The issue
The IKEA Group is one of the world's largest home furnishings companies. It operates 165 stores in Europe, North America and Asia and sources products from approximately 1,600 suppliers in 55 countries. IKEA has a strong company culture based on IKEA's fundamental values of creating a better everyday life for as many as possible. Therefore, it is a natural part of IKEA's business to ensure that all products are produced considering strong environmental and social standards.
IKEA has considered the incorporation of the values in the entire supply chain to be a long process of learning. Through their trading service offices IKEA works closely with their suppliers and visits them on a regular basis. IKEA has contact both locally and internationally with organisations such as UNICEF, Save the children, the International Labour Organisation (ILO), WWF and Greenpeace. IKEA also has an agreement with IFBWW.
IKEA wanted to create a strategic and systematic approach to responsible supply chain management. Therefore, they contacted PricewaterhouseCoopers to have procedures further developed and incorporated in order to ensure that all their suppliers produce in accordance with internationally recognised conventions and standards within environment, forestry, social and working conditions.
Our approach
PwC took a global approach to creating a solution. Our project teams provided:
- Advisory services in connection with the development of the IKEA Code of Conduct that defines IKEA’s requirements regarding social and working conditions, child labour, environment and forestry;
- Advisory services regarding development of routines, procedures and distribution of roles and responsibilities within IKEA.
- Advisory service in connection with IKEA’s development of control and reporting tools to ensure consistent compliance with the IKEA Code of Conduct;
- Participation in the development and training of IKEA’s internal auditors in the implementation of the IKEA Code of Conduct.
- Participation in calibration visits to IKEA suppliers - including on-site training at supplier’s premises of IKEA’s internal auditors.
- Third party monitoring visits to randomly selected IKEA suppliers to ensure suppliers’ compliance to IKEA Code of Conduct and provide an overall evaluation of IKEA’s compliance system
The outcome
The implementation of PricewaterhouseCoopers' solution contributes to IKEA being able to:
- Have an internally embedded responsible supply chain program - including trained internal auditors;
- Better ensure acceptable conditions in the supply chain within environment, working conditions and human rights; and
- Improve compliance processes and procedures via feedback from calibration visits and PricewaterhouseCoopers’ overall evaluation of the compliance system.
