Ingka Group Invests €1.5B for Renewable Energy Transformation

November 14, 2024  by Karen Parrish in Business Strategy, Industry   

“Ending our reliance on fossil fuels is essential to tackling the climate crisis and halving global emissions by 2030. At IKEA, we started our journey in 2009 and have invested heavily in both on- and offsite renewable energy production to enable the transition. We have already reduced emissions across our IKEA stores by 60.4% since 2016 and 96% of our retail sites now use renewable electricity. The future of energy must be renewable, and this additional investment will enable us to reduce our carbon emissions, increase efficiency and lower costs in the long term. It’s also good for business – a win-win,” says Jesper Brodin, CEO, Ingka Group.

Ingka Group is committed to the Paris Agreement and works towards drastically reducing GHG emissions and phasing out fossil fuels in line with its validated Science Based Targets (SBTi). Efforts towards the goal of using 100% renewable electricity across its retail operations has already contributed to Ingka Group reducing its overall emissions by 24.3%, against a 30.9% increase in revenue (FY16 baseline) *.  Heating and cooling are currently the largest drivers of emissions with Ingka’s own operations category.

This additional investment is part of the company’s commitment to decarbonize its operations and value chain. It will be used to accelerate ongoing efforts to retrofit IKEA units with energy efficiency upgrades and renewable heating and cooling. All new units will be built with renewable heating and cooling, and work is already under way to retrofit 150 existing properties.

“Transitioning to renewable heating and cooling is a vital enabler on our decarbonization journey; however, it’s a complex and costly process. This investment means we can progress further and faster with our plans – and we know it will pay off in the long term”, says Karen Pflug, chief sustainability officer, Ingka Group.

The investment into own operations comes in addition to a EUR 7.5 billion commitment in off-site renewable energy production and technologies. To date, Ingka Group´s investment arm Ingka Investments, has already invested and committed to over EUR 4 billion in off-site renewable energy, making them a mid-sized renewable energy production company.

“As businesses, we have an important role to play in phasing out fossil fuels, but we cannot do it alone. We welcome the COP28 pledges on renewable energy and energy efficiency and consensus on transitioning away from fossil fuels. Now, to move from pledges to impact, governments and businesses need to combine efforts and address obstacles, such as complex and inefficient policy, permitting and reporting frameworks. We have five years left to deliver to the Paris Agreement – with the right commitment and leadership we have it in our hands.” Jesper Brodin adds.

To enable the transformation across society, Ingka Group welcomes the following actions from governments: 

• Rapidly scaling up renewable energy through targets as well as incentives and at the same time phasing out fossil fuel and connected subsidies.
• Investing in the required grid infrastructure fit for distributed renewable generation and the needs for electrification.
• Set stronger energy efficiency regulations across sectors.
• Simplify permitting processes around renewable energy projects and infrastructure while respecting a just transition, local communities, and environmental standards.
• Encourage and incentivize the renovation and retrofitting of commercial and residential buildings including insulation, heating/cooling, and energy storage.