Author: Ciara Brennan, APPA Sustainability Manager
What does “Real Zero” mean?
Traditional Net Zero goals often allow companies to use carbon offsets or credits to counterbalance emissions they can’t reduce internally.
“Real Zero” refers to strategies that aim to eliminate greenhouse gas emissions at the source — phasing out fossil fuels, decarbonising operations and supply chains — rather than primarily relying on offsetting. (Ikea, Fortescue, Lendlease: The ‘real zero’ leaders leaving net zero behind)
The idea is that offsets can be prone to issues (credibility, additionality, permanence, risk of greenwashing), so more stakeholders are demanding that companies make measurable, in‑value‑chain reductions first.
IKEA’s “Real Zero” Strategy
IKEA is considered one of the leaders in this shift. Several recent reports and statements show how the company is moving toward more rigorous climate action. Key elements of IKEA’s approach include:
Ambitious Emission Reduction Targets
- IKEA’s Ingka Group (the major operator for IKEA stores globally) aims to halve absolute greenhouse gas emissions across its value chain (Scopes 1, 2, and 3) by FY 2030 compared to a FY 2016 baseline.
- They’ve set a target to reduce emissions by at least 90% by FY 2050 without relying on offsets for meeting these reductions.
Removing & Storing Carbon, and Circularity
- Removing carbon through forestry, agriculture, and better product design so that carbon is stored in materials/products for longer.
- Transitioning toward circular economy models (repair, reuse, recycling) to reduce material and waste impacts.
Reducing Emissions Across the Value Chain
- Focusing on ‘high‑impact’ areas: transport/logistics, materials (wood, metals, textiles, plastics), energy use (both in operations and in supplier factories).
- For example, committing to zero‑emissions home delivery, moving to renewable energy in operations, enabling suppliers to shift to renewable electricity.
Transparency and Operational Rigor
- Publishing transition plans with measurable interim milestones. IKEA has reduced its footprint by over 30% since 2016 as of their recent reporting. (IKEA’s Net Zero Plan: Transitioning from Targets to Action)
- Explicitly committing to avoid over‑dependence on offsets. Real Zero emphasis means reducing emissions rather than just balancing with credits.
Engaging with Stakeholders and Enabling Customers
- IKEA is not only changing its operations but also trying to help customers make more sustainable choices (less energy use, less waste, more circular behaviours).
- Also working with suppliers, investing in renewable energy, and pushing for clean transport in logistics.
Other Retailers & the Broader Trend
While IKEA is a prominent example, others are following or joining the movement toward stricter sustainability pledges:
- The report by Climate Integrity and UTS identified IKEA among several companies (including Fortescue and Lendlease) that are meeting “real zero” criteria — i.e., phasing out fossil fuels and reducing emissions directly rather than relying heavily on offsets. (UTS
- In Australia, IKEA, Kmart Group, Officeworks among others are participating in the Race to Zero Breakthroughs: Retail Campaign, which pushes retailers to adopt science‑based targets, act transparently, reduce emissions in their value chains, etc. (Australian Retailers Join Forces to Tackle Climate Change in the Race to Zero)
Why the Shift Now?
Several factors are pushing the movement from “net zero” to “real zero”:
- Scrutiny from consumers, investors, regulators: People are increasingly sceptical of offset‑heavy net zero claims, pushing companies to deliver real emissions reductions. (What retailers can learn from Ikea’s ‘real zero’ climate strategy)
- Greater clarity in climate science & policy: As scientific understanding and policy frameworks become tighter (e.g. the push for 1.5°C pathways), companies are under pressure to ensure their targets are aligned and credible.
- Competitive differentiation & reputational risk: Companies seen to do “just net zero” may be judged less favourably compared to those that commit to deeper change. Real zero is becoming a leadership lever. (Ikea, Fortescue, Lendlease: The ‘real zero’ leaders leaving net zero behind)
Challenges & Considerations
While “real zero” is a more robust approach to sustainability, it comes with its own challenges:
Technical & cost barriers
- Some emissions are intrinsically difficult to eliminate (hard‑to‑abate sectors, supply chain emissions in raw material extraction or transport).
- Upfront investment in renewables, low‑carbon materials, redesign, etc., is often high.
Supply chain complexity
- The bulk of emissions for many retailers lies in upstream supply chains (manufacture, raw materials) over which the retailer has limited direct control.
- Suppliers may be in regions with less regulatory or infrastructure support for renewables or emissions reductions.
Avoiding tokenism / greenwashing
- Ensuring that reductions are real, substantial, measurable and not simply shifting emissions or purchasing offsets without meaningful impact.
- Transparent reporting and verification are crucial.
Regulatory / policy alignment
- Real Zero initiatives are more feasible when supported by government policies (renewable energy subsidies, carbon pricing, transport infrastructure).
- Inconsistency across regions or lack of incentives can slow progress.
What to Watch as These Campaigns Evolve
Here are some emerging themes and metrics to monitor:
- Upstream & supply chain emissions become the true frontier
The harder challenge is Scope 3: raw materials, suppliers, component manufacturing, logistics far beyond your operations. Leadership will increasingly be judged on how well companies can influence or decarbonise those value chains.
- Integrated energy systems & storage
As onsite renewables scale, integration with battery storage, demand response, and grid interaction becomes critical (especially under variable generation). Without that, renewables alone may not secure reliability.
- Regulatory alignment & incentives
Policy levers (carbon pricing, renewable incentives, infrastructure subsidies, EV charging networks, building codes) will matter. Organizations that can align with or influence policy may accelerate their path.
- Consumer engagement & behaviour change
Circular models and reuse depend heavily on consumers returning products, opting for refurbished, maintaining rather than discarding. Success will hinge on convenience, incentives, trust, and awareness.
- Rigour over marketing
As sustainability claims proliferate, companies will be scrutinised. Those that overpromise or underdeliver risk reputational harm. Measurement, verification, and honest disclosure will be key.
- Cross‑sector collaboration & shared infrastructure
Some challenges (e.g. charging infrastructure, shared logistics, material supply) may be easier if retailers collaborate or co‑invest in joint infrastructure.
- Scalability & replicability
Demonstrating that “real zero” is viable not just in flagship stores or mature markets, but also for smaller locations, regional operations, and in different climate zones, will be critical.
Conclusion
The movement toward “Real Zero” reflects a maturing in corporate climate action: more audacious, more accountable, greater fidelity to reducing emissions at the source rather than postponing impact. IKEA’s strategy shows that translating this ambition into concrete action is possible, though challenging. For consumers, policy‑makers, and competitors, real zero is increasingly becoming the expected benchmark, not an optional extra.
