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The Environmental Sustainability - Ikea and Tesco

Essay by   •  November 22, 2016  •  Case Study  •  1,292 Words (6 Pages)  •  1,145 Views

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The environmental sustainability

Within the business arena, large corporations are generally competing with each other in the aspect of profitability and reputation. In the effort of maximizing profitability, business ethic always causes dilemma situation to the corporation management team. It is undeniable that most of the time the ethical probity are undermined by business culture which encourage involvement of corporations in unethical actions and decision to make profit or reach their business objective and goals. In the process of business operations, especially the industrial corporations, the environmental issues always emerged in the mind of stakeholders. As we known, environmental pollution is the greatest problem that the world is facing. Environmental damage inevitably threatens the welfare of human beings as well as flora and fauna. Thus, awareness of environmental protection has been advocate and publicize to all society include corporation as well as multinational corporation. There are some example of corporations implemented sustainability practice in their business in order to commit to environmentally sustainable social and economic development.

  1. IKEA Company

IKEA engage in global furniture industry, which with the vision of creating a better everyday life for the many people. Sustainability - environmental, economic and social well-being becoming an integrated part of their business and is one of the strategic cornerstones in the IKEA Group direction “Growing IKEA Together”. The IKEA sustainability direction was launched in 2013, sets a common framework for all IKEA trademark companies and “People & Planet Positive” strategy to compliments that direction.

IKEA strives to minimise negative impact on the environment on their business activities. Cost consciousness is part of business culture and it inspires they try to make more products from less resources and minimise waste in the business activities. IKEA has the possibility to contribute a healthy environment to the society by reduce greenhouse gas emissions, save energy, minimize waste and water consumption. For example, IKEA try to reduce carbon dioxide emissions from all aspects of operations, including product manufacturing, raw material extraction, energy usage in IKEA buildings and transportation.

In year 2009, IKEA make investment in sustainable energy with capital EUR 1.5 billion and committed to invest another EUR 600 million in solar panel systems and wind turbines in order to avoid depletion of renewable energy. As resulted, IKEA was performs efficiency in energy consumption aspect through operating its own wind turbines around the global and their buildings had been installed with solar panels to supply the energy for electrical usage.

In addition, IKEA also strived for innovative and efficient transport solutions for their products to minimize the environmental impact from transportation. They increase the number of products per shipment and reduce the number of journeys by packaging and loading products more efficiently. In 2015, the total of carbon emissions per cubic metre of product transported were 27.2% lower than 2011, which means that IKEA have already reached 2016 target to reduce transport emissions by 20%. (Table 1.0)

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Table 1.0

IKEA also focus on the management and disposal of the waste. 90% of the waste will be recycled or sent for energy recovery, of which 50% of the waste from stores and distribution centres and 40% from IKEA Industry Group will be material recycled. IKEA try to implement a centralized recycling initiative that installed repackaging machines to enable repair and repackage of the damaged items.  Equipment such as baling machines help to handle waste more efficiently and increase recycling options.

Furthermore, IKEA also wisely to utilize their main raw materials in the production such as wood, paper, leather and cotton. These raw materials are potentially sustainable resources which is renewable, reusable, recyclable and biodegradable, therefore IKEA managed them responsibly and efficiency in a way that benefits society and the planet. IKEA follow IWAY Forestry Standard which not engage in illegal forestry operations and compliance all the rules stated in the IWAY. IKEA also invest in farming practice that reduce fertilizer, pesticide and water usage, improve working conditions and the earnings for farmers, and benefit ecosystem health and biodiversity conservation. (Dudovskiy, Research Methodology, 2015), (IKEA Group Sustainability Report FY15, 2015)

From here, we notices that, IKEA are giving fully commitment to involved themselves to protect the environment. Furthermore, IKEA also conscious and concern to the issue of environment and try to maintain the balance in environment.

  1. TESCO

British multinational grocery merchandise retailer, Tesco, which is one of the top three retailers in the world with more than 440,000 members of staff serving 30 million customers every week. TESCO has joined into The Sustainability Consortium (TSC), is an independent organization of diverse global participants that work collaboratively to build a foundation that drives innovation to improve consumer product sustainability. TSC develops methodologies, tools, and strategies to drive products and supply networks that address environmental, social, and economic imperatives.

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