Making Sustainability Affordable for All: IKEA Creates a Demand for Better Cotton, Lasting Change

Stockholm and New York, 15 March 2013 - The IKEA Group of Sweden has announced its commitment to the Business Call to Action (BCtA) and reinforced its goal to use only cotton produced entirely in line with the Better Cotton Initiative (BCI) in all IKEA products by end of 2015.

As part of this effort, the leading home furnishing retailer also plans to grow worldwide demand for sustainable cotton at affordable prices. The BCtA is a global initiative that aims to support private sector efforts to fight poverty through its core business, supported by several international organizations and hosted by the UN Development Programme (UNDP).

IKEA's goal is to ensure that consumers do not have to pay a premium for cotton products that are more sustainably farmed than conventional cotton using less water and fewer chemicals and pesticides. Forecasts suggest cotton production costs will increase as conventional cotton farming becomes more water and chemical intensive. IKEA believes it is possible to produce cotton at a lower cost and through practices which not only improve incomes for farmers but also have a lower impact on the environment.

Cotton is the second most important raw material for the company after wood, making it a clear strategic priority. In 2012, IKEA used 160,000 tonnes of cotton in its products with the majority coming from India and Pakistan, where its work related to the BCtA commitments are focused.

Sigrid Kaag, UN Assistant Secretary-General, Assistant UNDP Administrator, and Director of UNDP's Bureau for External Relations and Advocacy, also welcomed IKEA's commitment. Through its development expertise and convening power, UNDP can leverage private sector investments and operations in developing countries. The Business Call to Action (BCtA), housed at UNDP, can challenge and support corporations such as IKEA in new markets by contributing to more inclusive business models with a positive impact on people living in in poverty, she said.

IKEA's commitment began in 2005 as part of its overall environmental efforts and as a founding member of the BCI. BCI works with a diverse range of stakeholders to promote measurable and continuing improvements for the environment, farming communities, and the economies of cotton-producing areas. Such efforts often reduce input costs and generally increase farmer incomes by transforming the way in which cotton is farmed. By encouraging more sustainable cotton farming methods and the uptake of Better Cotton on the global market, IKEA contributes to securing a more stable, affordable supply of cotton.

IKEA is providing technical assistance and training to thousands of farmers in Pakistan to help them to produce and sell Better Cotton. Currently, 34 percent (51,000 tonnes) of all cotton used in IKEA products is produced in line with BCI standards. In 2012, the annual world production of sustainable cotton was only 250,000 tonnes, which IKEA seeks to increase through its holistic approach to assisting farmers, including those outside of IKEA's value chain.

We are pleased to contribute our knowledge and experience on working with cotton to the innovative BCtA and play our small part in progressing towards the Millennium Development Goals. By making sustainability affordable for everyone, we hope we can lead to the transformational change of markets and commodities, such as cotton, Steve Howard, Chief Sustainability Officer, IKEA Group, said.

Today, 34 percent of our cotton is produced in a more sustainable way and by the end of 2015 this will apply to all of the cotton in IKEA products. It not only benefits cotton farmers but importantly, customers do not need to pay a premium price for products made in a way that is better for both people and the environment, Howard said.

Charlotte Petri Gornitzka, Director-General of the Swedish International Development Cooperation Agency (Sida), added: It is very welcome that more Swedish companies are joining this initiative. Inclusive business models are good for business as well as for people living in poverty. The mutual benefits are at the core of this programme and show the importance of better harnessing the great potential of the private sector in poverty reduction efforts.

For more information:

IKEA: Please forward media inquiries regarding IKEA Group to ikea.pr@ikea.com or to the press office, Tel: +46 70 993 63 76

BCtA/UNDP: Suba Sivakumaran, Subathirai.Sivakumaran@undp.org, Tel: +1 212 906 5820

Sida: Anette Widholm Bolme, Anette.Widholm.Bolme@sida.se, Tel: +46 8 698 54 40

About IKEA:

IKEA offers well-designed and functional home furnishings at affordable prices. Founded in Sweden in 1943, the IKEA Group today has 298 stores in 26 countries and 139,000 co-workers committed to our vision to create a better everyday life for the many people. Care for people and the environment is integrated in every step of the business. IKEA continuously supports initiatives that benefit causes such as children or the environment. For more information, please visit www.IKEA.com.

@ikealiving on Twitter

About the Business Call to Action (BCtA):

Business Call to Action is a global initiative that challenges companies to develop inclusive business models that offer the potential for development impact along with commercial success. The initiative is the result of a partnership between the Australian Department of Foreign Affairs and Trade, the Dutch Ministry of Foreign Affairs, the Swedish International Development Cooperation Agency, UK Department for International Development, US Agency for International Development, United Nations Development Programme, the United Nations Global Compact, and the Clinton Global Initiative to meet the anti-poverty Millennium Development Goals by 2015. Companies report on progress toward commitments on an annual basis. To learn more, please visit www.businesscalltoaction.org or join the conversation on Twitter at @BCtAInitiative.

@BCtAInitiative on Twitter

About the Swedish International Development Cooperation Agency (Sida):

Swedish International Development Cooperation Agency is a government agency working on behalf of the Swedish parliament and government, with the mission of reducing poverty in the world. Through its own work and in cooperation with others, Sida contributes to implementing Sweden's Policy for Global Development (PGU). Sida implements the Swedish development policy aimed at enabling poor people to improve their lives. Sida engages in enhanced development cooperation with 33 countries in Africa, Asia, Europe, and Latin America. For more information, please visit http://www.sida.se.

@Sida on Twitter