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Better company

High standards of governance

Our governance is designed to ensure that Ingka Group remains a well-managed, successful, purpose-led company, and that we deliver on our strategic ambitions and goals.  

Our approach

Ingka Group operates three businesses; IKEA Retail which is our core business, Ingka Centres and Ingka Investments. Ingka Holding BV is the parent company of Ingka Group.  

Read more about how we are organised and the members of our Supervisory Board, Management Board and Group Management.   

As a purpose-led business, we have integrated sustainability into our governance structures. We have also made it a priority to achieve gender balance in our boards and committees.

Kid playing with toys

Progress and challenges in FY21

We made progress in FY21, improving gender balance in many of our boards and committees.  

We also strengthened our sustainability governance, with our Chief Sustainability Officer now a member of our Group Management.

Picture woman

Sustainability governance

The Ingka Group People and Planet Positive Strategy sets out the sustainability direction for our three businesses: IKEA Retail, Ingka Centres and Ingka Investments. 

As a purpose-led business, we have fully integrated sustainability into our governance to ensure we implement our policies and achieve our targets.

Our approach

Our sustainability strategy is formally decided by the Management Board, considering advice from the Supervisory Board, who have a broad range of competencies including ESG.  

The Sustainability Committee of the Management Board, chaired by the CFO and Deputy CEO of Ingka Group, defines and follows up on the overarching priorities, principles and frameworks for sustainability within Ingka Group. The committee meets twice a year and follows up on sustainability performance, including climate-related issues, in every meeting. 

Our Chief Sustainability Officer (CSO), Karen Pflug, is a member of our Group Management to further strengthen our focus on sustainability as a key topic for the Group. She manages the group sustainability function with responsibility for the execution of our People and Planet Positive Strategy across Ingka Group. The CSO organises and is the deputy chairperson of the Sustainability Committee, supported by the Sustainability Management Team. 

The sustainability management team includes managers from the Group Sustainability, Group Communications and Finance functions, along with the Sustainability Managers of IKEA Retail and Ingka Centres.

Human holds land in hands

The management team is responsible for the development of sustainability policy, strategy and governance, and oversees our sustainability performance, communications and innovation programmes. Managers from the Procurement and Business Risk & Compliance functions attend relevant meetings. 

We have integrated climate-related matters into our governance. Read more about our approach to climate change governance in our Task Force on Climate-Related Financial Disclosures section.

Management at Country level

Our Country Retail Managers are also the Chief Sustainability Officer for their country. This is designed to help embed sustainability into our core business at Ingka Group, and broaden ownership of our People & Planet Positive strategy. Country CSOs are accountable for delivering our goals at the country level, and sustainability is integrated into their development programme and performance review process. They are supported by Sustainability Managers in each country. 

Collaborating with Inter IKEA

Ingka Group participates in the IKEA Strategic Sustainability Council. This is an Inter IKEA Group governance body that focuses on the IKEA Brand’s role in society, the IKEA People and Planet Positive Strategy and ambitions across the franchise system. The group also oversees compliance with requirements for sustainability goals through IWAY. Ingka Group collaborates with Inter IKEA Group on topics in the IKEA People and Planet Positive Strategy that require a value chain approach to improve our impact, such as inspiring customers on healthy and sustainable living and the IKEA climate positive commitment. 

Bumble bi and flowers

Our policies, rules and standpoints

Our Ingka Policies and Rules help us to steer our business as a purpose led company. They reflect our values and ethical standpoints, enabling us to remain a trusted brand and to act in the best interests of our business, co-workers, people and planet. Our policies make it clear to co-workers what we stand for and are designed to be easy to apply in their everyday work.  We reviewed and updated all our key policies during FY21 to make sure they fully reflect our values, standpoints and strategic ambitions. The revised policies are being launched to all co-workers and supported by internal communication activities, including a series of short films featuring interviews with our senior leaders to help engage our co-workers and bring our stand points to life.  

IKEA co-worker wrighting on paper

Value creation goals

To support our performance culture and to help steer our business towards our vision of a better everyday life for the many people, we are developing new goals for each Ingka business and unit, and for Ingka Group as a whole. These ‘value creation’ goals help us measure performance both financially and in terms of how we add value to co-workers, customers, society and the planet. They are intended to help us assess whether we are succeeding as a purpose-led business. You can read some of these goals in the performance tables throughout this website.

couple walking in IKEA store

Risk management

At Ingka Group, we strive to achieve healthy growth and an even better customer experience. This requires conscious risk-taking, which is about striking the right balance between being entrepreneurial and avoiding risk when it could have a negative impact on people, planet or the brand. This balance requires a high level of understanding of how to manage risks, a clear overview of the risks we face and clarity on the potential impact those risks could have.  

We strive to focus on the highest risks first and design effective solutions to mitigate them. We believe that integrating and applying risk and compliance within the ways of working enables us to secure a responsible, risk-aware organisation, which results in better performance. This empowers co-workers and the business to grasp the many opportunities and to take responsible risks every day, while safeguarding and strengthening customer relationships, co-workers, assets, the IKEA Brand and the company as a whole.  

Risks are present in all our business activities and include those relating to strategic goals, business performance, compliance with internal requirements and external laws and regulations, as well as risks critical to sustainability priorities. The quality and safety of our products and ensuring a safe and secure customer experience for physical and digital interactions, is always a top priority. A holistic and enterprise-wide approach is applied to manage risk and ensure compliance, based on our new framework. The aim of the approach is to successfully meet objectives with fewer unexpected surprises, empower risk-informed decision-making and enable stronger company resilience.  

Sustainability risks

We have robust processes for identifying, managing and mitigating non-financial risks to our business.

Our approach

Social, environmental and ethical risks are integrated into the Ingka Group Risk Management Framework. Risks are identified, assessed and managed across the business, and relevant functions are responsible for monitoring progress and putting mitigation plans in place. We assess risks on an ongoing basis, and also conduct an annual strategic sustainability risk review, led by the Sustainability Management Team.  

Risk assessment process 

Strategic sustainability risks are assessed using internal data and third-party reports from organisations such as the World Economic Forum and the World Resources Institute. Risks are assessed from a quantitative financial impact and qualitative impact perspective under five different areas:  Brand & reputation; Financial; Legal & Regulatory; Operations; Health & Safety. The impacts are assessed based on five level scale from insignificant to critical.  

Risks are also assessed based on their likelihood to materialise. The likelihood is assessed on a five level scale from unlikely to materialise to almost certain to materialise (the highest likelihood). The impact and likelihood together determine the overall risk level; which in turn determines how swiftly a risk response plan must be developed where Ingka has five possible response options; accept, transfer, mitigate, avoid and explore. 

Our risk assessment process includes pre-defined risks from the Ingka risk universe that is used as a basis for the assessments.  Based on the input received from all the different parts of the business and countries, the consolidated score of some of the sustainability risks have been rated as having a potentially high impact and requiring a coordinated approach to respond effectively. This includes risks related to climate change. 

two people sitting with laptops

Bottom-up risk process

Our risk process includes a bottom-up approach for each Ingka Group country to identify and report local sustainability risks. Sustainability Managers in each country, supported by Business Risk & Compliance Managers and other relevant co-workers, identify and record risks. The bottom-up approach improves our understanding of sustainability risks in each country and whether there are any emerging risks that could affect our strategic sustainability goals.  

Risk reporting

Strategic sustainability risks are reported to the Sustainability Committee and in consolidated form to the Risk and Compliance Committee. A risk owner is assigned from the relevant business area who is accountable for managing climate-related risks. Strategic sustainability risks from various group functions are reviewed and consolidated in the Ingka Group Risk Register annually, to reflect the latest assessment. 

Managing climate-related risks

Climate-related risks are integrated into the Ingka Group risk management framework and are assessed in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). In FY21, we initiated an updated TCFD assessment in order to include more of our material climate-related risks and net-zero transition opportunities.

trees on a field

Key sustainability risks in FY21

The key sustainability risks identified in FY21 include: climate change disrupting our supply chain and business operations and impacting co-workers and customers; and social and environmental risks in our supply chain. 

Reporting non-financial information

We disclose our approach to managing non-financial risks in line with the EU Non-Financial Reporting Directive requirements. More information is found throughout this website, including in the following sections:  

Environmental risks – see climate positive by 2030 and becoming circular

Social and employee risks – see our co-worker, respecting human rights and iway page. 

Human rights and children’s rights risks – see respecting human rights page, iway page, neighbourhoods page, diversity page. 

Anti-corruption, anti-bribery and business ethics risks – see business ethics and ABAC pages, iway, living our values.

Stakeholder engagement

Our key stakeholders include our co-workers, customers, and people in communities where we operate. We partner and engage with NGOs, academics, opinion leaders, decision-makers, and peers, who all challenge us to be our best. 

Together, we sought to respond to acute social and planetary challenges during the global public health crisis. We joined our peers and civil society partners to call for gender-equal, equitable, and green recovery measures. 

We’re a member of the UN Global Compact, we work with the World Economic Forum, the B Team, Organisation for Economic Co-operation and Development (OECD), The Conference Board, and we’re a member of the World Business Council for Sustainable Development (WBCSD). 

Identifying our material issues

Our approach to sustainability is informed by our own research, in-depth knowledge of our customers and consultation with our key stakeholders. We also conduct formal materiality assessments to help us identify the issues of most importance to the business, to our stakeholders and the planet.  

What did we do in FY21?

We undertook a materiality assessment update in FY21, conducted by an external consultant.   

To ensure that we address the right issues in our materiality assessment, we started off with a research phase covering: a benchmark analysis, internal and stakeholder interviews, comparison with frameworks such as the UN Sustainable Development Goals, and other research. The research findings were discussed at a series of internal workshops to identify a long list of issues, which were reduced to a shortlist and categorised into 14 high level topics, based on the research and workshop findings. The 14 topics were grouped according to the three challenges addressed in the IKEA People & Planet Positive strategy: Climate change, Inequality and Unsustainable consumption.  

As in our previous assessment, we used a ‘double materiality’ approach which considers both the impacts of sustainability issues on our business (outside-in) and the impacts of our business on people and the planet (inside-out).  

For the outside-in perspective, a wide group of internal stakeholders from IKEA Retail, Ingka Centres and Ingka Investments participated in a series of workshops. They were asked to assess the shortlisted topics according to their impact on our business. 

co-worker wrighting

For the inside-out perspective, we reached out to our network of stakeholders and invited a set of “critical friends” to rank the shortlisted topics and give their view on where they see that Ingka Group has, and can have, the greatest impact. 

The findings show that both internal and external stakeholders rank global emissions, consumption and materials use and circularity highly. The shortlist also included more topics related to inequality than our previous assessment, reflecting the growing focus on these topics in wider society over the past few years. 

The materiality assessment focused on topics that are within the operational control of Ingka Group, and did not consider the impact of the full IKEA upstream supply chain. This means that issues like deforestation, biodiversity and water use did not score as highly in the assessment.  

The materiality assessment confirmed that we are addressing our most material issues through  our strategies and plans. It also showed that there are high expectations – both internally and externally – for Ingka Group to use its size and reach to drive positive change in the areas where we have most influence. 

Read more about our movements here