Ikea's Advice To Businesses On Low-Carbon Economy: Commit 100 Percent

Danish Furniture Giant Calls On Peer Retailers To Electrify Fleets
PARIS—Businesses that want to survive the transition to a low-carbon economy should strive for 100 percent transformation in whatever goals they set, Ikea's chief sustainability officer advised at the UN Climate Conference—100 percent renewable energy, 100 percent LED bulbs, 100 percent electric vehicles.
"It really creates clarity in a business," said Steve Howard, green leader of the Dutch furniture giant since 2011. "Whenever you leave ambiguity in a business—if you set a 90 percent target, more than 10 percent of the business wants to be the 10 percent, because change is difficult."
Give the whole company no choice, he suggested, and change goes better. "When you set a 100 percent target it's easy."
The climate summit, which has come to resemble a business conference, has been rife with talk of impending transformation and those businesses who won't survive it.
"Incumbents almost always fail," said Anthony Hobley of Carbon Tracker. If they didn't, the cameras in our phones would be made by Kodak, streaming video would be delivered by Blockbuster, and cars would be made by the same companies that made steam engines.
So the question has arisen more than once, particularly among investors here, what to do about the companies that are about to fail.
"How do we change these companies so they become a productive part of the future and not destroy a huge amount of value that's tied up in our investments and our pensions?" Hobley asked.
Howard proposes a 100 percent solution:
Ikea belongs to the RE 100, an alliance of corporations that have committed to 100 percent renewable energy to prop up the fledgling renewables sector by stimulating demand. These companies usually describe their mission in terms of the common good, but against the backdrop of concern here about fossilized assets, Howard's advice took a practical turn.
He appeared Monday on a panel about electric vehicles, alongside executives from BMW, Renault-Nissan and Chargepoint, a network of EV charging stations, to call on fellow retailers to convert their shipping and delivery fleets to 100 percent electric.
"We should set a really aggressive time frame for that," he said. "I don’t know what really aggressive is—it’s certainly this side of 2020 that we should be able to get to that point."
In September, Ikea dropped incandescent and fluorescent bulbs from its stores, committing to 100 percent LED. Committing to 100 percent meant placing massive orders that allowed Ikea to bring the bulbs to market at a lower price.
Executives noticed that once the stores committed to LED, customers seemed more willing to commit.
So in addition to electrifying their fleets, Howard wants retailers to fill their parking lots with charging stations, offering customers free electricity while they shop. Imagine if your furniture store gassed up your car.
For Ikea, 100 percent of parking lots would be 301 in 41 countries. They're at 40 percent right now.
Electrifying the fleet is a challenging prospect, even for the company proposing it. "We have, obviously, extensive transport," Howard said. Ikea ships 50 million cubic meters of home furniture around the world, and while it ships in what Howard said is "a very efficient way, still it's largely linked to fossil-fuel transit."
But collaboration between retailers will bring down prices and smooth the transition, he said. "And it's got to be the same for every retailer."
100 percent.
A few obstacles stand in the way—fleet vehicles need fast DC chargers. "Those vehicles don’t rest, they work hard, so you’ve got to be able to charge them quickly and get back onto the road to the next customer."
And universal charging is important, so any vehicle can plug into any charger in any country.
When the last few obstacles are overcome, Howard said, we will be able to say, "The day of the electric vehicle has arrived. Today it’s better for the customer and better for the environment than the technology of the past. So let’s accellerate that with aggression and purpose. Let’s go all in."