Circular Economy to Make IKEA a More Sustainable Company

Federico Pumpin Martínez

Ingka Group is the biggest IKEA franchisee in the world, operating close to 90% of IKEA stores.

They have three business areas: the core business, IKEA Retail with 379 IKEA stores,  Ingka Centres, with 44 meeting places (anchored by IKEA stores) and Ingka Investments, which is focused on making responsible investments in their core business or areas that add value for their customers.

Ingka Investments has seven portfolios: capital markets, forestry, renewable energy, real estate, venture capital, growth and business development and since 2022, circular economy.

It was this last portfolio that took an interest in my experience in waste management and industrial recycling and offered me a position as an MBA intern in early 2023. Thanks to the Impact Internship Award from the Hoffman Institute, I was able to take on this position which was a completely different industry from what I had experienced before. 

I felt very welcome in the Netherlands from the very first day.

The team was very open and although everyone spoke Dutch, they didn’t mind switching to English when I was there. I was able to develop very good relationships in the team in this short two-month period. 

INSEAD MBA Sustainability
1 Morssinkhoff HDPE and PP recycle plant. Federico in the far left with the Circular Economy Team from INGKA Investments

Although there where not any transactions going on, I was able to go through the numbers of the investee companies, which included the biggest plastic recycler in Europe, a plastic machine manufacturer, a food waste solution for industrial kitchens, a plastic sorting technology developer and a mattress recycler.

It was interesting that the biggest challenge was to learn how to use Google. There is only so much information for companies that are not public so you needed to rummage for information by looking at news, industrial associations, and verified databases.

My biggest project was a market research on wood recycling to identify investment opportunities, a very big topic for IKEA as they consume 1% of the world’s industrial roundwood production. With current recycled wood use in their products at 15%, they are looking for ways to increase this number. The study included an overview of the entire value chain, identifying areas where investments would make sense for IKEA, both economically and environmentally.

Working with an associate, we provided three investment themes along with a long list of companies for each of them.

I performed a high-level study for the recycled plastic market in the US and Canada, more focused on recycling capacities and company scanning to find the right investment profile. Other tasks included financial modelling for new operations in France for Retourmatras, the mattress recycler, and data analysis from NGH ERP to understand their cashflow situation.

All of these were combined with smaller day-to-day research on specific recycling companies and studies on new trends such as bioplastics, studying possibilities for IKEA. Given all of this, another important challenge was holding myself accountable, which I did it by setting deadlines and periodical meetings with the people involved in the projects. It was also important to prioritise the workload as there was a limited amount of time.

It was sad to say goodbye to a place where I felt so well integrated from the very first moment. Amsterdam is an amazing city and there were some good friends from INSEAD living there, which made the whole experience even better for me and my wife. I’m taking with me a lot of learning and more good memories after a great year.

This internship experience was supported by the INSEAD Hoffmann Institute Impact Internship Stipend and gifts from alumni.