Inside Small Business | Small Business & Home Business Marketing

Be a Socially Responsible Corporation

CORPORATE SOCIAL RESPONSIBILITY is part of our daily business. IKEA has set a sustainability objective requiring that all our activities have an overall positive impact on people and the environment. We have a list of key performance indicators to measure our progress on CSR issues, such as the environment. Of course, it?s not easy to link our CSR performance directly to fi nancial performance, but we believe that our efforts have a positive impact on the numbers. Since we?re not a public company, I feel that the link between fi nancials and CSR progress is less of an issue for us.

Our mission is to create a better every day life for the many - the people we aim to serve - which has made it easy for us to incorporate social and environmental goals into our strategic planning. It means that we have to reflect what our customers and other stakeholders value. In the 1980s, in the wake of a scare in Denmark about the harmful effects of formaldehydes used in manufacturing furniture, we started paying close attention to the materials and processes our suppliers used in the manufacture of the goods we sell. Child labor, which is a major concern of ours, surfaced at the beginning of the 1990s, following the 1989 Convention on the Rights of the Child. We also focus heavily on sustainable forestry, as you would expect from a furniture supplier that uses a lot of wood.

Geographically, IKEA focuses on where it can make a difference. We obviously can't save 250 million children from exploitation, but changing the lives of 80,000 children in, say, Uttar Pradesh is still a big accomplishment. To help us in these tasks, we've partnered with NGOs such as Save the Children and UNICEF as well as the WWF. We're also in touch with Greenpeace.

Save the Children in particular helped us formulate our strategy on preventing child labor. It pointed out to us that all actions should be in the best interests of the child. That principle helps us to determine what to do when we fi nd an individual child employed at a supplier and, more broadly, what we can do in the community. A child working in a factory may serve the short-term interests of the child's family but not the child's own interests. And offered a choice, most parents would not send their children to work.

Our partnerships with NGOs are a relatively small part of how we are making ourselves a socially responsible company. More important is what we do in development and design, where keeping prices low and meeting our CSR goals requires some clever thinking. We also have to exercise control over our suppliers, to ensure that they are adhering to our product specifi cations and codes of conduct. This sounds a little like policing and, inevitably, there's an element of that, but increasingly they're willing and able to own the compliance themselves. Obviously, it helps when you are a large and longterm customer, and that's one reason why we've been consolidating our business, bringing the number of our suppliers down from 2,500 to 1,300 or so over the past few years.

Going forward, we will refl ect the growing concern in the developed world about climate change. Climate change has become a dinner-table conversation topic everywhere. There's a lot to do in this area. We are building roughly 20 new stores a year and our design decisions - such as the lightbulbs we use - can make a difference to our CO2 emissions. Down the line, we?re looking at alternative transportation for our delivery services - IKEA Switzerland, for example, is considering the use of electric cars for home delivery. And in building new stores, we're looking at locations with transportation options other than using a car. Our goal is to become 100% reliant on renewable energy for our energy needs and to cut overall energy consumption by 25%.

So far, our biggest problem in embedding CSR has been communicating to our people what we're doing. Like most large retailers, we have a high staff turnover in the stores. And the plight of children can seem remote. But when it comes to climate change, I think everyone will get engaged. It hits us all so directly. We offered screenings of Al Gore's fi lm An Inconvenient Truth in some of our units, and the interest was incredible.

No company will be able to shirk social responsibility. My advice to managers is that becoming a socially responsible corporation takes longer than you think and involves not a giant leap but thousands of small steps.