Wood is IKEA identity. Forestry Chatham House

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1 Wood is IKEA identity

2 IKEA Forestry requirements since 1998

3 Solid Wood Board Materials Paper Catalogue Paper Corrugated Board Paper in Articles Other Paper Million m3 RWE Fresh Wood Raw Material Usage FY2011 Approximate ,9 7,9 0,4 0,4 0,1 0,01

4 Top Sourcing Countries FY12 Poland Germany Russia Solid Wood and Board material 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 5% 22% Lithuania Sweden China Romania France Slovakia Italy 2% 2% 2% Canada Czech Republic Thailand 2% Latvia 2% Vietnam 2% 2% 8% United States Austria 3% 4% 8% Brazil Belarus Croatia 6% 6% 7% 7% Ukraine Portugal Spain Finland Bulgaria Switzerland others

5 90% of IKEA retail market! EU Timber Regulation US Lacey Act Australia Illegal logging Bill

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8 Integration of ALL legal requirements IKEA s due diligence system

9 Role of certification IKEA considers the legal due diligence systems in certification best practice Control points are in the right place. In the forest or where the wood leaves the forest IKEA due diligence integrates both FSC and PEFC approaches to ensuring of legality

10 16 IKEA Foresters

11 Start-up of new IKEA supplier Initial IWAY assessment IWAY MUST approval First delivery Approved: a) Wood Procurement Plan or b) FSC chain of Custody (chp 15) Within 90 days to comply with applicable IWAY Forestry Standard procedures (chp.16, 17 or 18)

12 IKEA Approved Species List

13 IKEA Forestry Tools (1) Forest Tracing Survey (FTS) regular report from suppliers on wood material that could have been used in IKEA articles

14 IKEA Forestry Tools (2) Wood Procurement Plan (WPP) report from new and ongoing on suppliers on planned wood material sourcing for IKEA

15 IKEA Forestry Tools (3) Wood Tracing System (WTS) web based system for managing, visualizing, analyzing data from suppliers and storing data from audits.

16 IKEA Forestry Tools (4) IKEA Risk List for identifying high risk wood sources that may be present in IKEA wood supply chains

17 Auditing IWAY Forestry (5) IKEA IKEA Supplier

18 Auditing Wood Supply Chain Audits IKEA IKEA Supplier IKEA Sub-supplier Logging site

19 Bel RusLith arusia uani s a

20 Connect Data Shipment Data Declarations according by material supplier (IWAY and IOS-MAT-0087) Approved Species in Connect m3 Solid Pine Pinus primus, SE Pinus primus, FI Lacey Act Declaration Solid Pine layered Pinus primus, SE Pinus primus, FI Pinus secundus, PL m3 Layered beach veneer Fagus primus, SE Fagus primus, DK Fagus secundus, PL Plywood Pinus primus, SE Pinus primus, FI Solid beach Fagus primus, DK m3

21 PIA Custom system = new system functions Not affected Items affected by Lacey Act Item & HTSUS code Input modul HTSUS Codes requiring declaration Article affected by Lacey Act and requires declaration Connect Data Shipment Data Warning / manual handling Connect data is available Connect data not available Y/N Lacey Act Declaration

22 EU Timber regulation The Due Diligence System Key Elements 1. Information 2. Risk Assessment 3. Risk Mitigation

23 It is not normally possible to trace individual product back to the forest

24 Materials of wood origin in a modern simple chest of drawers Board, 3 types Paper core foil, 3 types* Paper core edge band* 7 composite wood based materials

25 Material sourcing for a simple product Pulp x 3-4 x x Paper x 2-3 Pulp x 3-4 Foil x 2-3 Paper x 2-2 Board x 3-5 x Foil x 1-2 Furniture producer IKEA Board x x 2-3 Board x 2-3 Foil x 2-3 x Foil x 2-3 x Paper Paper x 2-3 Pulp x 2-3 x 3-4 x Pulp x 3-4

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37 Material sourcing for a simple product Pulp x 3-4 x x Paper x 2-3 Pulp x 3-4 Foil x 2-3 Paper x 2-2 Board x 3-5 x Foil x 1-2 Furniture producer IKEA Board x x 2-3 Board x 2-3 Foil x 2-3 x Foil x 2-3 x Paper Paper x 2-3 Pulp x 2-3 x 3-4 x Pulp x 3-4

38 Wrap up System approach Physical tracing of wood is resource inefficient Mitigation has to take place in the supply chain to bring the risk down to low before placing on the market Business advantage for companies who have operational DD systems We are happy to share our 15 years of experience