Ingka Investments, the investments arm of Ingka Group, the largest IKEA retailer representing 90% of IKEA sales, announced plans to invest €1 billion in companies enabling growth in recycling infrastructure.

According to Ingka Group, the new initiative is aimed at supporting the transition to a circular economy, with the company noting that the global economy consumes 75% more natural resources than the Earth can regenerate, while less than 20% of waste is recycled.

Under its new goal, the company said that it aims to grow businesses that promote mass circularity, increasing the availability of recycled materials on the market, while avoiding millions of tonnes of CO2.

Lukas Visser, Circular Investments Portfolio Manager at Ingka Investments, said:

“Ingka Investments is committed to transitioning towards a circular economy and retaining the value of materials. For us, that means investing in companies that are developing technology or growing capacity to prevent waste or supply recycled materials.”

Nearly half of IKEA’s climate footprint is generated through the materials used in its products. The company has committed to design all products with circular capabilities, and is targeting the use of only recycled and recyclable materials, with a focus on increasing the share of recycled content in IKEA products.

Ingka Group launched Circular Investments in 2017, to support IKEA’s circularity strategies by investing in companies developing technology or growing capacity to prevent waste or supply recycled materials, with a key focus on materials where recycling capacity is lacking, including mattresses, plastics, textiles, wood, and food.

To date, the company estimates that its portfolio companies have recycled approximately 2.7 million tonnes of material, and avoided more than 9.4 million tonnes of CO2e emissions. Investments include mattress material recycling venture RetourMatras, post-consumer plastic recycler Morssinkhof Rymoplast, and plastic recycling solutions group Next Generation Group.

Peter van der Poel, Managing Director at Ingka Investments, said:

“Our €1 billion ambition to invest in growing recycling infrastructure is crucial to Ingka Group’s broader sustainability strategy to go beyond our own operations. Through investments, we are committed to doing our part to ensure that valuable materials are recycled and reused in the production of new products.”

Van der Poel also called for legislation that prioritized recycling over incineration and landfilling, and welcomed eco-design regulations to encourage demand for recycled materials.