Ikea ESG Rating

00:06:02
https://www.youtube.com/watch?v=a2KT8HngoTY

Sintesi

TLDRThe video provides an overview of IKEA's global operations, including its extensive store network, employee count, and annual customer base. It addresses sustainability challenges, particularly regarding raw material sourcing, deforestation, and labor standards. The video highlights IKEA's recent buy-back program aimed at promoting a circular economy and reducing waste, while also discussing the company's ESG rating, which reflects its performance in comparison to competitors in the furniture industry.

Punti di forza

  • 🌍 IKEA has over 400 stores worldwide.
  • 💼 Employs 200,000 people and serves 1 billion customers annually.
  • 💰 Sales revenue reached 41 billion euros in 2019.
  • 🌲 Responsible for 1% of global deforestation in 2017.
  • ♻️ Launched a buy-back program for used furniture in 2020.
  • 📈 Revenue increased from 22 billion in 2010 to over 40 billion in 2019.
  • 🔍 ESG rating of IKEA is AA, indicating strong performance.
  • ⚖️ Faces challenges in raw material sourcing and labor standards.
  • 🛒 Customers receive vouchers for returning used products.
  • 🌱 Aims to combat climate change and promote sustainability.

Linea temporale

  • 00:00:00 - 00:06:02

    IKEA, a global furniture retailer, operates over 400 stores with 200,000 employees and serves 1 billion customers annually. In 2019, it reported sales revenue of 41 billion euros. The company sources raw materials worldwide, raising concerns about sustainability, particularly regarding wood use and deforestation, which impacts climate change. Additionally, labor standards in its supply chain and product quality have been criticized, with past scandals affecting its reputation. In 2017, IKEA was linked to 1% of global deforestation, and while its revenue has grown significantly, concerns about low product quality and labor practices in poorer countries persist. To address these issues, IKEA launched a buy-back program for used furniture during Black Friday 2020, aiming to promote a circular economy and combat climate change. This initiative, available in 27 countries, offers customers vouchers for returned products, potentially improving IKEA's eco-friendly image while also increasing sales. An ESG analysis rated IKEA's risk exposure and management efforts, resulting in a score of 6.7, which was adjusted to 7.2 based on peer comparisons, leading to an overall ESG rating of AA.

Mappa mentale

Video Domande e Risposte

  • How many stores does IKEA have worldwide?

    IKEA has over 400 stores worldwide.

  • What was IKEA's sales revenue in 2019?

    IKEA's sales revenue in 2019 was 41 billion euros.

  • What is IKEA's role in deforestation?

    IKEA was responsible for one percent of deforestation on earth in 2017.

  • What recent program did IKEA launch to promote sustainability?

    IKEA launched a buy-back program for used furniture during Black Friday 2020.

  • What is IKEA's ESG rating?

    IKEA's ESG rating is AA.

  • How does IKEA's buy-back program work?

    Customers can return used IKEA products for a commercial voucher up to 50% of the initial price.

  • What are the main sustainability issues IKEA faces?

    IKEA faces issues related to raw material sourcing, labor standards, product quality, and climate change.

  • How does IKEA's revenue trend from 2010 to 2019?

    IKEA's revenue increased from 22 billion in 2010 to over 40 billion in 2019.

  • What is the purpose of IKEA's buy-back program?

    The program aims to combat climate change and reduce excessive consumption.

  • How does IKEA's performance compare to its competitors?

    IKEA performs more prominently than most competitors, leading to an adjusted ESG score of 7.2.

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Sottotitoli
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Scorrimento automatico:
  • 00:00:02
    the company ikea
  • 00:00:04
    has over 400 stores worldwide 200
  • 00:00:07
    000 employees and 1 billion customers
  • 00:00:10
    each year
  • 00:00:11
    the sales revenue in 2019 was 41 billion
  • 00:00:16
    euros so we wonder if ikea can
  • 00:00:19
    ever be suitable
  • 00:00:23
    as we all know that iqrcs furniture and
  • 00:00:26
    purchases
  • 00:00:27
    raw materials everywhere on the planet
  • 00:00:31
    first of all we focus on the raw
  • 00:00:33
    material sourcing issue
  • 00:00:35
    whether it is safe and sustainable
  • 00:00:38
    and the largest scale use of wood can
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    cause deforestation
  • 00:00:42
    we know that forests can absorb carbon
  • 00:00:45
    dioxide
  • 00:00:46
    beneficial for climate it naturally
  • 00:00:49
    leads us to pay attention to the
  • 00:00:51
    climate change vulnerability issue
  • 00:00:55
    the other one related to the fact is the
  • 00:00:58
    supply chain labor standards issue
  • 00:01:01
    the quality of ikea products has always
  • 00:01:04
    been a hot topic
  • 00:01:06
    in the society and some substandard
  • 00:01:09
    furniture may even bring life stress to
  • 00:01:12
    consumers so we can easily notice the
  • 00:01:15
    product safety and
  • 00:01:17
    quality issue due to ikea's business map
  • 00:01:21
    is all over the world the issue of
  • 00:01:24
    cooperation and instability has also
  • 00:01:27
    become
  • 00:01:28
    particularly important from the news
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    report
  • 00:01:32
    ikea was called in a corruption scandal
  • 00:01:35
    in 2006.
  • 00:01:38
    now we are going to talk about the
  • 00:01:39
    recent controversial action from ikea
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    the company is the third biggest
  • 00:01:45
    consumer of wood in the world
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    in 2017 it was responsible for one
  • 00:01:50
    percent of deforestation on earth
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    the revenue has increased each year
  • 00:01:55
    starting from 22 billion
  • 00:01:57
    in 2010 to more than 40 billion in 2019
  • 00:02:03
    today the conception of wood is still
  • 00:02:06
    huge
  • 00:02:06
    and ikea which is a 1 billion customers
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    a year
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    in order to increase its market share
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    all over the world
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    it offers to customers almost the lowest
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    price
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    of the market on the other hand product
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    quality is low
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    and wood production and workforce in
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    poor countries
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    unable to cut wages and reduce cost of
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    goods sold
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    we would like to focus on the recent
  • 00:02:32
    program that ikea implemented
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    to promote the circular economy and
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    improve its business model
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    this year ikea launched a one program
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    during the black friday and the company
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    will buy
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    back some used furniture from 21st
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    november to 3rd december 2020.
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    the program part of the company's larger
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    effort to combat climate change
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    will be available in 27 countries
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    ikea hopes that the initiatives will
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    help
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    its customers take a stand against
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    excessive conception
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    this black friday and in the years to
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    come
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    these programs will also be implemented
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    from 2021 in several stores
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    all over the world however
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    even if gear wants to reduce waste and
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    overall conception
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    as well as its global global climate
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    footprint
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    customers will receive a commercial
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    voucher
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    up to 50 percent of the initial price
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    but only available for ikea products
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    so we might wonder if this program will
  • 00:03:48
    not lead
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    to a different goal it can be seen
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    as an encore design program with no
  • 00:03:54
    waste
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    but it also be a way of improving the
  • 00:03:59
    image of the company
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    in order to be seen as an
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    eco-responsible company
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    actually customers will bring their
  • 00:04:07
    products back
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    more often and thus increase sales and
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    turnover we have checked ikea
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    sustainability report
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    of 2019 and discussed in ikea's
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    controversial
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    cases according to the theoretical
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    framework of esg methodology
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    we set a rate for each issue and then
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    scored them
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    based on risk exposure and management of
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    iqr
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    risk exposure is scored on 0 to 10 scale
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    with 0 representing no exposure
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    and the time representing very high
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    exposure
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    management is scored on a scale of
  • 00:04:52
    0 to 10 where 0 represents no
  • 00:04:56
    evidence of management efforts and the
  • 00:04:58
    term represents
  • 00:04:59
    indications of very strong management
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    we combine these two dimensions to score
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    from the esg rating card you can see the
  • 00:05:11
    weighted score is
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    6.7
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    the next step is to adjust the score
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    according to the situation of their
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    peers
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    in furniture stores industry we notice
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    in the top 10 competitors
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    they are actually furniture amazon
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    target walmart wefair tesco
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    sales american woodwork and the cartier
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    since ikea performs more prominently
  • 00:05:41
    than most competitors
  • 00:05:43
    it is adjusting to 7.2
  • 00:05:47
    finally according to the let reading
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    table
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    we got the result of aa so in conclusion
  • 00:05:54
    the ikea's esg reading is aa
  • 00:05:59
    thanks for your attention
Tag
  • IKEA
  • sustainability
  • deforestation
  • ESG rating
  • circular economy
  • buy-back program
  • furniture industry
  • climate change
  • labor standards
  • product quality