About four years ago, Ikea announced it would spend 200 million euros ($230 million) to speed up its efforts to become climate-positive by 2030, meaning the Swedish furniture maker aims to reduce its greenhouse gas emissions by more than what its value chain emits—but without snuffing out growth. Those efforts range from the obvious, such as reforestation and using renewable energy in its manufacturing, to the less obvious, like making its popular Swedish meatballs and other food offerings more sustainably.
That has led to recent moves like Ikea's introduction of plant-based hot dogs. Jesper Brodin, CEO of Ikea's parent company, Inter Ikea Group, insists they taste as good as meat-based ones.
"Being a meat lover from my youth, I realized I had a lot to learn about the impact of the food on myself and on my surroundings," Brodin said in an interview with Fortune during Climate Week in New York this week. While plant-based hot dogs and the veggie burgers that preceded them might seem like small moves, Ikea is betting that similarly small efforts in all parts of its business will add up and help the company reach its sustainability goal. Related initiatives include its recently announced partnership with resale site eBay and repurchasing used Ikea furniture at its stores.
Brodin, a Swede who became CEO of the Netherlands-based company in 2017, is confident Ikea can hit its carbon-positivity goals by the 2030 deadline and says it is "within our reach." At the same time, he sounds a note of caution about Ikea's ambitious environmental goals. "I don't think anyone can say they are 'sure' and it's maybe better to be humble," he says.
This interview was edited and condensed for clarity.
Fortune: Ikea has pledged to be carbon-positive by 2030, now only six years and three months away. Are you sure Ikea can meet that deadline?
We have good initial plans, which have already been drafted. At the COP (the United Nations' annual conference on climate change) in 2016, when the climate agreement was presented, ours was one of the first corporate climate plans. Our climate plan addresses what is referred to as Scope Three (which includes related emissions from a company's suppliers and consumers), and it is actually more important for us to hit a 50% reduction target in Scope Three emissions. At bottom, this means we need to make sure we reuse about half of all the carbon emissions we have made. And 2030 is within our reach.
A philosophical question: Can the industrialized world still have thriving economies if we become less consumeristic?
It's an incredibly important question that we, as consumers, are asking ourselves, and the answer is absolutely. I'd say it's not a philosophical question, but rather, I'd say a practical question. If you take it from the opposite angle that by 2050, we need to reduce by 90% our carbon footprint (and by 50% by 2030) and that the only mode for us would be to limit consumption with an expanding population, it's not realistic given the need for food and the necessities of life and whatnot. So I would say that I am for a longer product life span and less unnecessary consumption.
Ikea furniture can be seen as having a comparatively short life span. What can be done to make sure Ikea's products have value in the secondary markets once a customer is done with them?
In the early 2000s, we did a project around quality and looked ourselves in the mirror and said our quality was uneven. The way we engineered our products was mainly about assembly. And now we have a big presence in secondary markets. It's quite logical when you think about it because a lot of the products are related to a life situation that is limited to certain years, like a changing table for a baby or moving out of your student apartment. Now, we are supporting platforms like eBay around the world. And we have a 'second life' in our own stores (a service through which Ikea buys back its products from customers).
Is there a place for artificial intelligence in your operations or things like the assembly instruction guides?
I had a wake-up call in January about not only the opportunity but the risky side of AI. We are now making our biggest effort so far to figure that out and taking our top 500 leaders through a program to be done by Christmas, where we will basically educate ourselves, explore opportunities and challenges, and look at it from an ethics point of view. Where are the borderlines for our engagement with AI? But, the first line of any AI intervention will be tailor-made solutions with specific tasks to reduce waste and to better understand consumer behaviors. I think I will have a smarter answer in a year or two.
Like Costco and its hot dogs, food is a big part of the Ikea experience. You recently introduced a plant-based hot dog. Why?
We have long seen food for Ikea as a complementary business to get people to basically stay with us for a good day out. Around 2012, we woke up to realize we are one of the biggest food providers in the world, and that comes with a responsibility. So, we drafted a strategy with suppliers and NGOs and educated ourselves about the climate and health impacts. Since then, it has progressed to a strategy for plant-based food. There were two aspects: that the taste and experience be as good or better and that we manage to make it affordable. For myself, it's interesting because when I do a blind test, I can't tell the difference, and I believe that's a true breakthrough because I'm intellectually a vegetarian.
Ikea items can be notoriously difficult to put together, and putting them together has been held up in the culture as a test of a couple's bond. Are you able to put Ikea furniture together and not have unused pieces mysteriously left over?
When I started with Ikea back in the 1990s, there was sometimes a missing screw that could be endlessly frustrating. We fixed that problem with a good engineering solution. That said, I'm not sure I could put together an Ikea product without the instructions. I've tried that, only to have to go back and get advice. It is, of course, associated with Ikea that you assemble things yourself, which in turn saves money. The good news for people who have any fear of doing the assembly themselves is that we are progressing with high speed in making product assembly faster. I would say a table at Ikea that might have taken 45 minutes to assemble yesterday today takes three, four minutes.
And that means less arguing by couples while assembling?
Hopefully.
