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3 May 2022

Sustainable Forestry: An Investment in the Future


Since 2014 Ingka Group, through its investment arm Ingka Investments, has been buying forestland. Today it owns over a quarter of a million hectares of responsibly managed forests in Europe, the USA, and New Zealand. Andriy Hrytsyuk, the Forestland Portfolio Manager, is responsible for the global strategy of investing in forestry. Here he answers questions and shares his views on why forestry investments create benefits for people, the planet, and the long-term financial resilience of Ingka Group.

Why does Ingka Investments invest in forestland? 

It is our role to help secure Ingka Group’s long-term financial resilience and at the same time have a positive impact on people and planet. Examples include investments in renewable energy, recycling, and biomaterial developments. Forestland is a historically stable, long-term investment, and as a renewable resource that has a positive impact on the planet, forests are a natural choice for investment. Responsible forest management, reforestation, and afforestation all form part of the solution for climate change, and we are committed to enhancing carbon removal through our forests.  

Where does Ingka Investments own forests?

Ingka Group’s current investment is around 255,000 hectares (ha) (618,000 acres) of land where it is managing existing forests and growing new forests: 140,000 ha in the Baltic states; 54,000 ha in the US; 50,000 ha in Romania; and 5,500 ha in New Zealand. That’s the equivalent of 6,000 football fields of responsibly managed forests!

Is the wood from Ingka Group owned forests used for IKEA products?

Our forests are a financial investment that supports our retail business, and the timber we harvest is sold on the open market. Since we do operate in IKEA sourcing areas, a small percentage of timber ends up in the IKEA supply chain. That said, it should be noted that Ingka Investments is part of Ingka Group, the largest retailer of IKEA products. We are not part of the company that designs and manufactures IKEA furniture – Inter IKEA – which is responsible for sourcing raw materials like wood for all IKEA products. Inter IKEA does not own any forests. 

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Andriy Hrytsyuk, Forestland Portfolio Manager for Ingka Investments.

You recently invested in land to grow trees in New Zealand and in the US. Why is Ingka Investments planting trees?  

This is called afforestation. We have been doing this in the Baltics and have now started initiatives in New Zealand and in the US. 

Our forestry investment is guided by the overall IKEA Forest Positive Agenda for 2030 which will ramp up our efforts towards improving forest management and enhancing biodiversity globally. The new agenda will focus on three key areas to protect and support forest resources for generations to come, including making responsible forest management the norm across the world; halting deforestation and reforesting degraded landscapes; and driving innovation to use wood in smarter ways. As part of our long-term commitment to responsible forest management and to reforest degraded landscapes, Ingka Investments has started purchasing currently unforested land and converting it to new forest. 

Are these forestry and afforestation investments linked to the IKEA climate commitments and becoming climate positive by 2030?   

By 2030, we are committed to becoming climate positive* through reducing more greenhouse gas emissions than the IKEA value chain emits, while growing the IKEA business. To reach our goals, investments are needed in material development and innovation, renewable energy generation, recycling infrastructure, better forest management, and more. As a business we also make other investments outside the IKEA value chain and by securing that these are sustainable, we can further contribute to a net-zero society.  

The contribution of these investments does not count towards our commitment to “reduce more greenhouse gas emissions than the IKEA value chain emits” in order to not engage in carbon offsetting but is an important part of how we as a company invest in a responsible way and disclose climate footprint of the investments where possible and suitable. Our forestry investments are part of this and investing in resources is important for the long-term development of Ingka Group and we do believe responsible forest management has a positive contribution to our sustainability and climate goals.  

How much CO2 do your forests absorb? 

Ingka Investments Forestland portfolio is currently part of a Greenhouse Gas Protocol pilot test that will result in a new Land Sector and Removal Guidance. It should be noted that we do not sell the carbon credits and we do not engage in climate offsetting.

How can you be certain that the activities in your forests are sustainable?

We always follow the national regulations and legal requirements wherever Ingka Investments manages forests, including all EU directives. In addition, we go beyond legal obligations, meeting the requirements needed for FSC certification and initiating regular audits by independent authorities.

Our Forest Management Plans and other documents are publicly available, and each year we personally invite more than 1500 national authorities, NGOs, and other stakeholders to comment. We apply responsible and strict management measures that will preserve and even increase the quality of the forest, environment, and biodiversity over time. We want to preserve this equilibrium, as we believe this is the way that leads us to a sustainable use of resources in the long term.

Ingka Investments has been criticised in some countries for harvesting old-growth forest in Romania. How do you respond to those criticisms?

Our main priority as forest owners is to ensure responsible forest management of all our properties to protect the forest, environment, and biodiversity for many generations to come. We do this by taking a long-term approach that respects the law, sets a high standard, and remains transparent. We do not own any old-growth forest on any of our properties and under no circumstances do we allow irresponsible forestry practices.

The criticism and allegations were made by an NGO in Romania, and these were rejected by government authorities for lack of evidence. Nonetheless, because we take all allegations of wrongdoing and the concerns of stakeholders very seriously, we immediately requested an investigation by an independent third party in conjunction with representatives from the NGO. Soil Association Certification Ltd, on behalf of the Forest Stewardship Council, found no evidence of wrongdoing. The area in question, although it doesn’t look like the surrounding forested areas, has been properly managed and is regenerating with oak, as planned from the beginning in our forestry management plan.

Do you plan to make further investments in new countries or in existing countries where you own forests or land for afforestation in Romania/Baltics/US/NZ for example?

We continue to consider and evaluate new forestry investment opportunities. Our commitment to the countries we invest in is for the long term and we put all our efforts into responsible management of the properties. The main reason we invest is to enable Ingka Group’s long-term growth, support its sustainability goals, and to act as a model for the industry. All our forestland investments are long-term commitments.

*IKEA climate positive means to reduce more greenhouse gas (GHG) emissions than the IKEA value chain emits by 2030, while growing the IKEA business. IKEA is committed to the Paris Agreement and to contribute to limiting the global temperature rise to 1.5°C above pre-industrial levels. This includes a commitment to halve the absolute net GHG emissions from the total IKEA value chain by 2030. We will achieve this by drastically reducing GHG emissions through science-based targets and by removing carbon from the atmosphere through natural processes and storing it in land, plants and products through better forest and agriculture management within the IKEA value chain. We will contribute to further greenhouse emission reductions in society by going beyond IKEA, such as enabling customers to generate renewable energy at home.

**The financial year 2021 (referred to as FY21) of the Ingka Group (Ingka Holding B.V. and its controlled entities) refers to the period between 1 September 2020 and 31 August 2021.

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