LEGO’s owner says its current strategy ‘goes against the logic of a normal business’

19/10/202319/10/2023 Chris Wharfe 8185 Views 1 Comment

The new owner of the LEGO Group says its current sustainability strategy ‘goes against the logic of a normal business’, but the company’s CEO is adamant ‘family ownership can help’.

The LEGO Group has several major sustainability goals on the go at the moment: to make all its packaging sustainable by 2025; to achieve net-zero emissions by 2050; and to find more sustainable materials from which to produce its bricks. The company recently stepped away from recycled bottles after finding they didn’t reduce carbon emissions, but says it’s still ‘fully committed to making LEGO bricks from sustainable materials by 2032’.

To that end, the LEGO Group is tripling its investment in environmental sustainability through 2025, pouring more than £1.16bn into reducing carbon emissions and finding renewable sources of materials for its plastic pieces. It’s a strategy that fourth-generation owner Thomas Kirk Kristiansen is keen to stand behind after taking the reins of the company from his father Kjeld in May this year – despite the costs involved.

“The raw material that we rely so much on is based on the wrong thing. It’s a big thing to change that,” he told the Financial Times. “It has been tough because it goes against the logic of a normal business to push very hard on something that has no return for the next year or years.”

The LEGO Group isn’t quite a ‘normal business’, though. It differs from many global corporations in its ownership structure. There are no shareholders: just the Kirk Kristiansen family. And it’s that self-governance that has allowed the company to weather crises like its flirtation with bankruptcy in the early ‘00s, and more recently the issues brought on by the pandemic.

“It’s harder to consistently build a brand like LEGO if you’re listed,” the company’s CEO Niels B. Christiansen said, adding that maintaining its commitment to its investments has helped the company come out of the other side of coronavirus even stronger. “You saw some major brands during the pandemic, in order to protect the bottom line, overreact on things that actually hurt the brand.”

Christiansen told the Financial Times that ‘family ownership can help’ with initiatives like finding new sustainable materials, because the LEGO Group can ‘take a bigger load than most companies’ to ‘get the ball rolling’. But he stressed that profits are still the long-term goal.

“I don’t want to leave this impression that it’s just easier or nice, it’s probably more that you can stand through the bigger investments a little better,” he added. “And if you do it that way, the return will also be better.”

For his part, Thomas Kirk Kristiansen is also busy ensuring the current ownership structure remains in place for generations to come, noting it’s important the family ‘doesn’t become a liability’ when it comes to the big decisions – whether they’re ‘normal’ or not.

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Author Profile

Chris Wharfe

I like to think of myself as a journalist first, LEGO fan second, but we all know that’s not really the case. Journalism does run through my veins, though, like some kind of weird literary blood – the sort that will no doubt one day lead to a stress-induced heart malfunction. It’s like smoking, only worse. Thankfully, I get to write about LEGO until then.