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IKEA - Transform into Circular Business for Sustainable Future

Businesses have historically centered themselves on producing high-quality goods and maximizing profits. While this is not inherently wrong, they have the potential to adjust their focus to reflect the growing awareness of the importance of fostering a sustainable world. One of the ways the private sector can pull its weight in this regard is through "circular business.”


For a long time, the corporate world has been extracting materials from the earth, transforming them into products with typically short lifespans, and then disposed of those goods by sending them to landfills. Circular economy practices are born to let businesses break out of this model and change how they operate to become more sustainable. In the circular model, profit maximization is not the primary objective; instead, it focuses on restructuring the operations from the bottom up to reduce resource extraction and consumption. IKEA, a global home furnishings brand, is an example of a company that aspires to become a circular business and climate positive by 2030.


IKEA is conscious of the growing awareness of circular behaviors among consumers and the difficulty in maintaining them. With that, the company developed its four strategic goals to establish itself as a more appealing brand for modern clients. Firstly, IKEA established the circular product principle, ensuring that its products are designed to be reused, refurbished, and eventually recycled to reach their full circularity potential. Next, IKEA seeks to prioritize using recyclable or renewable materials, as materials are the most significant contributor to its carbon footprint. As a result, the furniture giant reduces the use of resources and uses alternatives such as recycled polyols, which prevent three million mattresses a year from being incinerated. Besides, IKEA continues to conduct tests on its circular service to ensure the most convenient experience for its clients. Currently, the firm encourages customers to pass on the brand's products by establishing second-hand markets, extending its products' longevity. Lastly, the company collaborates with others and leads by example; it works with suppliers, business partners, non-governmental organizations, and other stakeholders to accelerate the transformation. The furniture retailer is now working with nearly 2,100 suppliers to reduce the environmental impact of its supply chain.

Transforming into a circular business is a huge process. From the case study, the transition impacts every aspect of a business’s operations, from sourcing energy and materials to creating products and services. However, the model helps ensure the world will move toward sustainable growth over time, for we can drive the optimization of the resources and reduce the world’s consumption. In order to help the environment promptly, businesses must consider adopting the circular model; this will also help them attract customers whose consumption behaviors are more environmentally conscious than ever.

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