The Year in Brief

Introduction A Message from Steve

Twice last year an international community got things absolutely right: the Paris Agreement on climate change and the Sustainable Development Goals (sdg). All these agreements mark a significant step forward in the journey towards a cleaner, fairer world, and we are fully committed to both.

The Paris meeting turned climate change from a point of disagreement to agreement. It’s the fastest ever signing of an international settlement and has created huge momentum. We threw everything that we had behind Paris, going all-in to demonstrate our support for government effort and show how small change to the way we live can add up to make a big difference to the planet.

These global agreements are significant, but they are just the beginning. Governments and business must now be bold—moving from commitments to action. And while some will try, no business or government should seek to stand against progress. They will find themselves on the wrong side of history.

We are making good progress against the commitments in our People & Planet Positive strategy, but we have a lot more to do. We must build on our successes and continue to develop a culture which inspires us to hit every target. I am proud of the great progress that we have made with our code of conduct for suppliers—IWAY. It is an integral part of the relationship with our business partners that is contributing to better lives for workers by supporting decent jobs. We support vulnerable

We must build on our successes and continue to develop a culture that inspires us to hit every target.” “

groups in our value chain by, for example, working in partnership with the International Organization for Migration to protect migrant workers from abuse.

Similarly, we promote gender equality in everything we do and also support our lgbt+ co-workers’ right to be themselves. We know that taking a positive and proactive approach to equality is not just good for society, also our co-workers and our customers, but it benefits our business too.

We’re sourcing more of our materials from more sustainable sources—61% of our wood and 100% of our cotton. We are working with others to make sustainable practices the norm in the industry, not just our own supply chain. We also want a waste-free world, and that is why we support a shift to the circular economy that turns waste into a resource for our new products. We are using more recycled content in our products, supplying over one million spare parts for easy repair each year, and looking at how we can support our customers to prolong the lives of their products. These are important steps and we’re determined to do.

This has been a year of change in the IKEA Group, and it’s fantastic to see my fellow co-workers staying focused on keeping our sustainability promises while we transform the way we organise and run our business. Meanwhile, we’ll keep delighting our customers with small but important innovations, like our new well-designed bicycle and low-carbon, delicious veggie balls—part of our mission to enable the many people to enjoy a more sustainable life at home.

STEVE HOWARD Chief Sustainability Officer, IKEA Group INGKA Holding B.V. and its controlled entities

Introduction The Year in Brief

1RAISING OUR VOICE ON CLIMATE CHANGE

World leaders met in Paris in December 2015 and achieved a historic agreement to tackle the climate change. We were there—calling for climate action, lighting up the city with 800,000 Christmas lights, powered by clean energy.

279 MILLION LED BULBS SOLD

All of the cotton that we use for our products comes from more sustainable sources. 4 In fy16, 61% of wood came from more sustainable sources, 5 and we aim for 100% by 2020.

3COTTON AND WOOD FROM MORE SUSTAINABLE SOURCES

Switching our entire lighting range to energy efficient led is one of the ways we are going all-in to tackle climate change. If each of bulbs sold replaced an incandescent bulb, they can save enough energy to power almost 650,000 households for a year! 3

4GOODBYE EPS

Around the world, millions of people have had to leave their everyday lives behind. In many IKEA retail countries, co-workers have dedicated time and resources to creating better conditions for newly arrived refugees.

5SUPPORTING REFUGEES

And hello fibre-based, fully recyclable materials! We have replaced oil-based expanded polystyrene (eps) in IKEA flat packs with a sustainable alternative. This will save 8,000 tonnes of eps foam a year—enough to fill more than half of the Empire State Building!

6A WORKPLACE FOR EVERYONE

As a result of the Soft Toys for Education and Brighter Lives for Refugees campaigns, IKEA Foundation donated eur 23.5 million. These funds will improve opportunities for children in some of the world’s poorest communities.

7EUR 23.5 MILLION RAISED DURING GOOD CAUSE CAMPAIGNS

We want to create a fully inclusive work environment where all our co-workers are able to be themselves. In 2015, IKEA Group became a member of the Workplace Pride Foundation, which strives for greater acceptance of lgbt+ people in the workplace and in society.

8EUR 2.1 BILLION FOR RENEWABLE ENERGY

We have invested eur 1.5 billion in renewable energy since 2009, and have committed a further eur 600 million. By August 2016, we had committed to own and operate 327 wind turbines and installed 730,000 solar panels on our buildings. In fy16 we produced renewable energy equivalent to 71% of the energy consumption of our operations. 6