IKEA’s Parent Ingka to Invest €1 Billion in Recycling-Focused Companies to Boost Circular Economy

Ingka Investments, the investment arm of Ingka Group, the largest retailer behind IKEA, representing 90% of IKEA’s global sales, has announced an ambitious €1 billion investment plan to accelerate the growth of recycling infrastructure. This major initiative is part of Ingka Group’s ongoing commitment to driving the transition towards a circular economy, which seeks to minimize waste and make the most of available resources.

In today’s global economy, natural resource consumption exceeds the planet's ability to regenerate by a staggering 75%. Simultaneously, less than 20% of waste is recycled. To address this imbalance, Ingka Group aims to support businesses that increase the availability of recycled materials, thereby reducing the carbon footprint associated with resource extraction and promoting sustainability at scale.

Lukas Visser, Circular Investments Portfolio Manager at Ingka Investments, emphasized the importance of this transition:

“Ingka Investments is committed to transitioning towards a circular economy and retaining the value of materials. For us, that means investing in companies that are developing technology or growing capacity to prevent waste or supply recycled materials.”

IKEA, which contributes nearly half of its climate footprint through product materials, is committed to redesigning its products to be fully circular. The company’s goal is to use only recycled and recyclable materials, with a growing focus on increasing the proportion of recycled content in its products.

Since 2017, Ingka Group’s Circular Investments arm has been pivotal in promoting IKEA’s sustainability strategies, investing in companies developing innovative solutions to address gaps in recycling capacity. These efforts target key materials such as plastics, textiles, mattresses, wood, and food.

Ingka’s current investments have led to the recycling of approximately 2.7 million tonnes of material and the avoidance of over 9.4 million tonnes of CO2 emissions. Notable portfolio companies include RetourMatras, which focuses on mattress material recycling, Morssinkhof Rymoplast, a leader in post-consumer plastic recycling, and Next Generation Group, specializing in plastic recycling technologies.

Peter van der Poel, Managing Director at Ingka Investments, stated:

“Our €1 billion ambition to invest in growing recycling infrastructure is crucial to Ingka Group’s broader sustainability strategy to go beyond our own operations. Through investments, we are committed to doing our part to ensure that valuable materials are recycled and reused in the production of new products.”

Van der Poel also called for legislation that prioritizes recycling over incineration and landfilling, advocating for eco-design regulations that would stimulate demand for recycled materials.