How does IKEA Australia approach sustainability?
Almost 1% of all commercially harvested wood goes into IKEA products. But it’s trying to change this with an impressive 2020 goal of 100% renewable energy, producing as much as it consumes in operations, and that its wood, paper and cardboard will be sourced 100% sustainably.
Leading the its Australian stores into the future is Dr Kate Ringvall, IKEA Australia’s Country Manager Sustainability, who has had an esteemed environmental career for more than 20 years, including at Local and Federal Government levels.
“Having come from outside of IKEA, I've had a really good insight into what makes us different,” says Dr Ringvall, who relocated from Perth to Sydney in February for the role. “And the key is that sustainability has been at the very kernel and DNA of IKEA since its inception.”
Ingvar Kamprad founded IKEA in 1943 at the age of just 17, with the premise you could do more with less. Now, it serves 915mn customers every day globally, and Dr Ringvall says Democratic Design is part of the core design principle that runs through everything.
“It's about creating products with sustainability at the heart,” she explains. “The five key principles of IKEA’s Democratic Design are form, function, quality, low price – or cost consciousness – and sustainability. Nothing gets produced unless it meets the rigorous criteria that sits within that.”
As well as having key considerations for how and where products are made, and by whom, IKEA also considers what will happen to products at the end of their life, and now recycles all mattresses via social enterprise Soft Landing, which provides jobs and traineeships to help people out of poverty and into lasting employment.
“We’re moving to do the same with sofas and other furniture,” adds Dr Ringvall. “We're in the 21st century and our research shows that people want to live more sustainable lives, but they're unsure how to.
“We can help them to do the small things or swaps, like LEDs, water efficient taps and other sustainable products. It's really simple stuff and doesn't have to be expensive.”
She says one of her goals is to talk about sustainability within IKEA more, adding: “The challenge is ensuring we're using less resources, and reusing as much as we can making products that are not hurting the earth.
“The future means we have to start thinking about circularity. It’s a continual challenge for all companies, but particularly for us, because that's one of things we feel is very important.
“Yes, it might be a low price, but it's not low price without compromise – it's low price without costing the Earth, literally.”
Globally, IKEA has invested $2.25bn in renewable energy since 2009 and has committed to investing another $900mn. It also owns and operates 327 offsite wind turbines, and has installed 700,000 solar panels on IKEA buildings.
The store now only sells LED lights, and the renewable SOARE range of place mats, made from water hyacinths in Vietnam and Southeast Asia, are a huge hit. As is Kungsbacka, the new range of kitchen doors and drawer fronts which launched in February, made from recycled PET plastic bottles and reclaimed industrial wood.
“It’s really pushing the boundaries of what sustainable products look like,” Dr Ringvall adds. “It's a funky kitchen front that looks amazing and is made of recycled wood and PET.”
IKEA is also phasing out EPS – oil-based expanded polystyrene – which used to be found in flat packs, and replacing it with fibre-based, fully-recyclable materials.
Another major change is becoming multichannel – being able to order online – and to that end, the furniture behemoth has forged partnerships with Airtasker and GoGet cars. It’s also establishing pick up points and, to date, has 18, mainly in regional centres.
“If you're in far North Queensland, you can order your kitchen online and it will be delivered to your pick-up point in your town,” she adds. “Every store has GoGet cars available, and they’re discounted if you're an IKEA family member.
“Essentially, you can just book a car, go and pick up your stuff, take it home. Then come back, swap your car and that's it. We're connecting with whole other community groups, so our reach is far-expanding. We've opened up how we meet the customer – that's where the future is.”
Urbanisation is another key issue, both here and worldwide. Australia’s population is set to grow from 24mn to 70mn over the next hundred years, and when IKEA Australia shared its glimpse of tomorrow at Sydney’s Millers Point in August, unveiling a co-living community complete with a shared dining space, people were blown away.
The brainchild of IKEA’s innovative future-living lab, Space10, in Copenhagen, Denmark, it also boasted a fully functional Growroom – an open-source urban farm pavilion showing how cities can feed themselves through shared food-producing architecture.
“Space10 is taking some of those concepts and doing lateral thinking about what can be done in smaller spaces,” explains Dr Ringvall. “We recognise we need to live differently and adapt to an urbanised future, and what that might look like.”
The plans for the Growroom, which are available for free, have already been downloaded 20,000 times, and received significant interest from local government, which is desperately investigating affordable, sustainable housing in some of Australia’s largest – and massively overpriced – cities.
“Having worked in local government, where the old saying is ‘the rubber hits the road’, I can vouch for that,” she says. “It absolutely does. We’re going to have less space and Local Government recognises that, and also the fact that so many people are isolated, or lonely – and connection is what they're seeking.
“And it's not just individuals – it's families, couples, multi-family units, school communities and community groups. The Growroom is a connector as well, meaning people can share resources in a way that's really connecting them, and also back to nature.
Tying in to this tangent is Food is Precious, one of the major current global IKEA initiatives aiming to cut food waste, certainly in food preparations, by 50% by the end of 2020.
“It's becoming more of a focus, because of the amount of food that's wasted could, literally, feed the world,” she adds. “We absolutely need to be doing things differently. We have to be innovative and think totally differently to what we have in the past, so we can use less resources, but meet the needs of the people that we want to connect with.”
Dr Ringvall says IKEA “talks the talk and walks the walk”, revealing she finds it inspiring and heartening that the big multinational has held on to some of the quintessential Swedish cultural values.
“Togetherness, working together and caring for each other,” she adds. “Those are really important values that are getting lost. But IKEA employs through its values. It’s a company that immediately saw the level of experience and education that I have, and valued it.
“It’s very empowering and they’re constantly saying, ‘What else would you like to do?’ I've yet to hear someone say, ‘We can't do that’.”
C-suite spotight: Melanie Perkins, CEO, Canva
Who is Melanie Perkins?
She’s the co-founder and CEO of Australian unicorn online design platform Canva, who ultimately became one of tech’s youngest female CEOs, at just 30, and recently became a billionaire aged 35, making her one of Australia’s richest and youngest.
Why is she in the spotlight right now?
Because less than a year after securing a US$6bn valuation during the pandemic, which provided a big boost to business, Canva has recently more than doubled its valuation, securing a $15bn valuation, which makes Perkins a billionaire, according to Forbes. The valuation comes in the wake of a new funding round in the first week of April 2021 led by T. Rowe Price and Dragoneer and raising $71m. At the same time, Canva announced its business has passed $500m in annualised revenue, up 130% from the year before.
What is Canva and why is it so successful?
Launched in 2013 by co-founders Melanie Perkins (CEO), Cliff Obrecht (COO) and Cameron Adams (Chief Product Officer), Sydney-headquartered Canva is a free-to-use online graphic design product that allows users to create everything from social media graphics to presentations and other visual content, as well as offering paid subscriptions like Canva Pro and Canva for Enterprise, with 3 million of its now 55 million users taking paid subscriptions.
Accruing 750,000 users in its first year, following a number of rounds of investment including from Mary Meeker’s Bond Capital in 2019 and this month’s massive funding round, Canva now boasts 55 million users across 190 countries, with offices in Sydney, Beijing, Manila, and most recently Austin, Texas, and is valued at $3.2 billion.
And while the company was originally most popular with SMEs, helping them draft and design print and digital assets, it’s since grown to become a real-time collaboration suite that’s being used by big firms including McKinsey, Salesforce and American Airlines. In fact, Canva claims that 85% of Fortune 500 companies use the platform’s services. They continue to add new features and during the pandemic, added presenter video recording tools.
How did Perkins get there?
The idea of Canva came to Perkins when she was at the university of Perth, where to earn money on the side she taught students design programmes. Many of her students found platforms like Adobe complicated and frustrating, and the ideas came to her to simplify and democratise design, to make it more approachable and accessible, more collaborative, and ultimately to empower all in design. So, she and university peer Cliff Obrecht, who became Canva co-founder and Perkins’ husband, created an online school yearbook design business, Fusion Yearbooks, to test it out. Operating from her mum’s living room, the yearbook design business was a massive success, expanding to New Zealand and France, and remains the largest yearbook publisher in Australia.
However, Perkins did not give up on her dream to create a one-stop-shop design site and at one point spent three months living with her brother in San Francisco where she pitched to more than 100 venture capitalists, all of whom rejected Canva. It was following a chance encounter at a conference in Perth with Silicon Valley venture capitalist Bill Tai, Perkins was winning over major investors including Hollywood celebrities Woody Harrelson and Owen Wilson and building out Canva’s design platform with a fast-growing team of tech engineers and a high-profile tech advisor, Lars Rasmussen who co-founded Google Maps.
It was in 2012 when things really kicked off however when Perkins and Obrecht found a tech co-founder in Cameron Adams. The same year, they closed their first funding round, which was oversubscribed and raised $1.5m, with Canva going live in 2013. In 2019, an $85m funding round led by Silicon Valley investor Mary Meeker’s Bond Capital gave the company a valuation of $3.2bn, before the most recent funding around in April 2021 leading to a valuation of $15bn.
In her own words…
"I think it's pretty important to know that every single person is going through their own trials and tribulations. Knowing that it's tricky for everyone, that any adventure will be filled with rejections and littered with obstacles – somehow makes the adventure a little less lonely. And it's most important for people who feel like they are on the outside to know this."