Furniture Industry ESG Thematic Report, 2023

Furniture Industry ESG Thematic Report, 2023

Compliance, ESG Challenges & Framework, ESG Trends

  • Published Date: Nov, 2022
  • Report ID: Astra-100153
  • Format: Electronic (PDF)
  • Number of Pages: 63

Environmental, Social, and Governance (ESG) in the Furniture industry

The incorporation of Environmental, Social, and Governance (ESG) factors along with financial reporting help in the investment and decision-making processes leading to responsible investing. Since 2013 the investment into ESG parameters has escalated; predominantly, the furniture sector has seen a rise in the adoption of distinct manufacturing products and services globally to support environmentally friendly approaches in recent times.

Prominent leaders in the furniture sector are aware that millennial and generation Z customers are driven toward sustainable eco-friendly furniture. It propels companies to adopt greener methods of manufacturing and helps engage with customers to understand how they can create responsible products. Further, different green projects covering both commercial and residential sectors have helped curtail negative impact on climate change.

According to a study by TreeHugger, in 2020, the global, Covid-19 pandemic has increased the time of an individual staying indoors. This is an indirect contributor to the increasing shift of communities to purchase eco-friendly furniture. Not only due to the release of harmful pollutants but also due to the durability of alternative raw materials used in the manufacturing of these products has resulted in leading players in the furniture market to a adopt environmentally friendly designing and manufacturing processes. Since then, sustainability has been expressed as an essential factor in growth strategies by various real estate agents and governments worldwide and the furniture sector has attained enhanced attention from investors attracted towards ESG impact investing.

Key companies researched in this furniture market have built on this market position to develop several sustainable strategies aiming to create a positive ESG impact within this sector.

ESG Trends

Companies in the furniture industry promote a reduction in emissions, which provides enhanced access to fresh air, promotes green projects, and ensures sustainable consumption and production patterns. More importantly, this focuses on switching over to eco-friendly products.

Top companies and organizations in the furniture space are provide customers with alternative options in the use of wood, materials, and patterns in accordance with the increasing demand for portable and space-saving products among consumers. Further, the use of sustainable materials helps the furniture market to remain competitive in the dynamic business landscape. 

The furniture sector is exclusive, as it provides extensive advantages in achieving the United Nations - Sustainable Development Goals (UN – SDGs). A few of the major SDGs that come into focus are Good Health and Well-being, Gender Equality, Reduced Inequalities, building resilient infrastructure, promoting inclusive and sustainable industrialization, fostering innovation, and ensuring sustainable consumption and production patterns.

The furniture sector has reduced the utilization of traditional furniture materials which led to the release of harmful pollutants such as volatile organic pollutants, and toxicants that cause migraines, nausea, allergies, and asthma. Besides this, the shift to enhanced use of sustainable products in the manufacturing processes like rubberwood, wicker, bamboo, reclaimed wood, and many others has resulted in the creation of solutions to conserve natural resources.

ESG Challenges

After the Covid-19 pandemic, the furniture sector has come across various challenges ranging from its adoption of e-commerce and technology to supply chain stocks. The industry has also faced a major drawback in terms of monetary issues related to the enhanced rate of raw material imports and reduction in the rates of their exports, thereby resulting in a double curse of reducing profits.

The industry is also threatened due to enhanced costs of safety regulations, which require the producers to present a warning list of the utilization of various toxic chemicals and substances. To bridge the consumer sentiments, investors are looking for investment opportunities to build sustainable and eco-friendly products that promote their efforts toward climate change and financial inclusion. To this, major companies’ part of this report has strategies and initiatives focused at improving their overall efforts from an ESG perspective which are further discussed in detail within the thematic report. 

The Growth Of Furniture Market

In 2019, the global Furniture market size was valued at USD 531.5 billion and is expected to expand at a compound annual growth rate (CAGR) of 5.1% from 2020 to 2025. By 2025, due to rapid urbanization along with the expansion of the IT sector, the residential component in the Asia Pacific region is expected to achieve a market size surpassing USD 90 billion. Similarly, for the predicted period, Europe is estimated to grow at a CAGR excelling 5.0% due to the upsurge in the tourism market resulting in the increased demand for luxury furniture in the hospitality sector. Further, the continuous switch followed by customers towards personalized theme-based house decor and periodic renovations of houses has enhanced the validation of luxury furniture, covering both wooden and glass furniture.

Key Companies in this theme

    • HNI Corporation

    • Kimball International, Inc.

    • Herman Miller, Inc.

    • KOKUYO.

Scope of The Furniture Industry ESG Thematic Report:

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of Furniture Industry ESG Thematic Report:

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the furniture sector, globally

    • Key insights into Infrastructure developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the industry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment

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