After an investor meeting this week that celebrated further financial growth, Lululemon continues to battle existential questions about leadership, poor product performance, and a proxy fight led by controversial founder Chip Wilson.
New board members and CEOs may come and go, but there’s a deeper crisis than corporate musical chairs can fix: Lululemon still doesn’t have a credible plan to clean up its fossil-heavy energy supply. As fossil fuel dependence is costing countries billions, Lululemon’s lack of renewable energy investment has become the clearest leadership competency gap.
Wilson has warned against “chasing revenue at the expense of the brand value customers have built their loyalty around” and that Lululemon must “recommit to its north star, the original muse – a woman who inspires culture, not just follows it.” He’s right about the risk, but not the root cause. Lululemon didn’t become such a powerhouse just by selling leggings to trendy yogis.
It sold a vision of health, mindfulness, and community, and even care for the planet. In fact, Lululemon’s original brand manifesto, written in 2008, said: “What we do to the Earth, we do to ourselves.”
The Business Case for Climate Action
Today, the yoga community is increasingly alarmed that the brand’s supply chain runs on toxic fossil fuels, with thousands of yoga practitioners calling for Lululemon to re-align with yogic principles of non-harming, truth and integrity.
Lululemon’s core customers are disproportionately young, affluent, and climate-aware. They bring reusable bottles to class, and shop with their decade-old iconic Lululemon tote bag. And they expect Lululemon to reflect the values they practice both on and off the mat.
Yet most of the ever-increasing emissions tied to Lululemon’s products come from factories powered by burning fossil fuels, especially in energy-intensive textile processing. These processes are linked not only to carbon emissions but to air pollution that threatens the health of workers and communities.
Despite years of promises, progress has been cautious and incremental at best, and Lululemon has lagged behind competitors in decarbonizing its supply chain with proven, commercially available solutions like electrification and renewable energy. These solutions also lower energy bills, increase energy security in volatile geopolitical times, and even reduce extreme heat conditions which workers experience on the factory floor.
The Apparel Impact Institute’s recent report on the Cost of Inaction makes the stakes clear: fashion companies that delay decarbonization will increasingly face rising costs and diminished value from factors like carbon pricing, supply disruptions, raw material risks and energy price volatility. In other words, doing nothing is about to get much more expensive than the cost of a heat pump or two.
Fossil Fuels are a Business Risk, not just an Environmental One
The past few months have delivered a brutal lesson for countries dependent on fossil fuel imports, and businesses like Lululemon that depend on manufacturing in countries dependent on fuel imports such as Vietnam, have inherited those risks. For example, garment factories in Bangladesh are already experiencing an “energy crisis“, as gas supply and even backup diesel generators run empty.
By contrast, countries doubling down on renewables – like Pakistan – have been more insulated against fossil fuel price shocks. Companies that have been investing early in solar and wind energy have also insured greater long-term stability and resilience. For example, H&M has noted that recent efforts to shift energy use towards renewable sources have helped reduce exposure to fossil fuel volatility. In fact, a new white paper from H&M Group and EY highlights how smart investment strategies for supplier electrification combined with renewables can lock in predictable energy costs while reducing exposure to future regulation.Chip Wilson has argued that Lululemon’s board needs more creative expertise. But if those seats were occupied by people with real climate, energy, and supply chain expertise, the brand’s continued delay in implementing a credible climate transition strategy would be laid bare. The same applies for Lululemon’s incoming new CEO – without a brave climate leader, sustainability teams will continue struggling for crumbs of budget to implement pragmatic solutions.
A board and executive team fluent in climate risks would be asking questions like:
- Is our current energy policy resilient to fossil fuel price volatility? Are we investing enough in renewables and electrification to cushion our supply chain?
- Are our climate targets truly aligned with climate science and are they backed up by the resources needed to achieve them?
- Does our lack of transparency on climate create reputational risks that could undermine our core proposition?
- How can we help our suppliers overcome barriers to decarbonisation, and what financial tools can we develop to speed up fossil fuel phaseout?
- How exposed is the company to future carbon taxes and tariffs, and how can we build resilience for supply chain climate shocks?
Stop Chasing Growth that Undermines the Brand
We know that growth at any cost is dangerous for people and the planet, but the additional cost in Lululemon’s case is credibility. Without trust in Lululemon’s core vision (“we create transformative products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all”), the brand’s premium positioning is lost.
There is no denying that decarbonization requires upfront capital, but so does every other transformation companies must undertake to stay competitive. The good news is that climate action pays dividends, from resilience to fossil fuels shocks and lower energy costs, to regulatory preparation, resistance to activist campaigns, and stronger customer loyalty. Meanwhile, delay only compounds risk.
This moment of upheaval for Lululemon creates a rare opportunity to truly future-proof the company by investing in climate mitigation and adaptation at scale. Anything less is akin to rearranging deck chairs while the energy system shifts beneath them.
Will Lululemon’s new leadership confront the reality that climate risk is business risk? Or continue to peg future financial success on a shallow definition of wellness?
