When I talk to my friends who moved abroad for university this fall, they always seem to be building their furniture. Be it beds, closets, drawers, etc. Now, one might think isn’t building your furniture going to cost more than buying the already built furniture? This is where IKEA comes in. IKEA is a Swedish company that was founded in the year 1943. It is a multinational amalgamation that sells and designs “ready to assemble” furniture, home appliances, and more home good and services. The second question that we find ourselves asking is what does “ethical” mean? Ethics (also known as business ethics) means that there are correct and sound policies that are followed in the producing, selling, and marketing of the items. Let’s have a look at ‘Is IKEA Ethical?’.
A company is ethical when it doesn’t harm the environment, people and animals and is also contributes to our society in a positive, healthy, and sustainable way. Coming back to the main question: is IKEA ethical? There is no definite answer as there are a lot of pros and cons to this company. Further, this article will be listing all the pros and cons of this company. First, let’s start with the good:
Protecting the environment
– Even though IKEA uses 1% of the world’s wood to make the company’s furniture, the multimillionaire company still tries to contribute to making the planet better. The company had made tremendous headway in the renewable energy part. They have installed over 90,000 solar panels across their warehouses and showrooms across the globe. They have around 430 stores worldwide, which requires a lot of energy consumption. It also operates more than 400 wind turbines and aims to become “energy independent” by the year 2023.
– Aside from the progress, they made in the renewable energy area, IKEA is also looking forward to eliminating all home deliveries by 2025 which means that there will be a fully electric home transportation concept within the next six to seven years.
– IKEA also wants to reach a circular waste model by the year 2030. their objective is to eliminate single-use plastics that are used in their stores and combine them with the use of recycled material in the production of their products.
Now, we come to all the problems that IKEA has :
Labor and worker rights
Till the year 1994, IKEA was using child labor at its weaving looms in Pakistan. after being exposed by a Swedish television documentary, they sent their legal team there and learned that it was a global issue. Since then, they started to work with UNICEF to understand the global issue of child labor in Asian countries like Nepal, Pakistan, Bangladesh. Even after this incident, they continued to use underage labor (one of their largest suppliers used child labor).
Other than this issue, it also faces the issue of age discrimination. In 2019, IKEA was facing five lawsuits in just a year in the US court regarding the issue of age discrimination. According to these workers, the company refused to give them promotions, some were demoted instead and were paid according to their age and not potential.
They also faced the issue of excessive working hours with inadequate pay. In 2017 the drivers were told to drive huge heavy lorries which are very dangerous, that too at a pay of fewer than three euros per hour.
Politics
Between the years 2009 to 2014, IKEA has tried to avoid taxes worth 1.1 billion euros. The report stated that IKEA has built and placed itself in such a position that it dodges taxes using European tax-havens.
In 2019, the multimillion company received the worst rating from ethical consumers for using tax-avoiding strategies. Adding on to this, IKEA spent 40,000 USD dollars on lobbying in 2018. It was also a member of euro commerce., WBCSB and world economic forum. These forums were considered to be detrimental to the environment and human rights by ethical consumers.
Conclusion
To conclude, the last question we might ask is: where does IKEA stand in the year 2022? In 2022, IKEA continues to portray both unethical and ethical practices in various parts of the company. IKEA tries to put ethical standards in its working process and also tries to be environmentally sustainable. The Swedish company tries to demonstrate good leadership in its approach to be more sustainable and ethical in the furniture and the home furnishings industry.
FAQs
Question 1) How is Ikea so cheap?
Answer) IKEA can keep its prices low and is also able to cut its costs due to the way they package its products.
Question 2) Who are IKEA’s competitors?
Answer) A few of IKEA’s competitors are Walgreens, Pepperfry(India), sears, Tesco, and Amazon.
Question 3) How much was IKEA valued in 2021?
Answer) IKEA was valued at nearly 18 billion dollars USD in the year 2021.
Question 4) Does Ikea have its stores in India?
Answer) Yes, IKEA has been in India for the last 30 years and has its stores in Delhi and Mumbai.
