Our thinking

Decoupling profit and carbon growth

2 February, 2024

Complete systems transformation aside, decoupling carbon and growth is pretty much the holy grail of sustainable economic activity. Which makes Ikea’s news – they have done it! – particularly exciting. Ikea’s total carbon footprints (including scope 1, 2 and 3 before you ask) decreased 24.3% from FY16 alongside a growth in profits of 30.9%.

How did they make this happen? Well first they increased energy efficiency, switched to renewable electricity and adopted electric vehicles within their operations. They are also working towards a reduction in the climate footprint of products and food by promoting those with lower carbon footprints. And they are providing renewable energy to IKEA suppliers. While their current target is to reduce by 15%, they are now strengthening commitments to align with the Science Based Target initiative (SBTi) Corporate Net Zero standard and are looking to reduce by 50% vs a 2016 base.

While you could argue that switching to renewable energy, while commendable, is a relatively easy win which is hard to sustain (once it’s done it’s done), and that the real proof will be in whether this decoupling can continue through the years to come, we think that would be a little curmudgeonly. Instead, we think it should be celebrated, and poses a brilliant challenge to others. What can you do to accelerate economic growth which reduces carbon, rather than the opposite? And how can you make sure it doesn’t stop with you, but goes all the way through your value chain as well?

By Anna Heis