IKEA Australia shows sustainability drives profit, not costs
- Impact X
- 24 hours ago
- 3 min read

The traditional view of sustainability as a cost centre is rapidly becoming obsolete, with environmental initiatives increasingly driving profitability and competitive advantage.
Ricardo Pereira, Chief Financial Officer at IKEA Australia, delivered perhaps the most compelling evidence for this shift while speaking at the IX Summit Sydney 2025, revealing how the Swedish furniture giant has fundamentally restructured its performance metrics to treat sustainability as an equal pillar alongside financial returns.
Performance Beyond Profit
"What we call the value creation goals, which means my performance as a CFO and the performance of this country in the IKEA world is not just measured based on sales and on profitability, but just one out of four big pillars we have in our goals," Pereira explained.
The company's approach incorporates four equally weighted metrics: financial performance, environmental impact, social responsibility, and product innovation. This holistic measurement framework has enabled IKEA to demonstrate that sustainability initiatives can drive business growth, with the company achieving a 30% emissions reduction while growing revenue by 20% since 2016.
Practical Transformation
Pereira outlined concrete strategies that have delivered measurable results. The company has invested heavily in renewable energy infrastructure, installing solar panels across all owned facilities and distribution centres, while transitioning heating and cooling systems to renewable sources. Energy efficiency improvements have reduced consumption per square metre by 16%.
Perhaps most remarkably, IKEA Australia has transformed its delivery network from 5% zero-emission vehicles in 2022 to 65% by January 2025, with projections of reaching 90% by year-end. This achievement required significant infrastructure investment, with the company spending over $4.5 million on charging infrastructure for service providers.
"If there is not infrastructure available, then how can we secure that from an organisation that enables this opportunity and the possibility to do zero emission deliveries?" Pereira explained, highlighting the proactive approach required to overcome systemic barriers.
Long-term Perspective
The company's private ownership structure enables a longer-term strategic horizon that prioritises sustainability investments over short-term returns. "We have the advantage at IKEA that we are a private company, that we are not in the stock market. We are not guided by short-term profit or short-term results," Pereira noted.
This perspective drives investment decisions focused on future viability rather than quarterly results. " Our goal is how can I secure that this brand will be here 80 years from now? It will only happen if we take care of the planet and we believe again, like I said before, we believe the customers are more and more looking into the brands that care about it."
Strategic Implications
IKEA's experience demonstrates that sustainability transformation requires both cultural change and systematic investment. The company's ability to decouple growth from emissions while maintaining profitability provides a template for other large-scale operations facing similar challenges.
For Australian businesses, particularly those in retail and logistics, IKEA's infrastructure investments in renewable energy and electric vehicle charging represent a pathway to achieving significant emissions reductions without sacrificing growth objectives.
The company's focus on incremental progress rather than perfection offers practical guidance for organisations beginning their sustainability journey.
" Let's not focus about what we cannot do. Let's all focus about what we can do. And if we can do 90%, if everyone does the 90%, then I think we have come very, very far."
As regulatory pressure intensifies and consumer expectations evolve, IKEA Australia's integration of sustainability metrics into core performance indicators suggests that businesses treating environmental responsibility as optional may find themselves increasingly disadvantaged in the marketplace.