Ikea to invest €1b in impact companies – here's what they're looking for

Ingka Group, which owns more than 90 percent of IKEA stores worldwide, is making what could be called a historic investment through its investment arm, Ingka Investments.

One billion euros will be invested in impact companies.

Peter van der Poel, CEO of Ingka Investments, calls this investment crucial for the company's broader sustainability strategy.

"Through investments, we are committed to doing our part to ensure that valuable materials are recycled and reused in the production of new products", he says in a statement.

Textile and wood recycling

The funds are earmarked for impact companies working on recycling infrastructure. The focus is primarily on textile recycling, but also includes wood. Two-thirds of the capital will be allocated to this area.

According to Lukas Visser, Head of circular business investments at Ingka Investments, they aim to invest in companies that "are developing technology or growing capacity to prevent waste or supply recycled materials".

The remaining portion of the funding will go to companies in which Ingka Group has already invested, such as mattress recycler RetourMatras and plastic recycling company Morssinkhof Rymoplast.

Calling for tougher EU legislation

The investment comes ahead of upcoming EU legislation that is expected to introduce fees for every textile or clothing item sold within the union, to finance sorting and recycling.

Peter van der Poel is calling for stronger legislation prioritising recycling over incineration and landfill, for example by ensuring that extended producer responsibility systems result in higher recycling rates.

"We also welcome eco-design regulations to encourage the demand for these recycled materials and we are actively collaborating with relevant authorities and other stakeholders to address these issues", he says.

Ingka Investments currently invests in six areas: forestry and land, renewable energy, real estate, circular businesses, financial markets, and corporate acquisitions and venture capital investments.