Designing for Circularity at Scale: A Conversation with Karen Pflug of Ingka Group
- 21 MAY 2025
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- Climate Rising
In the latest episode of Climate Rising from Harvard Business School, Karen Pflug,
Chief Sustainability Officer of Ingka Group (IKEA), shares how IKEA is embedding circularity
throughout its business model. She discusses how IKEA is redesigning iconic products
like the Billy bookcase to make them easier to disassemble and repair, how secondhand
retail pilot programs at IKEA stores are reaching new customers, and how investments
like RetourMatras are developing circular solutions for end-of-life mattresses. Karen
also describes how policy, design, and customer nudges can accelerate circularity
at global scale—and offers advice for those seeking careers in circular economy innovation.
In the latest episode of Climate Rising from Harvard Business School, Karen Pflug,
Chief Sustainability Officer of Ingka Group (IKEA), shares how IKEA is embedding circularity
throughout its business model. She discusses how IKEA is redesigning iconic products
like the Billy bookcase to make them easier to disassemble and repair, how secondhand
retail pilot programs at IKEA stores are reaching new customers, and how investments
like RetourMatras are developing circular solutions for end-of-life mattresses. Karen
also describes how policy, design, and customer nudges can accelerate circularity
at global scale—and offers advice for those seeking careers in circular economy innovation.
Climate Change Is Messing up Our Home Insurance Prices. What Can States Do?
Re: Ishita Sen
- 08 Apr 2025
- |
- PBS
Climate Risk and the U.S. Insurance Gap: Measurement, Drivers and Implications
- 2025
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- Working Paper
In a world with rising risk, how much are U.S. households willing to pay for homeowners insurance, and what does their demand imply for the future of insurance markets? We provide the first estimates of household willingness to pay for homeowners insurance and the drivers of household insurance demand elasticities by exploiting quasi-exogenous regulatory shocks to insurance pricing. We utilize newly available individual-level data on homeowners insurance contracts covering the entire United States for over a decade, with rich information on mortgage contracts, property characteristics, and climate exposures. We document pervasive under-insurance, particularly among the most financially vulnerable households. We find that even at actuarially fair premiums, households’ willingness to pay is below expected losses, and demand remains elastic—results that are inconsistent with the textbook models of insurance demand. Financial constraints are a key force: constrained households reduce coverage as premiums rise, while unconstrained households borrow more to maintain insurance coverage. Exogenous increases in the cost of credit also reduce coverage demand. These results raise the concern that financial constraints reduce willingness to pay for insurance even below the actuarially fair price required for insurers to remain solvent, suggesting that the market may disappear for the most constrained, financially vulnerable households. If prices were to continue growing at historical rates moving forward, our estimates imply that between 17% to 31% of households would hit binding LTV constraints and be forced to reduce coverage substantially, meaning insurance markets may shrink even as losses from natural disasters rise.
'Care in Every Drop': Ayala Corporation and Manila Water (A) and (B)
- APRIL 2025
- |
- Teaching Material
Teaching Note for HBS Case Nos. 324-038 and 324-039.
Institutional Entrepreneurship and Climate Change
- 2025
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- Book Chapter
This chapter explores when and why private regulatory governance systems became the primary form of global environmental governance. The chapter explores two different historical paths in such private regulation and how they came about. The first path involved certification and standards programs designed to facilitate the growth of green industries and the early stages of ESG investing. The second path, which developed from the 1970s, grew out of the interest of big business which sought an alternative route to governmental regulations they regarded as costly and as a threat to international trade. A key agent was the International Chamber of Commerce during the 1990s. The chapter argues that self-regulation proved an inadequate response to climate change, and resulted in confusing metrics, lack of transparency, and blatant greenwashing. Yet it is not apparent that government regulation was practical or would have produced better results. The governments of democracies as a whole prioritize generating wealth over the environment, because it translates into votes.
Blue Frontier: Disrupting Air Conditioning
- APRIL 2025
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- Teaching Material
Teaching Note for HBS Case No. 325-088.
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