to leading the way forward together people with our co-workers, customers and partners and to using our size to make a positive di昀昀erence. This is both a responsibility and a business opportunity. The more people we reach, the bigger the impact we can have together, and the more people we can enable to live a better Social Economic everyday life. The better the balance between environmental, economic and social impact, the more people will have the chance at a better life within the boundaries of the planet

4 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 The IKEA vision is our inspiration We want to create an IKEA Living our values Co-creating a better world business model that is sustainable. The IKEA vision, Caring for people and the planet is one We are open and engage with others, to create a better everyday of our core values, and it guides us in listening and learning and sharing life for the many people, is our how we work. From the very beginning, knowledge and ideas. Together we co- inspiration. we have always viewed waste as “a sin”. create a better world. This is how IKEA We were born in the rocky landscape has worked, and continues to work, with of Småland in southern Sweden where sustainability. We see the opportunity We must transform our way of working – people had to be creative with their to use creativity and knowledge to scale from linear to circular; from only using to limited resources. ideas, collaborate on challenges and be a also regenerating resources. As a business partner for positive change. Sustainability reliant on natural resources and people, this can’t be achieved alone. will also mean that we can secure the future Being bold in facing challenges of the IKEA business and value chain and the livelihoods of the millions of people that It’s about setting ambitions that we know Working long term for positive change contribute to it. we cannot reach alone. Still, being bold is not only about setting high ambitions, We work long-term for positive change, We believe that the IKEA culture – how we but also about being open and honest focusing on the root cause of issues and work and what we value – is fundamental about the challenges we face and making not only on treating the symptoms. The to achieving our vision. In other words, it is di昀케cult decisions that lead to a positive IKEA business setup allows us to make not only what we do, but how we do it, that impact. To take the next big steps will investments for the future in things like matters. mean talking about our successes and new technologies, innovative materials, failures, admitting we don’t have all of and ways of generating clean energy as the answers and being part of a wider well as in social development in the IKEA conversation to 昀椀nd new solutions. value chain.

5 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Being positive in a rapidly- changing world Our world is changing rapidly in many ways, From our own history, we and we believe that over time more and more know that what at 昀椀rst people can and will have a better everyday seem like challenges can life. We are optimistic about the future, even become opportunities and in challenging times. that limitations can lead to To create a better everyday life for the many, amazing innovations. and to ensure the success of IKEA into the future, we must take on the challenges that face us, together. And this has never been as important as it is today. We have identi昀椀ed three major challenges that are highly relevant for our business: climate change, unsustainable consumption, and inequality. All three challenges directly impact people’s health and well-being.

6 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Challenge Climate change Climate change is one of the To limit the critical e昀昀ects climate change IKEA climate footprint FY16 (baseline year) biggest challenges that humanity has on people, the planet and business, % of total greenhouse gas emissions – 27.8 million tonnes CO2 eq faces. Temperatures are rising the temperature increase must be limited 3,4 more and more every year,1,2 to 1.5°C. To do this, global greenhouse Materials 43.5% and gas emissions must be cut in half by 2030 today we can already see the compared to 2010 - achieved mainly through Food ingredients 3.5% 3 impact. The urgency to act now drastic reductions in greenhouse gas is clear. Production 10.5% emissions, as well as by removing CO2 from the atmosphere through better forest and Product transport 4.0% The signing of the Paris Climate Agreement agriculture management. By 2050, at the IKEA retail & other was an important step towards coordinated operations 1.9% latest, this combined e昀昀ect must reach net global action to keep the global temperature zero emissions. Co-worker commuting 0.8% increase to below 1.5°C by the end of the & business travel century. Customer travel & 5.4% home deliveries Product use at home 23.1% Product end-of-life 6.2% Other 1.0% 1 https://news.un.org/en/story/2022/01/1110022 The climate footprint data is annually reviewed and updated, to 2 https://climate.nasa.gov/vital-signs/global-temperature/ accommodate for new emerging data and facts. The largest IKEA climate 3 https://www.ipcc.ch/sr15/ footprint comes from the materials used in products. Baseline calculation IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, FY16, percentages have been rounded. in the context of strengthening the global response to the threat of climate change, sustainable development, and e昀昀orts to eradicate poverty. 4 https://www.wwf.org.uk/updates/our-warming-world-how-much-di昀昀erence-will-half-degree-really-make

7 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Challenge Unsustainable consumption By 2030, the global population rising consumption of meat and dairy, and the is expected to reach nearly 8.6 current loss or wastage of one-third of all food 2 1 This means that more produced. billion. and more people will look for a Resource scarcity and air, water and land chance for a better life. pollution are very visible due, in part, to In a world that already uses resources unsustainable consumption and wastefulness. requiring more than one planet, billions of For IKEA, unsustainable consumption is one of new consumers put even greater pressure our biggest challenges: How can we continue on the planet. In many parts of the world, to grow and enable more people to live better consumption is growing at an unsustainable everyday lives within the boundaries of the rate. And while many people are escaping planet? poverty, many also lack access to a昀昀ordable and healthy food. Today, it’s estimated that the world must produce 70% more food by 2050 due to population growth, but also due to trends in 1 https://population.un.org/wpp/ 2 FAO, the Food and Agriculture Organization of UN estimated that the world must produce 70% more food by 2050 due to population growth http://www.fao.org/昀椀leadmin/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_in_2050.pdf Current loss or wastage of one third of all food produced. http://www.fao.org/food-loss-and-food-waste/en/

8 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Challenge Inequality is rising The world economy has grown Global challenges such as pandemics, climate Inequality has become a systemic risk that exponentially over the past change, biodiversity loss and geopolitical is threatening individuals, communities, hundred years, contributing to con昀氀icts continue to accelerate inequality, companies and entire economies. Businesses, the largest reduction of poverty hitting the most vulnerable the hardest. like IKEA, have a huge opportunity and in the history of mankind. At The transition to a net-zero economy brings responsibility to work alongside governments the same time, there is an ever- additional challenges for livelihoods and to build resilient societies in which everyone’s increasing level of inequality human rights, as industries must drastically rights are respected, basic needs are met, and and social instability, with vast change, while the impacts of climate change equal opportunities are available for all. numbers of people being left are set to cause widespread disruption that will disproportionally a昀昀ect vulnerable behind. IKEA has identi昀椀ed and is taking action across communities. many areas – including respecting human Inequality is the uneven distribution rights, providing decent and meaningful of income, wealth, and wellbeing. Many people have seen their jobs become Estimates show that COVID-19 has pushed work, paying and promoting a living wage It matters because it undermines unstable, wages not covering basic needs around 100 million people back into extreme and focusing on vulnerable groups, such as human dignity – breeding discontent, 1 and a fast technological shift that’s di昀케cult to poverty. Women are disproportionately children, and becoming a more equal, diverse fuelling division, and leaving our adapt to – automation is predicted to replace and inclusive business. a昀昀ected, leaving their jobs and not returning, societies incapable of tackling the millions of jobs in the coming decades. Gender and younger generations are losing access to collective challenges we face. equality is still far from a reality and people education and job opportunities. New research are still discriminated against based on their suggests climate change could push a further WBCSD, 2022 ethnicity, ability, gender identity or sexual 130 million people into extreme poverty by orientation, etc. 2 2030. 1 World Bank, 2021. Updated estimates of the impact of COVID-19 on global poverty: Looking back at 2020 and the outlook for 2021. 2 World Bank Group, 2020. Revised Estimates of the Impact of Climate Change on Extreme Poverty by 2030.

9 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 The UN Sustainable Development Goals (SDGs) Many of the global sustainability challenges and calls for action are described in the UN Sustainable Development Goals (SDGs). Launched in 2015, the SDGs provide an inspiring framework for collective action. They guide us as we develop the IKEA business, set ambitions, and engage with our partners. All of the goals are connected and IKEA will use them as our compass to mobilise change in our work.

10 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 “No method is more e昀昀ective than a How IKEA can good example.” Ingvar Kamprad make a positive di昀昀erence Through our business, we have Part of our role is to use our size, creativity, a unique opportunity to lead the innovation and knowledge in life at home way by being a good example for to scale ideas and be a partner for positive positive change in society. change. Being a leader means looking critically at all Having a positive impact means that we aspects of our business, but also engaging always aim to generate more than we in the debate and enabling customers, co- use ourselves, working to make a positive workers, and partners to take action and di昀昀erence beyond our own business. contribute. We are committed to creating a better Each one of us can be a leader for change. everyday life for the many people and to To change the world, good ideas must be being people and planet positive. nurtured and magni昀椀ed to reach as many people as possible.

11 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Three focus areas As a response to the three major challenges impacting the IKEA business, we have identi昀椀ed three corresponding focus areas to help us to ful昀椀l the IKEA vision People and ambition to become people & Planet and planet positive. Positive Under each focus area, we outline our commitments to achieving our ambitions. Healthy & Circular Fair sustainable & climate & living positive equal

12 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 By 2030, our ambition is to inspire and enable more Healthy & than 1 billion people to live a better everyday life sustainable living within the boundaries of the planet Our homes and the way we new, innovative ways of living: in smaller live have a huge impact on spaces, for being more conscious and less our health, well-being, and the wasteful in what they buy, and for prolonging planet. the life of their things. Households, for example, are estimated As one of the largest food companies in the to consume one-third of the global energy world, we also have a responsibility to provide healthy and nutritious food. We strive to not 1 2 use and 10% of the water use. Enabling as many people as possible to generate and use only o昀昀er more sustainable home furnishing renewable energy and reduce their home and food products, solutions and services, but energy and water consumption would have also to inspire and support people to make a great impact. Water, food and air quality positive changes in their lifestyles and to consume in more sustainable ways. Until now are also major concerns for people around our focus has been on enabling customers the world. The impact of pollution and waste is already visible in everyday life for many to become energy and resource e昀케cient people. and reduce waste. We will now also focus on inspiring a shift through promoting a new People expect businesses and brands like IKEA mindset for healthy and sustainable living. to make living a more sustainable life both a昀昀ordable and attractive. They are searching for ideas and solutions and are counting on 1 http://www.un.org/sustainabledevelopment/sustainable-consumption- production/ 2 https://www.wri.org/blog/2020/02/growth-domestic-water-use

13 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Healthy & sustainable living What we have done so far Our ambitions for 2030 We are committed to IKEA already enables people to actively live a By 2030, we will inspire and enable people to Creating a movement in society around better Promoting circular and sustainable healthier and more sustainable life at home with make healthier and more sustainable choices. everyday living consumption a focus on the e昀케ciency and functions of the We will, together with others, de昀椀ne what Inspiring and enabling people to rede昀椀ne their Seeing IKEA products as raw materials for the home, o昀昀ering a昀昀ordable products and solutions sustainable consumption means for IKEA. We will life at home – a life that is sustainable, supports future and ensuring that all products have circular for water e昀케ciency, energy e昀케ciency, renewable develop all products using the IKEA democratic energy, and waste sorting solutions. design approach and circular design principles. safety, health and well-being, and is within the capabilities: designed from the very beginning We will work together with others to prolong means of the many people. to be repurposed, repaired, reused, resold and For many years, IKEA has worked proactively the life of products and materials and thereby recycled. when it comes to the use of chemicals in IKEA promote a sharing and circular economy. Leading the transition towards a new de昀椀nition products, phasing out, often ahead of legislation, of a better everyday life and being a driving force Providing and promoting services, solutions, behind changes in unsustainable consumption potentially harmful chemicals. Sustainability cannot be a luxury for the few! inspiration and o昀昀ering easy access to knowledge We will make healthy and sustainable living a patterns. to prolong the life of products and materials. All IKEA products and solutions are designed Inviting and enabling customers and other desirable choice that is a昀昀ordable, attractive and with quality, form, function, low price, and accessible for as many people as possible. partners to be part of the solution by making Inspiring and enabling people to live healthier, sustainability as the IKEA democratic design it easy to buy, 昀椀x, sell, share and give away dimensions. The IKEA business will enable people to generate more sustainable lives products. renewable energy and be energy and water Even though we have accomplished many things, e昀케cient, to purify the water and air in their O昀昀ering better, more a昀昀ordable and inclusive we are only at the beginning, and there is still homes, eliminate waste, and contribute to smart products and solutions that enable people much to be done. adapting their homes to cope with the impact of to live safer, healthier and more sustainable lives. climate change. We will come together and work to improve health and well-being. Providing knowledge and ideas to inspire people to live better, healthier and more sustainable lives. O昀昀ering a food range that makes more sustainable, healthier eating delicious and a昀昀ordable for the many people.

14 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Circular & climate positive By 2030, our ambition We have only one planet, with The global resource scarcity is already limited resources. Pressure on impacting the IKEA business and, more importantly, the lives of people throughout is to become forests, 昀椀sheries and agriculture, the IKEA value chain. To be people and climate positive and loss of biodiversity and wildlife, planet positive in the future we must further regenerate resources ocean pollution, erosion of soil develop responsible sourcing programmes, and increasing levels of air and continue to improve resource utilisation and while growing the freshwater pollution a昀昀ect the dramatically reduce greenhouse gases in IKEA business lives and livelihoods of millions of absolute terms, independent of how much we people around the world. grow the IKEA business.

15 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Circular & climate positive What we have done so far Our ambitions for 2030 We are committed to Our approach of making more from less has enabled By 2030, our ambition is to be a circular Transforming into a circular business 1. By FY50 at the latest, reduce the absolute Leading regenerative projects on degraded the IKEA business to reduce waste and become more business built on clean, renewable energy and greenhouse emissions from the IKEA land, deforested areas and agriculturally e昀케cient in all we do. regenerative resources, de-coupling material Prolonging the life of products and value chain by at least 90%, compared to cultivated areas. use from our growth. The aim is to end our materials, using resources in a smarter baseline year FY16. We have also come a long way in transforming how we dependency on virgin fossil materials and way and meeting customers in new ways. Becoming water positive by leading and source more sustainable materials. Since 2015, 100% fuels. We will contribute to limiting the global 2. Any remaining greenhouse gas emissions developing water stewardship programmes. of our cotton, 昀椀sh and seafood have come from more temperature increase to 1.5°C by the end of Turning waste into resources, sending zero are neutralised through removing and Leading regenerative projects to clean sustainable sources (BCI+, MSC, ASC). the century by reducing the greenhouse gas waste to land昀椀ll. storing carbon within the IKEA value chain polluted waters and protect biodiversity. emissions of the IKEA value chain in line with and without the use of carbon o昀昀sets. Speci昀椀cally focusing on leading projects to We are continuously working on our goal the 1.5°C target, while also contributing with Taking the lead in transforming secondary clean plastic pollutants from oceans. to source 100% of our wood and paper from more additional reductions in society. We will also materials (i.e. reused and recycled materials) Striving towards 100% renewable energy sustainable sources. And we have taken steps to begin contribute to a world of clean air and water into clean and safe resources. (electricity, heating, cooling and fuels) and Sourcing wood, cotton, food, and other raw to phase out virgin fossil plastic from the IKEA product and improved biodiversity. electri昀椀cation across the IKEA value chain. materials from more sustainable sources. range, a focus that will also continue towards 2030. Sourcing and producing renewable and recycled materials with a positive Promoting on-site renewable energy Providing and promoting services, solutions, We have been vocal in our support for a transition to environmental impact. generation and new installations to make inspiration and o昀昀ering easy access to a low carbon economy and limiting climate change to more renewable energy available to the knowledge to prolong the life of product and 1.5°C and have invested heavily in renewable energy Establishing and promoting systems and many. materials. Inviting and enabling customers and improved energy e昀케ciency. services to enable a circular economy. and other partners to be part of the solution Actively reducing air pollutants. by making it easy to buy, 昀椀x, sell, share and give away products. Becoming climate positive Continually improving e昀케ciency (energy, material, logistics, waste, etc.) to reduce Reducing more greenhouse gas emissions overall energy demand. than the IKEA value chain emits, while growing the IKEA business. This will be achieved without relying on carbon Regenerating resources, protecting o昀昀setting. ecosystems and improving biodiversity By FY30, reduce the absolute greenhouse Continuing to secure and develop gas emissions from the IKEA value chain by responsible sourcing standards that at least half, compared to the baseline year include environmental, social and animal 1 FY16. welfare criteria. By FY50 at the latest, reach net-zero Becoming forest positive, promoting greenhouse gas emissions from the IKEA sustainable forest management to eliminate value chain. To reach net-zero the following forest degradation and deforestation. two conditions must be met: Using innovative approaches to forest management, protection, restoration and 1 regeneration. The Greenhouse Gas Protocol (scope 1, 2 and 3 emissions)

16 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Fair & equal The IKEA business impacts millions decent and meaningful work across the IKEA value of people across our value chain. chain, and further developing into an equal, diverse We recognise our responsibility to and inclusive business. This will be based on a solid By 2030, our ambition ensure we always respect human understanding of our social footprint. is to play our full rights and understand the impact We will, as a business, further strengthen our role part in contributing our business has on both people and and approach in relation to the many instabilities the communities where we operate. the world faces today, including pandemics, IKEA is a values-based business and to a fair and equal geopolitical con昀氀icts, technological shifts, climate society by respecting has always strived to put caring for change and biodiversity loss. We will take action people at the heart of our decision- to strengthen the resilience of people in our value human rights, making. chain and in the communities where we operate, creating a positive focusing on those who are most vulnerable. This By 2030, our ambition is to play our full part in includes supporting people in adapting to climate impact for people contributing to a fair and equal society by respecting change and ensuring a just transition to a net-zero across our value chain human rights, creating a positive impact for people and circular economy. and contributing to across our value chain and contributing to resilient While growing our business to reach more of the societies. many, we must ensure that people across our resilient societies Our responsibility includes everyone in the IKEA value chain can thrive and provide a good life for value chain: IKEA co-workers, co-workers at our themselves and their families. Our business is built business partners and people working in other parts by people. To thrive as an organisation, we must of our value chain, our customers and the families ensure the well-being of people, leaving no one of these people as well as the communities where behind. we operate. This is a big undertaking – but also an In addition, we will advocate for a more fair and opportunity – to contribute to positive change. equal society, in line with our commitments and We will do this by taking our full responsibility as in collaboration with policymakers and external a business to respect human rights and ensure partners. ethical business practices, providing and supporting

17 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Fair & equal What we have done so far Our ambitions for 2030 We are committed to As a home furnishing business with a vision to create a By 2030, our ambition is to play our full Being a responsible business and contributing Securing a just transition2 to a net-zero and Actively providing livelihoods and opportunities better everyday life for the many people, IKEA has long part in contributing to a fair and equal to resilient societies circular economy with a focus on enabling to marginalised groups of people in the IKEA been working in di昀昀erent ways to contribute to a more fair society by respecting and promoting decent work through, for example, upskilling and value chain and beyond. and equal society through our business and by advocating human rights across the value chain and Respecting human rights and children’s rights reskilling to meet future demands. for change. contributing to resilient societies. We by operationalizing the UN Guiding Principles on Promoting a human-centric approach to our recognise our responsibility to address the Business and Human Rights and the Children’s Providing and promoting that everyone in the digital touchpoints and data-driven processes, We have a long-standing commitment to respecting negative impacts of our business and will Rights and Business Principles, ensuring we IKEA value chain is empowered to play an active ensuring equality, diversity and inclusion. human rights and have been working to develop our always seek to create a positive impact for address our most critical human rights risks role in their work. Everyone is free to join or form human rights due diligence approach in line with the UN people. We will provide and support decent and impacts across our value chain. We are also associations of their choice (or to refrain from Ensuring our marketing and communication Guiding Principles on Business and Human Rights. and meaningful work, including providing committed to promoting human rights and doing so) and bargain collectively. are not discriminatory, but actively challenge and promoting a living wage and ensuring children’s rights in society. stereotypes and promote diversity. We continue to focus on vulnerable groups – children’s a just transition. We will ensure that IKEA Providing and promoting that everyone in the rights have always been at the heart of what we do – contributes to a more equal, diverse and Ensuring ethical business practices, including IKEA value chain is recruited responsibly and is and we continue our e昀昀orts to integrate respect for inclusive society, through our business combatting corruption, securing ethical handling free to enter and end employment. children’s rights in all our business operations in line with practices as well as our products, services of data and digital technology, complying with the Children’s Rights and Business Principles. To reach and communication. We will also use our both the letter and the spirit of the law when vulnerable groups furthest away from the labour market, size and in昀氀uence to advocate for a fair it comes to corporate tax policies, and being Being an equal, diverse and inclusive business we have partnered with social entrepreneurs and social and equal society. transparent about taxes paid. Embracing all dimensions of human diversity businesses to create job opportunities and improve livelihoods. Securing a strong approach in relation to climate, and strive to re昀氀ect the demographics of the health, political and social justice crises to secure societies in which we operate. Actively working to We have had for a long time a focus on providing and the safety, livelihoods and resilience of our co- prevent discrimination and ensuring equality of promoting decent work for people across our value chain. workers and partners across our value chain. opportunity and treatment. Most recently by developing a Responsible Wage Practices Framework that takes a holistic approach to wages, Engaging with communities building on our role Promoting accessible and inclusive workplaces placing equal focus on equality at work, pay principles, as a home furnishing business and leader in life both in structure and culture, where people can competence, enabling dialogue and a living wage. at home to create a positive social impact. be themselves and everyone’s voice is heard. 1 Responsible Wage Practices is an IKEA programme and related framework and methodology which IWAY – our supplier Code of Conduct, is the base for Being a child-friendly business, securing child takes a holistic approach to the subject of wages by 3 placing equal focus on equality at work, pay principles, our work to secure respect for human rights and good Providing and supporting decent and safeguarding, family-friendly practices and competence, dialogue and a living wage. working conditions at our suppliers. In 2021, we launched meaningful work across the IKEA value chain inclusion and empowerment of children and 2 ILO de昀椀nition: “A Just Transition involves maximizing a total system upgrade with the introduction of IWAY youth. the social and economic opportunities of climate 1 action while minimizing and carefully managing 6, which has a stronger emphasis on supporting our Providing living wages and income in IKEA suppliers to develop and reach even higher standards, operations and support the same among our Developing an inclusive and socially impactful any challenges – including through e昀昀ective social business partners and in the wider sectors of o昀昀er that mirrors the needs of society and dialogue among all groups impacted, and respect for beyond compliance. fundamental labour principles and rights”. which we are a part. reaches as many people as possible. 3 Family-friendly practices are de昀椀ned as paid parental leave, supporting breastfeeding, a昀昀ordable, accessible Providing and supporting safe and healthy work, Securing a more inclusive and diverse IKEA value and quality child care and providing child bene昀椀ts labour rights and social protection, and striving chain by integrating social businesses, minority- https://www.unicef.org/sites/default/昀椀les/2019-07/ UNICEF-policy-brief-family-friendly-policies-2019.pdf towards securing stable and predictable work for owned enterprises and small and medium-sized everyone in the IKEA value chain. enterprises (SMEs).

18 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Enablers: how we make it happen Through our strength, size Advocacy Inclusiveness and community engagement Reporting and transparency and business setup we can think and act long-term to We use our size and in昀氀uence to play an We seek always to be inclusive, and actively We are open and transparent and allow make our commitments active role in advocating harmonised and engage in the communities where we operate others to learn from our successes, failures, ambitious legislation to support and enable through IKEA stores, o昀케ces, warehouses, challenges and ways of working. IKEA is become reality. Central to our sustainability objectives for 2030. factories and online. fully committed to transparently reporting this process are transparency on our progress in line with relevant and accountability. We are Co-creation and partnership Business incentives standards, and welcome relevant new determined to be a positive reporting requirements. To move from force in society, and inspire We work together with innovative We secure that investment mechanisms, vision to action, each business needs to organisations that develop value for performance indicators and other incentives set clear goals and targets to prioritise and and in昀氀uence others, through measure our progress. a set of strategic enablers: people, the planet and our business. are in place throughout the business to We seek out new partners with unique support the transformational changes expertise, perspectives and insights. needed. Communication and marketing Entrepreneurship and innovation Codes of conduct – IWAY and IConduct We use communication to inspire a more sustainable way of living, secure co-creation We rely on our entrepreneurial spirit for We will continue setting clear standards and continuous dialogue. Our ambition innovation and turning challenges into and expectations for the IKEA business is to inspire and enable people to make a opportunities. We also look to others, such relationships and ourselves. The minimum positive di昀昀erence in their everyday lives, in as social entrepreneurs, for ideas and expectations we place on ourselves, and our their communities and in society at large. inspiration to help tackle inequality and business partners are found in our supplier promote human rights. code of conduct IWAY and in the franchisee code of conduct, IConduct.

19 - IKEA Sustainability Strategy - People & Planet Positive - © Inter IKEA Systems B.V. 2023 Overview of ambitions and commitments People Healthy & Circular Fair & Planet sustainable & climate & Positive living positive equal Ambitions for 2030 Inspire and enable more than 1 billion Become climate positive and Play our full part in contributing to a people to live a better everyday life regenerate resources while growing fair and equal society by respecting within the boundaries of the planet the IKEA business human right, creating a positive impact for people across our value chain and contributing to resilient societies Commitments Creating a movement in society around Transforming into a circular business Being a responsible business and better everyday living contributing to resilient societies Becoming climate positive Inspiring and enabling people to live Providing and supporting decent and healthier, more sustainable lives Regenerating resources, protecting meaningful work across the IKEA value chain ecosystems and improving biodiversity Promoting circular and sustainable Being an equal, diverse and inclusive consumption business Key enablers Advocacy, co-creation & partnership, entrepreneurship and innovation, inclusiveness