Danish toy manufacturer Lego (Billund; www.lego.com) has announced that it will invest up to USD 400m (DKK 2.54 bn) over three years to accelerate its initiatives for sustainability, social responsibility and circularity by investing in the creation of more sustainable materials and products, achieving zero waste and carbon-neutral operations and developing programs that teach children about sustainability. The planned investments include both costs associated with the development of new sustainable materials and the investment in manufacturing equipment.

One step the company is taking towards these goals is to begin the phase-out of single-use plastic bags used to package loose building bricks in its Lego boxes. Several prototypes made from a range of different materials have been tested as an alternative to current packaging. Starting in 2021, Lego plans to examine recyclable paper bags certified by the Forest Stewardship Council (FSC, Bonn / Germany; www.fsc.org). The move is part of the company’s goal of making all of its packaging sustainable by the end of 2025, said Lego group CEO Niels B. Christiansen.

The investment also advances the company’s “Sustainable Materials Programme”, which aims to make all of its products from sustainable materials by 2030. This includes expanding the use of “bio-bricks” such as those made from sugar cane, which currently account for about 2% of Lego’s element portfolio. It will also continue research into new plastics from renewable and recycled sources and partner with companies developing recycling and bio-based material production technologies.

Lego plans to shift manufacturing operations to carbon neutrality by 2022 by installing additional solar panels on all of its factories and improving energy usage, for example by installing systems that use ambient air in cooling processes during brick production. Improved waste handling and a reduction in water consumption are expected to further minimise the group’s operational impact on the environment. Lego says none of its waste will be diverted to landfills by 2025, while its water use will drop by 10% by 2022-2023.

In August 2020, Lego announced that it had joined the Ellen MacArthur Foundation (EMF, Cowes / UK; www.ellenmacarthurfoundation.org), as part of its commitment toward becoming a more circular enterprise. The toy manufacturer said it will work with the foundation’s network of businesses, experts and policymakers to accelerate the transition to a circular economy by inspiring eco-design across the toy industry, expanding circular services and products offered by Lego, and in October, teaching teenagers about the principles of circular economy by hosting a joint online Lego play event.

The group's strategic investments and sustainability goals are supported by its growth. Lego reported a 7% rise revenue to DKK 15.6 bn (EUR 2.1 bn) in the first half compared to the same period in 2019. Consumer sales grew 14% year-on-year in January-June. Operating profit increased at an annual rate of 11% to DKK 3.9 bn (EUR 523m) during H1 2020. Net profit for the period declined 1% to DKK 2.6 bn (EUR 349m), and free cash flow was strong at DKK 4.1 bn (EUR 550m). Visitors to the company's e-commerce platform doubled to more than 100m the first half of 2020 versus the same timeframe in 2019. Lego said plans to open 120 retail stores in 2020, with 80 of them in China.