Ingka Investments, the investments arm of Ikea-owner Ingka Group, has announced it will invest €1 billion in companies that are increasing recycling infrastructure.

The company said that the investment will support the transition towards a circular economy by supporting the recycling of more end-of-life products into secondary raw materials.

It added that through the new investment it aims to grow profitable businesses that avoid millions of tonnes of CO2 emissions and increase the availability of recycled material on the market.

Peter van der Poel, managing director at Ingka Investments, said that the investment is crucial to growing the group’s sustainability strategy and ensuring that Ikea can use valuable recycled materials during production.

In 2017, Ingka Group established Circular Investments to invest in companies contributing to the transition to a circular economy with a focus on making a difference for plastics, mattresses, textiles, wood and food waste.

Since Circular Investments launched, Ingka investments estimates that its portfolio companies have recycled around 2.7 million tonnes of materials, avoiding over 9.4 million tonnes of CO2 emissions.

The business said that every year the global economy consumes 75 per cent more natural resources than the earth can regenerate, causing tremendous amounts of waste of which less than 20 per cent is recycled.

Companies in the portfolio are Morssinkhof Rymoplast, which produces recycled plastics for brands. Ingka Investments estimate that its funding has allowed the company to double its plastic recycling capabilities to 515,000 tonnes per year.

“What would help us go further is if legislation was stronger at prioritising recycling over incineration and landfilling, for example by ensuring that Extended Producer Responsibility schemes were resulting in higher recycling rates,” said van der Poel. “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.”

---