Many large companies are now coming to appreciate the true value of sustainability, not only in terms of environmental damage, but also in terms of their reputation and market share. Amazon and Google have both invested in renewable energy and Apple has bought forest in the US so that supplies of the sustainable packaging goods it needs can be increased. Furniture giant, Ikea, has also bought forest, but in the Baltics and Romania, and already owns Polish wind farms. Now, the company has decided to invest in plastic recycling and has bought a 15% share in a Dutch plant.
Ikea plans to ensure that its plastic products, which account for around forty percent of the total plastic used by the company, are made from 100 percent recycled or recyclable materials, by August of 2020. The investment in the plastic recycling plant is part of the £2.52bn that Ikea has allocated to sustainability investments.
Better control over the supply chain will help Ikea to become more sustainable because it will be better able to avoid activities that damage the environment, such as plastic waste and deforestation. This is the first time Ikea has invested in plastic waste recycling and the firm views it as a learning opportunity. Since the company is so reliant on high quality plastic and recycled plastics to be used in the manufacture of its products, it is seen as an important step towards future success.
It is thought that there may be a scarcity of recycled plastic if regulation in the future demands that a percentage of this material must be included in all new products, so investing in the plant will guarantee Ikea a reliable supply.
Some criticism has been levelled at Ikea and other businesses that have chosen to expand their operations into the supply chain. Concern has been expressed about both the motivation and consequences of this form of business expansion. For example, Professor Jakob Rehme, from Linköping University in Sweden, says that an important driving force in many cases is to avoid regulation and create a situation in which companies engage voluntarily. Although this can be advantageous, it may also have the effect of creating difficulties for smaller companies and those from developing nations. Others, such as Donna Marshall from University College, Dublin, have expressed the view that the changes may be more about greenwash, rather than real progress in reducing the environmental impact a company makes. This type of PR can be very beneficial for a company, but does not necessarily reflect its true position.
Ikea does not accept these criticisms of its investment in the Dutch plastic recycling plant. The company’s acting chief sustainability officer, Pia Heidenmark Cook, states that its approach is not to buy up recycling companies, but is part of learning more and better understanding upcycling. The investment will help the Dutch company to develop its capabilities.
Next year, Ikea is due to open a store in Hyderabad, India, and to increase revenue to £42.29bn by 2020, and Cook claims that the circular economy is a necessary part of the expansion of the company, without increasing the use of virgin materials.