Ingka Group steps up circular push and low-carbon operations

Ingka Group, the largest IKEA retailer, has scaled up its Buyback service by 39 per cent, achieved 60 per cent zero-emission home deliveries and sourced nearly 95 per cent of its electricity from renewable sources in financial year 2025 (FY25), according to its Annual Summary and Sustainability Report.

The report shows that Ingka Group matched 94.8 per cent of its operations with renewable electricity during the year, while continuing to focus on food waste reduction and the expansion of circular services for customers. The company said these efforts form part of its wider commitment to building a more resilient business while enabling customers to live more sustainably.

Total revenue for FY25 stood at EUR 41.5 billion. The company recorded higher store and online visitation and volumes, but revenue declined by 0.9 per cent year on year as it continued to prioritise keeping prices low. Operating income reached EUR 1.5 billion, equal to 3.5 per cent of sales, compared with 3.0 per cent in 2024.

Ingka Group reported a 70.6 per cent reduction in absolute emissions from its own operations (Scope 1 and 2) compared with its FY16 baseline, and a 22.3 per cent reduction since FY24. The company said closing the remaining gap to reach 100 per cent renewable electricity sourcing is an immediate focus, alongside further emission reductions across its value chain.

Zero-emission home deliveries increased to 60.1 per cent, up from 41.1 per cent in the previous year. Production food waste has been reduced by 60 per cent since FY17, avoiding waste equivalent to 9.6 million meals in FY25 and 47.5 million meals since FY17.

The Buyback service sourced almost 686,500 used IKEA products during the year, compared with 495,000 in FY24. Ingka Group said 424 stores now operate “As-is” areas for second-hand and discontinued items. It also launched a peer-to-peer second-hand marketplace for IKEA furniture in Norway, Portugal and Spain, with plans to scale it across Europe.

The company also reported progress in workplace equality and inclusion. Its gender pay gap decreased to 3.4 per cent from 4.0 per cent in FY24, and fewer than 0.6 per cent of co-workers required monetary adjustments to close pay gaps.

The FY25 report is the first to be structured around Environmental, Social and Governance (ESG) pillars, as part of preparations to align more closely with the EU Corporate Sustainability Reporting Directive and European Sustainability Reporting Standards. It covers performance across IKEA Retail, Ingka Investments and Ingka Centres.

Ingka Group said the majority of its climate footprint is linked to the sourcing, production and transportation of the IKEA range. Data covering the company’s total carbon footprint for FY25 was not available at the time of publication and will be included in the FY26 reports.