How IKEA's Supply Chain Circularity Strategy Backs EU Goals

In the evolving landscape of supply chain management, transitioning towards a circular economy presents substantial opportunities to enhance sustainability and efficiency.

This complex transition is being spearheaded by Hege Sæbjørnsen, Global Circular Strategy Transformation Leader at Ingka Group, IKEA's largest franchisee.

“The whole economy is linear; for 200 years, industrial systems have been designed to take resources, manufacture products, sell them, and not think about what happens at the end," she says.

Emphasising the need to transform these traditional models, Hege's role involves simplifying this complexity for different parts of the business to foster actionable change.

Supply chain benefits of a circular economy

The European Parliament has set a transformational target: achieving a circular economy by 2050. This shift promises several key advantages.

These include environmental protection by reducing the consumption of natural resources and significantly cutting down greenhouse gas emissions.

Furthermore, it lessens the EU's dependency on raw material imports - a pressing concern illustrated by the US$193bn cost of imports and exports in 2023.

Embracing a circular economy also aims to heighten competitiveness, stimulate innovation, spur economic growth and create employment opportunities.

With more than 9500 of its products assessed for circularity, Ingka Group is leading efforts to support the EU's circularity objectives, underlining the importance of supply chain innovation in achieving these broad goals.

Driving circular strategy at IKEA

Hege, who has over a decade of experience in IKEA's sustainability sector, now leads the company's circularity strategy.

Her work involves coordinating cross-functional teams and steering the company's growth and innovation portfolios.

Hege's educational background spans a BA in Graphic Design and an MA in Media, Image and Communication, coupled with sustainability qualifications from prestigious institutions like the University of Cambridge.

IKEA's circular commitments in supply chain

IKEA's approach to nurturing circularity within its supply chain is rooted in four foundational commitments:

• Designing products with intrinsic circular capabilities. Each product is engineered to be reused, refurbished, remanufactured, and ultimately recycled. Examples include extendable beds that adapt as a child grows, mitigating the need for replacements.
• Utilising renewable or recycled materials, such as bio-based glue from corn starch, which has a lower environmental impact compared to traditional fossil-based alternatives.
• Expanding circular services by increasing the number of marketplaces that support furniture buy-back programs and offering assembly parts to prolong furniture lifespan.
• Collaborating with over 1600 suppliers to minimise environmental impacts throughout the supply chain.

Hege says: “There’s a line I love from IKEA: ‘complexity for the few, simplicity for the many.’ It’s not to undermine people but to recognise that businesses developing products and services need to understand people’s needs and create affordable, sustainable options.

"We cannot expect people with busy lives to figure it all out alone. It requires partnership, and we are working towards this at IKEA and Ingka.”

Overcoming circularity challenges in supply chains

The principal challenge for IKEA in embracing circularity lies in navigating its inherent complexity.

Circularity touches on diverse aspects like finance, nature, climate, and social factors, each influencing supply chain practices.

Hege adds: “Internally, sustainability has moved from an operational topic to a core strategic approach, with circularity embedded across the value chain, from material choices to product design, services for prolonging product life, campaigns, advocacy and investment in recycling capacity.

"It has been a phenomenal change, but pragmatically, there’s still a long way to go to scale initiatives, reflecting where most companies are on circularity.”

This narrative underscores that while IKEA is progressing towards integrated circular supply chain models, it is a shared path that requires ongoing collaboration, innovation and strategic adaptation across the industry.