Why Ikea's $1 billion Environment Pledge is About So Much More than Climate Change

Whether you like the company’s wares or not, Ikea is the world’s largest furniture retailer, and its year-over-year profits are proof positive of that position. Not that we are generally concerned with the fiscal health of Ikea. But the company has pledged to give away at least 3 percent of its profits annually, and that is a matter of importance to nonprofits, because as the company’s profits increase, so too does the Ikea Foundation’s grantmaking.

The Ikea Foundation has been around for decades, but when you compare its charitable giving back then to what it is now, you’re looking at two completely different worlds. 

When it was first established, the Ikea Foundation focused its grantmaking on architecture and interior design programs. Decades on, Ikea has not only significantly increased its grantmaking, but it’s quickly building a reputation in spaces where other funders don’t. Recently, for example, Ikea has been really dialed-in to the growing refugee crises in Syria, Sudan, and Iraq. These are all areas of the world where many other funders fear to tread.

Related - Ikea Foundation Goes Where Other Funders Won’t. This Time: Sudan

Lately, Ikea has been paying a lot of attention to various ongoing global refugee crises, but the foundation’s areas of interest also include combating child labor, disaster relief, and female empowerment. Although the environment doesn’t generally fall under one of the foundation’s broader grantmaking programs, Ikea is keenly aware of the negative impact the manufacture of its products has on not only on the environment, but the populations Ikea's philanthropy looks to help. Which is why its latest $1 billion environmental pledge is about so much more than climate change.

Over $600 million will go toward green energy efforts like solar panels and wind energy. The remaining $400 million will be dedicated to helping poor communities around the world cope with the effects of climate change.

Related: Keep an Eye on the Ikea Foundation. It’s Getting Bigger, and Goes Where the Pain Is

Climate change is inextricably linked to poverty. The relationship here is complex, but at its most basic, poor people have fewer resources to recover from climactic shocks as a result of climate change. Whether those shocks are storms that destroy homes, droughts and floods that wipe out crops, or landslides that contaminate potable water—once these weather related shocks occur, poor families must reallocate their assets and energies toward recovery efforts. This can include keeping children out of school to help with cleanup and rebuilding efforts, selling livestock for less than market value, and having fewer income-producing crops to sell.  

Ikea’s green energy efforts also benefit poor communities by bringing renewable energy technologies into homes, schools, and local businesses.

The bottom line is that if there is any hope of alleviating extreme poverty across the globe, considerable action is required to decrease the drivers of climate change. In this regard, the Ikea Foundation is definitely dialed-in, and it’s not afraid to flex its considerable financial muscle to help alleviate some of the most acute forms of human suffering across the globe.