Inter IKEA Systems B.V Page 1

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2 Vision & business idea. To create a better everyday life for the many people. Offer a wide range of welldesigned, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Inter IKEA Systems B.V Page 2

3 Sustainability Direction 2015 Offer a range of products that are more sustainable Take a leading role in a low carbon society Take social responsibility Turn waste into resources Reduce our water footprint Page 3

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5 Sustainability at IKEA: an integratedpart of our business. Wherever we are, we act with respect to exert a positive impact on people and on the environment Page 5

6 throughout the value chain Raw materials Manufacturing Idea Distribution Sustainability Direction Marketing End of life Product use IKEA stores Page 6

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8 How do we COLLABORATE WITH SUPPLIERS? - Long term relationship - Social and environmental standard: IWAY - Requirements on row materials (wood, cotton) - Social cooperation (kids) - Transfer of tecnology: reduce water and energy consumption at supplier level Page 8

9 IKEA has established its view on working environment, child labour and environmental issues in a document: The IKEA Way on Purchasing IWAY standard is based on ILO and UN conventions or other standard internationally aproved Page 9

10 IWAY 1 GENERAL CONDITIONS AND LEGAL COMPLIANCE 2 ENVIRONMENT AIR, NOISE AND WATER POLLUTION 3 GROUND CONTAMINATION 4 CHEMICALS 5 HAZARDOUS AND NON-HAZARDOUS WASTE 6 FIRE PREVENTION 7 WORKER HEALTH & SAFETY 8 HOUSING FACILITIES 9 WAGES, BENEFITS & WORKING HOURS 10 CHILD LABOUR 11 FORCED AND BONDED LABOUR 12 DISCRIMINATION 13 FREEDOM OF ASSOCIATION 14 HARASSMENT, ABUSE AND DISCIPLINARY ACTIONS 15 CONTINUOUS IMPROVEMENTS 16 ROUTINES FOR PROCUREMENT OF WOOD, BAMBOO & RATTAN 17 FULFILMENT OF IKEA AND LEGAL FORESTRY DEMANDS Page 10

11 IWAY: IKEA : IKEA s s social and environmental standard for suppliers years with IWAY has resulted in more than 165,000improvements Now also for suppliers of FOOD, Logistics and store operations(cleaning, advertising, etc.) suppliers, with internal auditors. Page 11SUSTAINABILITY IKEA BUSINESS PLAN FY12 WEEK 46

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13 BETTER Cotton Water & chemical management By 2015 we will save 10,2 trillion liters of water Results so far; Reduction of pesticides 50% Reduction of use of water resources 50% Reduction of use of chemical fertilisers 30% 78% more cost effective and save 9 million Kg of pesticides and 265 million Kg of agro chemicals Page 13

14 BETTER COTTON Page 14

15 Forestry progress IWAY approved 97,2% FSC from 7 to 16,2% Page 15

16 Our view on child labour. We do not accept child labour. We support the rights of the child. Inter IKEA Systems B.V Page 16

17 Definition. What is child labour? Work performed by children, which interferes with a child s right to healthy growth and development and denies him or her the right to quality education. Inter IKEA Systems B.V Page 17

18 Child labour in reality. 250 million working children 5-14 years of age. 120 million working fulltime. Approx. 5% within export industry. Inter IKEA Systems B.V Page 18

19 Causes of child labour. Poverty. Indebtedness of families. Poor quality education. Adult illiteracy. Cultural and personal attitudes. Willingness to exploit cheap, docile labour. Limited law enforcement. Inter IKEA Systems B.V Page 19

20 Aid through trade. Trade assists development. The best way we can help is through active business co-operation. Our presence gives us the possibility to put demands on our suppliers. Inter IKEA Systems B.V Page 20

21 Our key point. All actions concerning the child shall take into account his or her best interests. Inter IKEA Systems B.V Page 21

22 Follow-up and monitoring. Regular visits by IKEA co-workers. Random, unannounced inspections by independent external auditing companies in India and Pakistan. A 100% guarantee is impossible. Inter IKEA Systems B.V Page 22

23 Supplier Energy Efficiency Project (SEEP) The aim is to increase efficiency significantly, which is expected to have a positive impact on total purchase cost, too. SEEP is to be understood as "umbrella" project to all other initiatives and projects with similar intention. Page 23

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