A Short Report on IKEA B.V
Written By: Syed Rehan Rizvi
February 16, 2010
IKEA’s Social and Environmental Initiatives
IKEA is one of the largest European home furnishing retailers established in 1943. It has more than 300 stores in 37 countries with a business turnover of approx. 22,7 billion Euros in 2009 and an approximate direct workforce of 127,800 employees all over the world. IKEA’s retail concept is based on selling well designed products at low prices so that maximum people can afford them and live a better life.
IKEA’s Corporate Social and Environmental Initiatives
Globalization has changed the world business environment. The cost competition forces many manufacturing industries to move their industrial units from developed to developing or under-developed countries because of cheap labour, poor implementation and weak monitoring by the governments on the labour and environmental legislations in those countries. However, the responsible organizations with good business ethics soon realize the fact that low cost does not mean getting products produced through unethical and illegal employment practices along with environmental degradation in these countries.
IKEA’s commitment to the social responsibility and global environmental issues took a major turn in their corporate set-up with the establishment of social and environmental initiatives in 1998. This lead to the development of a comprehensive standard for achieving its environmental and social initiatives called IKEA’s Way of Purchasing Products, Materials and Services - “IWAY Standard”.
IWAY requirements were communicated to all suppliers and sub-suppliers of IKEA worldwide mainly in developing countries engaged in the production with a strong emphasis on the enforcement of these guidelines. By 2004, IKEA had reduced significant number (almost less than half) of its suppliers and sub-suppliers worldwide in order to have a strategic partnership on these initiatives with only those suppliers who showed commitment and practical implementation of the major requirements of IWAY standard.
Beside this, IKEA jointly started global efforts in developing various social responsibility programs in collaboration with organizations including UNICEF, WWF, and other reputable NGOs. As a step further, IKEA contributed millions of US Dollars to the cause of saving and improving the lives of impoverished children and other charitable initiatives for their families. Additional social initiatives programs include support in the education and health sector for the under-privileged children of developing countries and major relief efforts in natural disasters in these countries.
The IKEA Way on Purchasing Products, Materials and Services (IWAY) is the IKEA’s Code of Conduct for suppliers. The standard developed as a ‘living document’ is revised and improved with passage of time and the existing standard is the 4th version that is issued in June 2008.
IWAY which recognizes Fundamental Principles of Human Rights is based on the eight core conventions defined in the Fundamental Principles of Rights at Work, ILO declaration June 1998, the Rio Declaration on Sustainable Development 1992, The UN Johannesburg Summit on Sustainable Development and the Ten Principles of the UN Global Compact 2000.
IWAY Standard is divided in 14 Main Clauses/ Requirements which all suppliers has to implement in their facilities engaged in the production or services for IKEA products and they are as follow:
1. Start-up Requirements, IWAY Musts
2. General Conditions
3. Environment – Air, Noise, Water and Ground
5. Hazardous and Non-Hazardous Waste
6. Fire Prevention
7. Worker Health & Safety
8. Housing Facilities
9. Wages, Benefits and Working Hours
10. Child Labour
11. Forced & Bonded Labour
13. Freedom of Association
14. Harassment, Abuse and...