Explained: IKEA’s IWAY Supplier Code of Conduct

How does IKEA’s IWAY supplier code of conduct support its sustainability strategy?

IKEA first launched its IWAY (IKEA Way on Purchasing Products, Materials, and Services) strategy in 2000. The programme serves as IKEA's code of conduct for its suppliers, outlining its expectations linked to social and environmental responsibility, including labour conditions, safety, and environmental practices. Over more than two decades, IWAY has been continually updated and improved to reflect evolving sustainability standards and industry best practices.

The trend-setting procurement strategy is based on internationally based standards in categories such as worker rights and environmental protection.  The approach forms a basis for its relationship with its direct procurement partners and subcontractors through the tiers of its supply chain.  

"At IKEA, we interact with many suppliers and service providers, whether it's producing furniture or transporting products to customers. Therefore, we need to ensure that the people involved in these activities are well-treated and that the environment is protected", says Joana Barata Correia, Head of Responsible Sourcing Development and former IWAY Development Manager at IKEA.

Joana Barata Correia Head of Responsible Sourcing Development, Inter IKEA

What are the 10 principles of IKEA’s IWAY programme ?

  1. IWAY principles are supported by effective routines and open dialogue
  2. Business is conducted lawfully and with integrity
  3. Children are protected and opportunities for work, learning and family life are promoted
  4. Fundamental labour rights are respected
  5. Workers have time off work, are paid responsibly and have opportunities to develop competence
  6. Workers’ health and safety are protected
  7. Working and living conditions are suitable
  8. The planet is protected
  9. Resources, including water and waste, are managed in a sustainable and circular way
  10. Animals live decent lives

The evolution of IKEA’s IWAY strategy 

In 2020 IKEA introduced a new range of supplier requirements as part of its IWAY strategy.  One of the new areas addressed in the updated IWAY strategy is the response to emerging forms of work, such as gig economy employment. This includes independent contractors or freelancers who utilise digital platforms to offer services like home deliveries, installations, or consulting. These individuals operate independently and do not have a traditional employment relationship with the digital platforms they engage with. 

"In the past, we demanded that suppliers adhere to our social and environmental requirements, and we spent all our efforts to verify their compliance. However, we realised that audits alone do not motivate our suppliers to develop beyond the minimum requirements,” says Correia. 

“To create a stronger positive impact and continuously develop, there are two essential enablers, besides auditing. One is to empower and have regular conversations with suppliers, and the other is to trust them in leading change. Still, audits remain a very important part of the IWAY system, and compliance is, and remains, important."

To address this issue, the project team collaborated to develop extra IWAY standards aimed at guaranteeing decent and meaningful work for digital platform workers. These additional requirements include setting a maximum limit of 60 working hours per week related to IKEA tasks and ensuring workers receive a minimum of six consecutive hours of rest within every 24-hour period. Additionally, suppliers are also obligated to ensure that digital platform workers earn compensation equivalent to at least the legal minimum wage for the services they provide in association with IKEA.

Flags Outside IKEA Store UK (Credit IKEA)

The future of the IKEA IWAY strategy 

IKEA has committed to the continued development and evolution of the IWAY strategy, to implement it further into its company supplier network and value chain.  

"People in the lower layers of the value chain are the invisible ones, but they also deserve decent work, and the environmental impact at this level is also really important. IWAY has been developed in such a way that it's supposed to work for both direct suppliers and different levels of subcontractors. We know that many of the issues regarding children's rights, decent work, environmental impacts, and animal welfare are not at the direct suppliers. This is where we have our biggest opportunity to make a difference", says Barata Correia.

Read more about IKEA and circular economies 

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