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Lululemon’s sustainability messaging masks skyrocketing emissions, fossil fuel reliance and pollution in its supply chain, according to a new report by environmental campaign group Action Speaks Louder (ASL). This discrepancy found in the report will be used as evidence for a greenwashing case Lululemon is facing in Canada — which could set a precedent for similar cases globally.
The brand touts its ‘Be Planet’ pillar with a sweeping statement: “Our products and actions avoid environmental harm and contribute to restoring a healthy planet.” Among its focus areas are innovating sustainable materials, implementing strategies to invest in the transition to renewable energy, reducing freshwater use and making waste obsolete. Yet its carbon footprint is growing, water pollution is increasing and production volumes are spiking without a clear strategy for managing clothes at the end-of-life stage. In February, the environmental group Stand.earth filed a complaint to the Competition Bureau Canada arguing the company misled customers about its environmental impact. The report being released today will be submitted as further evidence for investigators.
“This case could set a precedent, demonstrating that the era of unchecked environmental claims is over. Companies will need to align their marketing with their actual practices or face legal and reputational risks,” says Muchaneta Ten Napel, founder of Shape Innovate, a fashion policy catalyst organisation.
Lululemon is not the only brand to face legal or regulatory complaints over concerns about greenwashing. H&M has come under regulatory scrutiny of its sustainability claims in several countries, alongside brands including Norrøna and Decathlon. Last month, following a 20-month investigation into green claims made by Asos, Boohoo and George at Asda, the UK secured commitments from the brands to only use accurate and clear claims about the sustainability of their products.
With the regulatory backlash against greenwashing centred mainly in Europe, the case against Lululemon in Canada reflects not only growing momentum around the issue but a wider reach into markets beyond Europe. The report focuses on Lululemon because of the brand’s rapid growth, along with its attempt to make the move over from sportswear to fashion — and while many brands demonstrate a gap between their sustainability pledges and their actions, Stand.earth and ASL also chose to target Lululemon because the brand has positioned itself as a leader on sustainability when the reality, according to the organisations, is that they are stagnant or backsliding on their environmental and social footprint.
ASL has been campaigning for two years to compel the sportswear brand to phase out fossil fuels and implement renewable energy strategies into its supply chain, though fashion campaign manager Ruth MacGilp says it has yet to see any results. Lululemon’s 2022 carbon footprint totalled 1.2 million tonnes of CO2e, an increase of nearly 65 per cent since 2020. It plans to generate $12.5 billion in revenue by 2026, double its 2021 figure, and ASL warns that without a strategic overhaul in its supply chain the brand’s emissions will spiral further.
“We have international recommendations to triple renewable energy capacity and halve emissions by 2030 globally, and a brand of Lululemon’s size has an obligation to contribute to that,” says MacGilp.
Vogue Business reached out to Lululemon with ASL’s findings. In a statement, the company said, “Like other brands, we recognise that the majority of impact comes from emissions within the broader supply chain. In 2022, we realised a 7 per cent intensity reduction in our scope 3 greenhouse emissions and are working to accelerate this progress with a sense of urgency.” The brand said it is committed to working with “suppliers, industry partners, civil society and policy makers, including the UN Fashion Charter for Climate Action and the Apparel Impact Institute led Fashion Climate Fund, to accelerate collective climate action.”
A supply chain left to falter
Nearly all — 99.7 per cent — of Lululemon’s emissions occur in Scope 3, which is the parts of a supply chain not controlled or owned by a brand directly, with manufacturing representing the largest single source. ASL investigated Lululemon’s 27 Tier 2 suppliers, located across China, Taiwan, Vietnam, Indonesia, Japan, South Korea and Sri Lanka.
Research conducted between September 2023 and February 2024 shows that suppliers are missing crucial climate targets, the report posits. Of the 13 that have set emissions reduction targets, 11 have increased emissions, made limited progress in reducing them, or do not provide sufficient evidence about progress. Two suppliers with goals to reduce emissions by 50 per cent by 2030 increased emissions by 7.9 per cent and 21 per cent respectively between 2021 and 2022.
“There is significant room for improvement, but the point we’re trying to make is that it is Lululemon’s responsibility — alongside other brands — to suppliers in improving their environmental performance. If these factories didn’t have these major customers, then these operations wouldn’t be at the scale they are,” says MacGilp.
The brand says it has carried out feasibility studies for renewable energy and is committed to eliminating any on-site use of coal by joining a coal phase-out working group led by the Apparel Impact Institute and Reset Carbon in 2021 and by participating in the UN Fashion Industry Charter for Climate Action’s coal phase-out group, which is focused on a 2030 goal. But ASL says its research suggests the company is not on track to achieve that goal. At one supplier (named in the report as Company C), the energy mix is 58 per cent coal, while another, Company A, increased its coal consumption by 9.7 per cent between 2021 and 2022. Coal is used as an energy source for at least five of Lululemon’s Tier 2 suppliers, the report states, and fossil fuels feature in the energy mix of all 27.
“We haven’t seen a mobilisation of resources. If you look at an example such as Puma, they report a lot of details about how they’re helping suppliers transition to renewables, and they have interim renewable energy targets for the supply chain. [Lululemon are] lagging behind their sportswear and fashion peers,” says MacGilp.
Misplaced efforts, misplaced details
Lululemon’s strategy for renewable energy in its supply chain was graded “shallow”, in NewClimate Institute’s (NCI) January 2024 report on the nuances of renewable energy procurement. The only area it scored highly in was sourcing 100 per cent renewable electricity for its own operations — representing just 0.3 per cent of its footprint.
“Sourcing renewable electricity for stores and offices… doesn’t make any significant difference to decarbonising the sector,” says Thomas Day, climate policy expert at NewClimate Institute. “If companies like Lululemon are serious about decarbonising the fashion industry and their product lines, then this means decarbonising the use of energy in the manufacturing process is the key issue to focus on.”
While Lululemon has a goal to reduce carbon emissions across its global supply chain by 60 per cent per unit of value added by 2030 against a 2018 baseline, the report says that its emissions will increase as its business grows.
ASL acknowledges Lululemon’s commitments, but says specific details are sorely lacking, echoing the reasoning behind NCI’s grading. It’s not clear how the company engages with its suppliers, whether it incentivises energy transitions, or provides technical or financial support to enable them — all efforts that fashion brands are facing increased pressure to engage in, because they depend on suppliers to meet their sustainability goals but suppliers can’t afford to help them do so without support. The technical or financial support could take multiple forms such as providing access to finance by issuing green bonds linked to climate targets or putting weight behind policy advocacy in manufacturing countries to remove political obstacles.
Promises versus actions
ASL says it chose to focus its campaign on Lululemon because of what it says is a contradiction between the brand’s sustainability claims and the reality of its operations. Under its ‘Be Planet’ pillar, Lululemon says, “We’re committed to making products that are better in every way — for people and the planet.” Yet interviews with communities local to the factories in question, alongside observations by researchers, paint a picture of polluted waterways and dark smoke billowing from chimneys, according to the report.
The Stand.earth complaint filed with Competition Bureau Canada claims the manufacture, transport and use of Lululemon’s products create significant environmental harm, spotlighting an increased use of air freight, a doubling of emissions since it launched ‘Be Planet’ in its 2020 Impact Agenda, and its use of manufacturers in countries with significant fossil fuel reliance. The report could have significant ramifications for the global industry and the claims it’s allowed to make about its sustainability efforts and progress.
Though the complaint is in Canada, there are many regulations that Lululemon risks triggering, including the EU’s new Green Deal, the Circular Economy Action Plan and the amendments to the UK’s Green Claims Code, according to Shape Innovate’s Ten Napel. “The allegations against Lululemon could act as a litmus test for the effectiveness of these new regulations. If the claims are substantiated, it could lead to significant repercussions for Lululemon,” says Ten Napel. “There are two courts: the ones in the EU, the UK and the US, and then there’s the court of public opinion. I think both can destroy you.”
But this shouldn’t be taken as permission to drop suppliers. “The fast fashion model is built around jumping from place to place to find the lowest costs,” MacGilp says. That wouldn’t solve the problem, she explains, because it offers an opportunity to frame the move as a reaction to a scandal at the hands of a few bad apples, perpetuating fashion’s well-versed supplier blame game rather than acknowledging it’s a systemic issue that needs an industry-wide, supply chain-wide overhaul.
Rather, ASL’s recommendations centre around the parcelling up of supplier engagement in a time-bound, public-facing absolute reductions target. They include working with suppliers to target the biggest sources of emissions, financially and technically facilitating access to cleaner alternatives, and working hand in hand with brands who share suppliers to spread the costs of decarbonisation.
“We’re witnessing a global clampdown on greenwashing. It’s comply or die,” says Ten Napel.
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