© Inter IKEA Systems B. V. 2000

Social and Environmental AffairsThomas Bergmark IKEA Group

© Inter IKEA Systems B. V. 2000

…is to create a better everyday life for the many people

Our Vision….

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• 19,8 billion Euro sales FY 2007

• 118.000 co-workers

• 260 stores in 39 countries

• 1350 Suppliers in 50 countries

• 38 factories in 11 countries

• 42 distribution centres in 16 countries

© Inter IKEA Systems B. V. 2000

“Focus Areas” - also beyond 2009…...

Products & materials Suppliers Energy & Transport Buildings & infrastructure Community involvement Leadership & Competence

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Suppliers

“IKEA shall secure good Social, Working and Environmental conditions at its suppliers, and increase the suppliers’ own capability and motivation to implement and maintain our demands”

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Is it possible to source at competitive prices while living up to its customers demands on taking social and environmental responsibility?

© Inter IKEA Systems B. V. 2000

Top 5 purchase countries

China 22%Poland 16%Italy 8%Sweden 6%Germany 6%

Purchasing

By region

Asia 33%

Europe 64%

North America 3%

Purchasing FY 07

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The IKEA supplier world...

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Differs a lot…...

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IWAY consists of...

• Our Code of Conduct - “IWAY” “The IKEA Way on Purchasing Home Furnishing Products”

• Social-, Working- and Environmental conditions

• IWAY Standard

• IWAY evaluation checklist – 90 criteria’s

• Requirements on all 1350 IKEA Suppliers

• Sub-suppliers to sign and acknowledge the requirements

© Inter IKEA Systems B. V. 2000

IWAY Standard - 17 areas•.General Legal Compliance•.Emissions to air and water, Noise•.Ground Contamination•.Chemicals•.Hazardous and Non-Hazardous Waste•.Fire Safety •.Worker Safety•.Provided Housing Facilities•.Wages, benefits and Working Hours•.Child Labour•.Forced & Bonded Labour•.Discrimination•.Freedom of Association•.Harassment and Abuse / Disciplinary Practises• Continuous Improvements•.Routines for procurement of wood, bamboo and rattan• Fulfilment of IKEA and legal forestry demands

© Inter IKEA Systems B. V. 2000

Trading Service Offices• 100 IKEA auditors performing IWAY audits

• developing suppliers

• ..

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Internal & External Verification audits

1. Trading Service Offices2. Compliance team 3. PWC, KPMG and ITS

• All suppliers are covered• Selected Sub-suppliers as well

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Sub Suppliers

• Unannounced child labour audits in India and Pakistan by 3rd party• “High risk” strategy

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IWAY fulfillment rates 2007

Average IWAY fulfilment

50%

60%

70%

80%

90%

100%

March2004

March2005

March2006

Dec2006

May2007

Sept

Europe

Asia

Americas

Total

© Inter IKEA Systems B. V. 2000

Social & Environmental Report F.Y.2006 on www.IKEA-group.IKEA.com

Social & Environmental

Responsibility

Report 2006

© Inter IKEA Systems B. V. 2000

Conclusions• Our Vision is the foundation• S&E Strategy with suppliers in focus• Clear requirements in our CoC• Auditing of suppliers and sub-suppliers• We put a lot of IKEA resources on this• No quick fix! Also dilemmas!

© Inter IKEA Systems B. V. 2000

WE CAN MAKE A DIFFERENCE!!- by doing business in a responsible way….

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