The Costs and Benefits of Being Proactive - IKEA

http://money.cnn.com/2008/11/25/news/companies/gunther_ikea.fortune/index.htm?postversion=2008112609
I recently read an article about Ikea’s sustainability efforts. I had known for awhile that they operated in a socially responsible manner, but I did not know just how proactive they have been. I have never shopped at IKEA, so I know very little about the store other than it’s a Swedish company that sells affordable and modern furniture. What I did not know was that IKEA has always been selling products in boxes and required assembly done completely by the customer. This saves money not only in terms of extra labor, but also in transportation. By only “flat-packing” their products they can cut down on the number of shipments and the amount of wasted space. As IKEA's president and CEO Anders Dalhvig says, "We must stop transporting air." They have recently stepped up sustainability efforts by pledging to purchase more and more of their wood from “sustainably managed forests” as well as using fewer raw materials. Other efforts include the use of solar panels at some stores, the non-use of plastic bags in the US, and substituting wood veneer products that are just as attractive and functional as solid wood. IKEA had been using 70 million plastic bags in the US and eliminating the bags cut both waste and emissions.
One area in which IKEA is acting as the leader in sustainability is the company’s efforts to change the lumber industry. IKEA has been buying some of their wood from forests that are certifiable by the independent Forest Stewardship Council. In the future, IKEA wants to use all FSC-certified lumber in its products, but it currently sits at 5% due to pressures to keep costs down by buying from low-cost producers in Russia, eastern Europe and Asia. Acting with the World Wildlife Fund to help owners of timber land in those countries (Russia, China, etc) improve their practices and achieve certification.
One quote that typifies the market today is from Dalhvig, saying he no longer has to persuade them (employees) to work to make the company sustainable, adding “Today, the pressure is from underneath. They want us to do more.” IKEA has been proactive in their sustainability efforts, building up their reputation in the market and building brand loyalty and awareness.