The rise of ‘fast furniture’, driven by major retail companies such as Zara and H&M, underscores the need for stricter regulation. However, in February, the European Commission introduced a comprehensive set of proposals aimed at streamlining EU regulations, enhancing competitiveness, and unlocking further investment opportunities. Even though these proposals are aimed at ‘protecting’ the European economy, this rollback poses significant risks to objectives of the circular economy and the Green Deal. If companies fail to take proactive measures, these goals may be jeopardized.

Fast furniture?

In recent years, we have seen that ‘fast fashion’ has had a significantly negative impact on our environment. For example, approximately 4% of global emissions can be attributed to the clothing and footwear industries (information in Dutch). In addition to their already environmentally problematic business practices, these typical fast fashion brands, such as H&M and ZARA, have now ventured into fast furniture lines (H&M HOME and ZARA HOME). Their impact is already evident in the purchasing behaviour of consumers.

According to the Council for the Environment and Infrastructure: household expenditure on home furnishings rose by nearly 23% between 2000 and 2022 (page 20 of the report). This change in purchasing behaviour, resulting in 60% of furniture sold being classified as ‘fast furniture’, causes increased environmental degradation. In its advisory report ‘Phasing out the Throw-away Society’, the Council for the Environment and Infrastructure highlights the importance for the central government to adopt proactive measures, as relying on consumers is insufficient due to their vulnerability to corporate enticements.

EU legislation

The good news is that relevant EU legislation that applies to companies selling furniture already exists.

First, the Corporate Sustainability Reporting Directive (CSRD) mandates all companies listed on the EU market or companies with 250 or more employees to make a detailed sustainability report on Environmental, Social and Governance (ESG) matters. The ESG score is used to assess companies in relation to environmental and social issues, as well as good governance. Second, the Corporate Sustainability Due Diligence Directive (CSDDD) also applies to companies that sell furniture. This directive was adopted to ensure that relevant companies identify adverse human rights and environmental impacts of their actions inside and outside Europe.

Despite this existing legislation, if the aforementioned proposals are implemented, the CSRD will only apply to companies with at least 1000 employees and an annual revenue of at least 450 million euros. The CSDDD will no longer make companies halt their business relations with suppliers who violate human rights or flout climate rules. Instead, they may also merely suspend cooperation. This is a step backwards. The European Council and the European Parliament should adopt a critical stance towards these proposals. Even though the competitive position of Europe vis-à-vis other countries is important, it is currently being given undue precedence.

Good practice

Nevertheless, does this imply that major furniture companies will disregard the environmental impact of their operations? Take, for instance, IKEA. As the world’s largest furniture manufacturer, IKEA is committed to environmental considerations, a practice the company has upheld since its early years. IKEA publishes annual sustainability reports that summarise the progress that has been made towards the commitments stated in the IKEA Sustainability Strategy. According to this Strategy, the company aims to: become a circular and climate-positive business, while regenerating resources, protecting ecosystems and improving biodiversity. These ambitions were set for 2023. In the latest report, the company is on track to meet these goals. The company was also awarded the most sustainable brand in the ‘retail' category by the Sustainable Brand Index Netherlands in the years 2022, 2023 and 2024. The aforementioned goals and ambitions demonstrate IKEA’s awareness of its responsibilities and that it acts accordingly. This approach could serve as a model of good practice for other companies, including major furniture retailers.

What next?

The recent proposals put forward by the European Commission to make the sustainability rules more lenient, present certain challenges. While the intention to streamline reporting requirements and reduce the administrative burden on companies is understandable, there is a risk that such measures could result in companies playing fast and loose with their environmental responsibilities. Legislation plays a crucial role in holding companies accountable for their environmental and social impacts. If these safeguards become more lenient, larger companies could use this to their advantage and evade strict scrutiny.

Despite these concerns, there is still hope on the horizon. Exemplary companies such as IKEA, which demonstrate that large furniture companies can commit to sustainability and set ambitious goals, could certainly serve as a model for others to follow. In an ideal world, similar furniture companies could establish a new standard for sustainability within the corporate sector. Finally, the balance between economic competitiveness and environmental responsibility must be cautiously managed to ensure a future for all.