The Road To IKEA’s Sustainable Mobility With Angela Hultberg

As we continue to delve deeper into the business of sustainability, we wanted to talk about “sustainable mobility” — everything that moves within an organization. This includes last-mile delivery (the movement of goods from a transportation hub to the final delivery destination), workers commuting on a daily basis, customer travel to stores, etc.

One company which has put a major emphasis on sustainable mobility is IKEA, the multinational conglomerate which designs and sells ready-to-assemble furniture, kitchen appliances and home accessories. I recently sat down with Angela Hultberg, Head of Sustainable Mobility at IKEA, to build a profile of the key factors companies would need to consider to approach sustainability from a mobility lens. 

Angela walked us through exactly what this concept means for IKEA, how it operates within the company, and the many ways in which sustainable mobility is implemented around the globe. Her key takeaways follow below.

• What Sustainable Mobility Encompasses: As the Head of Sustainable Mobility, I focus on everything that moves, and my job is to make sure everything that moves, moves in a sustainable way. It encompasses last mile deliveries, getting 170,000 employees to work every day (which comes with some impact of course), and customer travel. That’s actually a huge part of our total emissions — customers traveling to and from Ikea. My job is to ensure all of those emissions go down. (1:02)
• The Impacts Of A Company’s Mobility: Mobility is really a prerequisite for everything we do. Last mile deliveries are a very visible example because we send more and more delivery vehicles into city centers and that comes with impact. Mobility is also super important to our people and culture department because transport is the second biggest cost for most households including our co-workers. A lot of our co-workers are young. They don’t own cars. So how will they even get to Ikea because our workplaces are usually not in the city center. This becomes a problem for us to attract talent. And if we want customers to come to our stores, we need to help them get there in a sustainable, affordable, and convenient way. All companies are in the same situation —  even though these considerations are so frequently overlooked. (2:10)
• The Business Value of Sustainable Mobility: IKEA is a business. If you take last mile deliveries as an example, it is easy to see. When cities start talking about zero emissions zones and ultra-low emissions zones, there are then tolls and extra taxation for combustion engines, and you can start building your business case. If you can’t access the city center, you have a problem. If you can’t get to your customer’s front doors, you don’t have online sales anymore and you go out of business. (3:53)
• The Importance of Employee Mobility: If you are not attractive to talent on the market because it is simply too costly, it takes too long, or it’s too inconvenient to get to work, talent will choose another company. It would not be the most effective way to operate if the commute was the reason you can’t attract talent. (4:34)
• How To Manage Sustainable Mobility Goals: The most important thing is that it is not driven only by sustainability. When issues are driven only by sustainability, it becomes a “nice to have.” Something you do on top of business. At Ikea, we don’t work that way. Sustainability is integrated into business. It is a part of how we make business decisions and how we operate, and that’s the same for mobility. When we talk about last mile deliveries, our milestones and success, and the failures and the learnings we have so far, I am talking about the work all my colleagues and customer fulfillment are doing in all 30 markets. When I talk about co-worker mobility, it refers to who is doing pilots, changing booking systems, etc. It is happening through business and it’s coming both from the global functions down to the markets but in many cases, many cases, it’s coming also from the markets which are saying “Okay, we need to do this. Our customers expect this from us, so we have this great opportunity here, we’re going to go for it.” And then, we can take those examples, and say, if it works for Austria, it might work for Germany. And we try to share knowledge between the markets. (7:25)
• How A Sustainable Initiative Can Take Shape and Grow: When we first started to work with sustainable deliveries, Shanghai was one of our prioritized cities. We had five prioritized cities and we said, “Okay, in these cities we will move even faster. 2025 is 7 years away. We need something faster.” So, we decide to take five major cities and be 100% electric by 2020. Shanghai was one of those cities and they were done in less than a year. We announced it in September 2018 and in January 2019, we were able to say, “Okay, it’s actually done.” They started moving. And now 50% of the deliveries that we do in China are already electric. They found new ways of working, teamed up with an EB sharing platform that was completely new to Ikea retail. So, they’re just moving, and we can’t take so many learnings from what they’re doing and try to copy and paste because the markets are really different. But the learnings coming out of China have been amazing. And some of the markets who were not among the five prioritized cities said, “We can do this too. We want to do it. We’ll beat them, too.” We see great energy coming from other markets where the teams are eager to get going. I think everyone can see the potential and the need of doing it. (9:49)
• Addressing Sustainability Challenges During COVID: When it comes to deliveries, we’re chasing a moving target — especially now with COVID. Our online sales were already growing really fast, and delivery volume also really, really fast. And then during lockdown, we closed 75% of our stores last spring, and online sales exploded. We were scrambling to secure capacity and we also wanted electric capacity. That is quite difficult, because if volume grows 50% year on year, you’re really chasing a moving target. And since we met our share of deliveries, what could have been 20% if everything had stayed the same will now be only 10% because volumes have grown so much. We faced the same challenges as everyone else. We’re not unique here. Its charging infrastructure, the availability of vehicles, the performance of vehicles and the initial investment or cost. Sustainable mobility is an investment, and it will take some money to transform, so that’s obviously one of the barriers.  (11:34)
• What People Don’t Realize About Sustainable Mobility At Ikea: If you don’t live in a place where you’ve seen the Ikea electric trucks, then maybe you are not aware of these efforts. Mobility is a nerdy topic. The people who are in the transport industry are super passionate about it. But I think many people who don’t get kicks from electric vehicles don’t know how much we actually work on this agenda. Most people don’t really know how much Ikea retail really does when it comes to sustainability — as it relates to forestry, carbon, renewable energy, waste management with lowering CO2 emission from food, etc. But that’s probably on us and not on them. We need to talk more about what we do.  (13:14)

Watch the video or read the transcription below.

TRANSCRIPTION

Jennifer: When most people think about sustainability, Ikea is probably the one company or at least the first company that comes into mind for most people. So, I’m excited just to learn more about your role and responsibilities as the mobility side of the business. 

Angela: Yeah, sure.  I mean, I hope you’re right first of all that we do spring to mind. I hope so. In my role as head of sustainable mobility I focus, yeah, its what it sounds like, right? I focus on everything that moves. So, my job is to make sure that everything that moves, moves in a sustainable way. So that’s last mile deliveries, its co-worker, we have 170 thousand co-workers getting to work every day. Maybe not during Covid, but normally. And that comes with some impact of course. And then customer travel. That’s actually a huge part of our total emissions. Our customers traveling to and from Ikea. So, my job is to make sure that all those emissions go down. And then anything sort of that connects to that like building charging infrastructure and things like that. 

Jennifer: That’s great. Why is sustainable mobility so important to companies? I mean, how did this role even come to be at Ikea? 

Angela: Yeah. How could it not be? I think what we sometimes overlooked, and for sure, even at Ikea retail, [2:00] it wasn’t the main focus area until up to a few years back. 

Jennifer: I would think mobility, its one of the first things that I think about, innovation of Ikea. 

Angela: Yeah, of course. You know, right. But mobility is really a prerequisite for everything we do. That’s the thing. Last mile deliveries, of course, that’s a very, you know, visible example where we, you know, we send more and more delivery vehicles into city centers and that comes with impact. Its very visible to customers. But also, you know, the way we move too. So, mobility is super important to our people and culture department because transport is the second biggest cost for most households including, you know, our co-workers. A lot of our co-workers are young. 20% of them are under 25. They don’t own cars. So how will they even get to Ikea? Our workplaces are usually not in the city center. They’re kind of remote. So that becomes a problem for us to attract talent. And of course, if we want customers to come to our stores, we need to help them to get there in a sustainable, affordable, and convenient way. So, it’s really a prerequisite for visitation and sales. It’s a prerequisite for online sales. It’s a prerequisite for even getting the best talent on the market. So, it’s really there as a huge part of the puzzle in everything that we do. And I think all companies are in the same situation. Even though it is so frequently overlooked. 

Jennifer: Yeah. I think you’re right. Every single company could think about sustainable mobility. How does Ikea kind of articulate the business value of focusing on this area so that other businesses can learn how to incorporate this into their business strategy as well? 

Angela: I mean, of course, we’re a business. We’re not an NGO. So, if you take last mile deliveries as an example, [4:00] its kind of easy to see. When you see cities start talking about zero emissions zones, ultra-low emissions zones, there’s, you know, tolls and extra taxation for combustion engines, things like that, then you can also start building your business case. If I can access the city center, then I have a problem. If I can’t get to my customers front doors to deliver goods, I don’t have a service offer anymore and then I don’t have online sales anymore, and then I go out of business. So, there is a huge business risk there and it’s the same for co-worker mobility. If I’m not attractive to talent on the market because it is simply too costly and, you know, it takes too long or its too inconvenient to get to work, then talent will choose someone else. You know, at Ikea, we pride ourselves on having like the best people. We have a great team, and we want to continue with that of course. And it would be so stupid if like the commute was the reason that we can’t attract talent. So, I mean…Yeah, it’s just business. It’s not…nothing else. Its sustainability of course but its really business. If we want to stay in business for another 75 years, we have to figure this out. 

Jennifer: And you’re mentioning so many different areas of mobility. How do you set goals today? What are some of the sustainability goals that you’re focused on right now? 

Angela: First of all, the most important thing is that its not driven only by sustainability. I think one of the issues we have when we work with sustainability is when these topics are driven only by sustainability people if you want to call it that, and it becomes a nice. Something that we do on top of business. At Ikea, we don’t work that way. At Ikea, you know, sustainability is integrated in business. It is a part of how we make business decisions and how we operate. [8:00] And that’s the same for mobility. So, when I talk about last mile deliveries and, you know, our milestones and success, and the failures and the learnings we have so far, I am talking about the work all my colleagues and customer fulfillment are doing. And they’re working super intensely with that. So, we have the global function, very focused on this and then we have 30 markets. And the customer fulfillment team in all 30 markets of course, are working on this. And when I talk about co-worker mobility, I talk about people and culture, right? Its them who is doing pilots, changing booking system, everything like that. And when I talk about customer travel, that’s our market support department. And our customer experience peoples who are, you now, trying to figure out, okay, how can we enable the many people to reach Ikea in a convenient, affordable, and sustainable way. So, it’s happening through business and its coming both, you know, from the global functions down to the markets but in many cases, many cases, its coming also from the markets. And saying, like, “Okay, we need to do this.” Our customers expect this from us, so we have this great opportunity here, we’re going to go for it. And then, you know, we can take those examples, and say, okay, you know, if it works for Austria, it might work for Germany. And then we try to share knowledge between the markets. 

Jennifer: What’s one story about where it has been a market driven sustainability idea that went global across the company? 

Angela: So many. I wouldn’t know where to start. But I think there is so much energy out in the markets and I think, you know, sometimes the markets, you know, they just move. So, if we take China as an example, when we first started to work with sustainable deliveries, Shanghai was one of our prioritized cities. So, we had five prioritized cities and we said, “Okay, in these cities [10:00] we will move even faster. You know, 2025, that’s like 7 years away. We need something way shorter.” So, we say, “We’ll take five major cities and be 100% electric by 2020.” Right? Shanghai was one of those cities and they were done in less than a year. So, we announced it in September 2018 and in January 19, we were able to say, “Okay, its actually done.” And then, you know, they started moving. They aren’t waiting for global to do anything, they just move. And now 50% of the deliveries that we do in China are already electric. They found new ways of working, teamed up with an EB sharing platform that was completely new to Ikea retail. So, they’re just moving, and we can’t take so many learnings from what they’re doing and try to, you know, copy pasting is hard because the markets are really different. But the learnings coming out of China have been amazing. But its also some of the markets who were not among the five prioritized cities saying, you know, “We can do this too. We want to do it. We’ll beat them too.” So, we’re seeing great energy coming from other markets too where the teams are just, they’re eager to get going. I think everyone can see the potential and the need of doing it. So yeah…many examples. 

Jennifer: What’s been the most challenging parts of reaching your sustainability targets this past year? 

Angela: Well, I think for when it comes to deliveries, we’re chasing a moving target. Right? Especially now with Covid. Our online sales were already growing really fast, and delivery volume also really really fast. And then during lockdown, I mean, we closed 75% of our stores last spring. And online sales exploded. [12:00] So not only are we, you know, we’re scrambling to secure capacity and we also want electric capacity. So that’s quite tough because if volume grows 50% year on year, you’re really chasing a moving target. And since we met our share of deliveries, what could have been, you know, 20% if everything had stayed the same will now be only 10% because volumes have grown so much. So that’s a challenge for sure. 

Apart from that, I mean, we face the same challenges as everyone else. I mean, we’re not unique here. Its charging infrastructure, it’s the availability of vehicles, the performance of vehicles and it’s the initial investment or cost. However, you want to phrase it. I think it’s an investment, but it will take some money to transform so that’s obviously one of the barriers. 

Jennifer: What is something that most people purchasing your products wouldn’t know about sustainable mobility at Ikea? 

Angela: Everything, I think. I think if you don’t live in a place where you’ve seen the Ikea electric trucks, then maybe you are not aware of the efforts. Of course, you know, mobility is a bit of a nerdy topic. Let’s be honest. Its transport. I mean, the people who are in the transport industry are super passionate about it. I know I am. But I think the many people maybe are, you know, they don’t get kicks from electric vehicles. Yet at least. So, I think probably what most people don’t know is how much we actually work with this agenda. I think that actually goes across sustainability. I would say that most people don’t really know how much Ikea retail really does [14:00] when it comes to sustainability. When it comes to like forestry, carbon, renewable energy, waste management with a lowering CO2 emission from food. Things like that. So…but that’s probably on us and not on them. We need to maybe talk more about what we do. 

Jennifer: Awesome. Angela, thank you again for joining. 

Angela: Thank you for having me. I really enjoyed it.