Big fashion companies have a long list of shortcomings when it comes to their climate impacts. From weak emissions reduction targets and a lack of investment in renewables to relying on carbon offsetting, insetting and renewable energy certificates, it’s easy to spot the problems with corporate sustainability strategies. But it’s not all bad news. By implementing clear, credible commitments and investing in commercially available solutions for fossil fuel-free supply chains, brands can create a pathway towards deep decarbonisation.

Throughout our campaign targeting Canadian activewear brand Lululemon, we have shared practical, evidence-based solutions with the brand that would enable them to speed up the transition to 100% renewable energy in their supply chain. Here, we’ll explore some of those ideas in more detail.

1. Make a public commitment

The first step to any decarbonisation plan should start with a commitment to action by setting specific, measurable and time-bound targets that are grounded in climate science, such as 100% renewable energy in the supply chain by 2030, and a 50% reduction in absolute emissions from scope 3 by 2030. The commitments should be public-facing, for example published on the brands’ website and CSR reports, not just agreed internally. This is because it sends a strong signal to the sector that change is coming, including customers, shareholders, suppliers, industry associations and competitors, as well as those who can help enable this change to happen, such as energy suppliers and local governments.

Of course, targets alone are not enough without a credible strategy to accompany them, which includes interim goals along a realistic timeline, and clear commitments to financial investment to resource their level of ambition within the supply chain. Successful target-setting requires transparency and accuracy so that climate commitments can be scrutinised and held to account, such as reporting on scope 3 emissions using location-based accounting (emissions from energy consumed) rather than market-based accounting (emissions from energy purchased). As our campaign manager Ruth MacGilp expressed in her viewpoint for the Fashion Transparency Index: “Climate targets are not just something to splash on an impact report while farms, factories and mills are left to pick up the pieces….We need transparency on the actions taken to reach targets and robust accountability mechanisms for false sustainability claims.”

When it comes to renewable energy in their supply chain and a significant reduction in absolute emissions, Lululemon has not yet made a public commitment. 

Even if there are some indications of work towards decarbonisation happening behind the scenes, Lululemon’s progress will not accelerate fast enough until they have at least publicly stated their pledge. If nothing is disclosed publicly about what they’re aiming for or how they plan to get there, we have to assume nothing is being done, and therefore Lululemon loses the trust of customers and broader civil society for failing to meet the climate challenge.

One area where bold commitments are being made is in the realm of ‘sustainable materials’, but we don’t see this same level of ambition for cleaning up the supply chain energy mix, where the majority of emissions can be attributed. For example, Lululemon has publicly committed to ‘make 100 percent of our products with sustainable materials by 2030’, which includes an interim target to ‘achieve at least 75 percent sustainable materials for our products by 2025.’ 

However, according to Changing Markets’ Synthetics Anonymous report, 62% of the materials Lululemon currently uses in its products are fossil-fuel based fabrics like polyester.

This suggests that Lululemon has a long way to go to achieve their sustainable materials target, but they are showing early signs of progress, for example by investing in plant-based nylon. This investment has clearly been driven by a public commitment that motivates action internally in the business and invites collaboration across the sector. A public commitment has the power to catalyse a plan in motion and the allocation of resources. 

2. Provide real support for suppliers

The fatal flaw for the fashion industry’s climate action so far has been a lack of recognition of where the majority of climate impacts are produced, and most intensely felt: within the supply chain. This is why brands must match their sustainability goals with a Supplier Clean Energy Programme in order to help their suppliers transition to renewable energy. 

This programme must include a financial commitment — for example, we would like to see Lululemon invest in a Supplier Clean Energy Fund with at least 1.5% of their revenue (equivalent to roughly $121.5 million USD in 2022). It may sound like a lot, but there are large upfront costs involved in, for example, decommissioning coal-fired boilers and installing onsite solar panels. The good news is that there is a return on investment for brands, who not only enable their suppliers to help meet sustainability targets, therefore attracting ESG investment, but also receive payback on those initial costs over time with improved energy efficiency, reduced energy demand and waste, and the freedom from fluctuating fossil fuel prices.

In addition to financial support through the Supplier Clean Energy Fund, Lululemon must also provide technical assistance to suppliers, tailored by country. 

This may include training staff on new processes and equipment, and providing assistance in brokering shared investment in wind and solar projects which suppliers can benefit from. As part of this, Lululemon should develop a Supplier Clean Energy Procurement Policy that requires suppliers to purchase the highest quality renewable energy available. This will be local and additional wind and solar power, rather than relying on Renewable Energy Certificates, carbon offsetting or false solutions like biomass.  

Overall, purchasing practices must create an enabling environment for this programme to roll out across complex global supply chains. Many fashion brands engage in irresponsible purchasing practices, which include short term contracts, last minute changes and cancellations, short lead times, high-pressure price reductions and withholding of payments. This uneven distribution of power creates a barrier to successful decarbonisation, because in order to invest the time, money and resources necessary to transition away from fossil fuels, suppliers must be able to trust that their buyers will not abandon them and threaten the job security of their employees, and they must be assured that their efforts will attract and retain customers beyond simply meeting the specific targets of any individual brand.

3. Push for a green energy grid

The political landscapes of sourcing countries can be challenging for brands that want to invest in renewable energy, often due to the influence of the state over the national grid which favours the interests of fossil fuel companies. However, in all of the countries where Lululemon sources its products, onsite Power Purchase Agreements (PPAs) are available. This means that in their tier 1 and tier 2 factories in places like Vietnam, China, Sri Lanka, Cambodia and Indonesia, Lululemon could start the work of installing rooftop solar panels immediately. What’s more, in markets where Corporate Power Purchase Agreements (CPPAs) are available, such as Taiwan and South Korea, the brand can work with local authorities to procure energy from offsite wind and solar power, creating local and additional renewable energy capacity.

Where CPPAs are not available, Lululemon should engage in lobbying activities that advocate for corporate investment in renewable energy. 

Lululemon could start by developing a Climate Policy Engagement Programme with specific goals and mechanisms for each main sourcing country, again with a focus on enabling quality wind and solar energy. As part of this, Lululemon must provide detailed reporting on its climate policy engagement, which should include advocacy activities by country, both by Lululemon individually and as part of industry associations or groups of multiple brands. 

There are good examples of this type of advocacy from fashion brands, such as a letter to the Vietnamese government urging the country to introduce direct power purchase agreements, and a letter to the Cambodian government expressing concern about its plans to increase coal power generation. These efforts are impactful because global fashion brands have a significant financial influence in the countries they source from, such as in Bangladesh where apparel makes up 80% of all export earnings. When a government’s lack of progress on climate gets noticed by major corporations, this threatens their position as a leading sourcing country, and therefore their economic growth. 

4. Invest in low-carbon technology

More than half of the fashion industry’s supply chain emissions come from Tier 2, which is the stage at which materials are processed, including washing, dyeing and finishing. The reason for this is that material processing at scale requires large quantities of hot water to produce steam, and traditionally this is heated by burning a fuel feedstock, such as coal. 

In order to tackle this problem, many factories are switching from burning coal to burning biomass, which describes bio-based feedstocks such as wood pellets and rice husks. However, we do not believe that this is a credible climate solution for Lululemon, because there is little evidence that biomass can be sustainably sourced at scale without threatening biodiversity. Above all, biomass still requires combustion, which produces harmful air pollution that may be toxic to the health of workers and local communities, and still generates carbon emissions despite claims that these are offset by trees or crops re-growing, therefore biomass cannot be considered ‘renewable’

The alternative to combustion-based boilers is, naturally, electrification.

You can think about it in a similar way to the benefits of an electric stove vs. a gas stove. Of course, even with an electric boiler, the electricity supplying the factory may still be coming from a coal-powered national grid. But electrifying factories is the best way to future-proof for a net-zero future, while the climate policy engagement programme mentioned above comes in to fill the gap. What’s more, there are numerous technologies — such as onsite heat pumps — which can significantly reduce emissions. 

In addition, Lululemon can start working with new technology that reduces or even removes the need for these heating systems altogether. 

For example, several innovators as part of the D(r)ye Factory of the Future programme have developed dry processing technologies such as plasma and laser treatments, spray dyeing, supercritical carbon dioxide and foam dyeing. According to Fashion For Good, if these technologies were scaled up with the help of investment from fashion brands like Lululemon, dry processing has the potential to abate up to 26% of the industry’s greenhouse gas emissions.

Lululemon has the opportunity to lead fashion’s green transition

We believe that Lululemon’s influence as one of the largest sportswear brands in the world means that if it shifts to 100% renewables, it will accelerate demand for clean energy worldwide, and help develop the policy and finance solutions needed to support meaningful, systemic change towards a climate positive future. 

You can help us ask Lululemon to take action for people and the planet – join our campaign!

Thursday, 3rd August 2023
Sydney, Australia

100+ professional athletes call for climate action from Lululemon

World-renowned athletes unite in a letter to sportswear brand Lululemon demanding a strong commitment to renewable energy to put a stop to rising greenhouse gas emissions

• EcoAthletes, an advocacy organisation representing 129 professional athletes including Lululemon ambassadors, has signed an open letter to Canadian activewear retailer Lululemon asking them to phase out fossil fuels and commit to 100% wind and solar in their supply chain by 2030. The letter has been delivered to Lululemon CEO Calvin McDonald with the expectation of a response in the coming weeks. 
• These athletes join more than 7,000 yoga students and teachers from around the world who are actively urging the brand, which aligns itself closely with the yoga community, to take meaningful climate action. 
• As Lululemon expands its audience beyond yoga and towards running, hiking, surfing, skiing and other outdoor sports and activities, the momentum of the campaign is building, led by environmental non-profit organisations Action Speaks Louder and Stand.earth.

Climate change is threatening the future of sport. From surfers concerned about rising sea levels and warming oceans to winter sports battling with the loss of snow and ice cover, it is clear that our ability to enjoy the outdoors for sports and recreation will be increasingly challenged by the impacts of the climate crisis. At this year’s Tour de France, cyclists were forced to wear ‘ice vests’ to survive the heatwave in Southern Europe, and organisers are considering rescheduling the competition to cooler months.

Meanwhile, the clothing and shoes that athletes wear has a significant contribution to this problem. The fashion industry is responsible for around 2% of global greenhouse gas emissions while the carbon footprint of sportswear giant Lululemon – the official apparel supplier of Team Canada for the Olympics – increased by a massive 60% in the past year alone. The majority of these emissions are produced at the manufacturing stage, which is why we need major brands to take bold steps to decarbonise their supply chains.

“Athletes are legendary for summoning the will to overcome huge obstacles, but they’ve never faced a tougher opponent than climate change. We support this campaign because the sportswear industry must step up to meet the challenge of reducing their emissions and investing in clean, green energy, and this includes Lululemon.” 

– Lewis Blaustein, Founder and CEO, EcoAthletes.

In spite of this urgent need for change, Lululemon has only made a commitment to renewable energy in their own operations — their stores, offices and warehouses — ignoring the outsized impact of their supply chain. Most of their suppliers are still heavily dependent on fossil fuels such as coal, with only 2% powered by renewable energy. What’s more, Lululemon has only committed to a 60% intensity-based reduction of greenhouse gas emissions in their supply chain by 2030. This means that as the brand continues to grow, emissions are likely to soar well past a 1.5ºC aligned pathway.

This letter, supported by 129 athletes committed to a positive future for the planet, urges Lululemon to make a public commitment to sourcing 100% renewable energy — wind and solar — in its supply chain by 2030. As part of this, lululemon must phase out dangerous fossil fuels from its supply chain and support its suppliers to transition to clean energy sources in order to avoid the most catastrophic consequences of climate change.

“We hope that Calvin McDonald listens to these passionate climate advocates. They represent a growing chorus of athletes who want the brand to align its values of sustainability, wellness and community with its environmental practices hidden within the supply chain. Lululemon has the opportunity now to be a leader in pushing for a green transition across the fashion industry.”
– Ruth MacGilp, Fashion Campaign Manager at Action Speaks Louder.

Lululemon’s powerful market influence means that if it shifts to 100% renewable energy in its supply chain, it will help create demand for renewable energy and develop the policy and finance solutions needed to support a meaningful, systemic change. 

Find out more about the lululemon campaign: https://speakslouder.org/lululemon/ 

For further information and interview requests, please contact: ruth@speakslouder.org

—

Dear Calvin McDonald, CEO of lululemon athletica inc.

We are coming together as 129 professional athletes, represented by EcoAthletes and supported by Action Speaks Louder.

As athletes and advocates for meaningful climate action, we are writing to ask lululemon to make a public commitment to source 100% renewable wind and solar power across its supply chain by 2030.

Currently, lululemon’s climate targets are too weak to meaningfully reduce its rapidly increasing greenhouse gas emissions. In the last year alone, lululemon’s scope 3 emissions actually increased, by a whopping 60%. As the business grows, a continued dependence on fossil fuels is simply not an option if lululemon wants to stop contributing to dangerous climate change which threatens people and the planet.

Over the past 12 months, over 7,000 yoga students and teachers, including current and former lululemon ambassadors, have been calling on lululemon to demonstrate the values it claims to hold and take urgent and meaningful climate action. Now, athletes in a myriad of sports are joining them to ask lululemon to phase out dangerous fossil fuels and source 100% wind and solar energy in the supply chain. 

The future of all our sports depends upon a safe, healthy environment, from the mountains to the sea. But this is threatened by the growing impacts of climate change, which are driven by emissions-intensive companies like lululemon. 

lululemon is a leader in creating products that help us to perform at our best. We are calling on lululemon to play forward and become the leader on climate action that our sports and communities need. 

Signed,

Full list of athletes

The clothing and textiles that we make, buy, wear, care for and dispose of are contributors to a wide variety of environmental issues that impact climate change, many of which intersect with one another. 

To name a few: both natural and synthetic fabrics cause microfibre pollution in the ocean. The production of leather and viscose lead to deforestation. Dyeing and processing materials release toxic chemical pollution into rivers. Waste from the export of used clothing clogs landfills around the world. The list could go on.

Against this backdrop, fashion brands are making more noise than ever about contributing to the solutions of these problems. In 2022, 46% of major brands published a sustainable materials strategy and one in five brands invested in circular solutions like resale, repair and rental. Meanwhile, 101 brands, retailers and suppliers have signed the UNFCCC Fashion Industry Charter for Climate Action, which commits them to reach net zero emissions by 2050.

Behind these efforts towards ‘sustainability’ and ‘circularity’, however, is a bleak fact: we need to limit global warming to just 1.5ºC if we want to avoid the most devastating effects of climate change. And an even bleaker fact: the fashion industry needs to reduce its greenhouse gas (GHG) emissions by at least 45% in order to make real progress towards this goal — and it’s currently well behind schedule. 

So why is the fashion industry struggling to reduce its emissions? And what can brands do to help drive meaningful change forward? 

The problem

The majority of fashion’s emissions are produced in its supply chain by fossil fuel-powered factories

The fashion supply chain is complex, messy and opaque. In order to reduce emissions across the whole supply chain at the scale that we need in order to combat the climate crisis, we need to transform the entire energy system behind our clothing and textiles. 

This will be a huge challenge. Here’s why. 

The fashion supply chain is opaque and fragmented

Almost no piece of clothing or footwear is ever made at a single facility or even a single country. The fashion supply chain is truly global, and it’s extremely fragmented. Production is broken down into different stages, called ‘tiers’, with each tier being carried out at a different facility, in a different country around the world. A single dress will have travelled the world, stopping at different factories, farms, mills, laundries and warehouses long before you buy and wear it.

The 4 tiers of the fashion supply chain are:

The 4 Tiers of the Fashion Supply Chain

• Tier 4: Raw material cultivation and extraction. Eg. cotton farming. 
• Tier 3: Material processing. Eg. spinning and weaving yarn into fabric.
• Tier 2: Material production. Eg. dyeing and finishing fabric.
• Tier 1: Product assembly. Eg. cutting and sewing clothing.

Most fashion brands do not own and operate factories, but instead source from international and local suppliers which specialise in a specific tier of manufacturing. A significant proportion of fashion and textile manufacturing is based in China, South Asia and Eastern and Southern Europe. 

Brands work with many different facilities to meet their demands for mass production. For example, H&M alone sources from over 2,800 suppliers.

Fossil fuels rule fashion manufacturing

The majority of emissions in the fashion industry come from the supply chain, with an estimated 52% just from Tier 2: material production. 

Percentage of Greenhouse Gas Emissions Per Tier

Sometimes, machinery at these facilities is powered by electricity rather than direct combustion of coal. However, in countries that have unreliable access to renewable energy, production will still need to rely on fossil fuels which power the electricity grid. 

Brands’ climate commitments contain loopholes

Although brands do not directly control their suppliers, the emissions produced in the factories, farms and mills they source from are still measured by brands. These are called ‘scope 3’ emissions, which refer to ‘indirect’ emissions that do not come from their owned and operated facilities, or from electricity that they have purchased. Major fashion brands hold an outsized economic influence over their suppliers, and therefore it is their responsibility to provide support for those suppliers to decarbonise.

And yet, meaningfully reducing GHG emissions across their entire supply chain tends to be low on brands’ list of climate targets. Although more brands than ever are engaged in various initiatives to reduce their impact on the environment, and some of them do include commitments to reduce their GHG emissions, such commitments often feature loopholes that brands use to avoid facing the transformational change needed to make significant reductions. These loopholes include:

• Creative accounting
  Brands often claim emissions reductions through carbon offsetting schemes, which do not represent genuine climate action in the supply chain. They are also increasingly switching from burning coal to burning biomass. This relies on the combustion of raw materials such as wood pellets, which is highly polluting and can enable deforestation.
• Renewable energy credits
  Brands often purchase unreliable Renewable Energy Credits (RECs) rather than directly procuring their own renewable electricity, for example with onsite solar panels or power purchase agreements (PPAs). Research suggests that RECs do not necessarily drive demand for additional renewable electricity, and therefore do not accurately reflect emissions reductions in the brand’s own supply chain.
• Ignoring scope 3
  Brands promise to reduce emissions in scopes 1 and 2 only, which refer to owned and operated facilities such as offices and retail stores, rather than the supply chain where most emissions are produced. Unless their climate targets cover scope 3, brands are not taking action where it really counts.
• Growing volumes
  Brands set intensity-based, rather than absolute, emissions reduction targets, such as ‘50% emissions reduction per unit of product sold’. This means that emissions can actually increase as the company grows in size, profit and production volumes.
• Avoiding transparency
  Most brands do not invest in full supply chain traceability, which would enable the brand to measure and mitigate emissions at each tier and therefore assess the most effective strategies for decarbonisation.
• Certified greenwashing
  Many brands participate in voluntary certifications and multi-stakeholder platforms that arguably undermine and distract from the major policy shifts needed to slash emissions. 

The solution

Brands must ramp up renewable energy 

Ultimately, to address the emissions problem at source, we need to see fashion brands implementing deep decarbonisation across their supply chain, particularly in tier 2, the material production process. 

According to the UN, renewable energy supply must be doubled globally in order to limit global warming to 1.5 degrees. Much of this will be driven by the actions of big corporations.

So how can brands decarbonise their supply chain?

According to Stand.earth’s Fossil-free Fashion Scorecard, in order to make meaningful change, fashion brands need to be fully transparent on GHG emissions across their entire supply chain. Then, they must commit to reducing these emissions by investing in renewable energy and energy efficiency measures. Because decarbonisation also depends on the sourcing countries’ energy mix, they also need to advocate for climate action at a policy level, including strengthening the renewable energy supply in these countries. 

Stand.earth’s 2023 scorecard reviewed 43 major fashion brands in their climate efforts, and found only five brands have committed to deploying renewable energy across their supply chain, while the majority of brands have yet to show any signs of meaningfully engaging with suppliers to support them to decarbonise.

Fortunately, the technologies already exist for brands to start taking action today. One promising example is the growth of zero-water dyeing and processing systems, which would enable suppliers to eliminate the need for polluting coal-fired boilers. The D(r)ye Factory of the Future project from Fashion For Good provides insight into the significant emissions savings that could be achieved by scaling up these technologies. 

Of course, implementing new technologies will require brands to invest significantly in their suppliers. According to Fashion for Good, there is a $133billion USD funding gap for transitioning from coal combustion to dry processing, but many of these solutions offer an attractive financial return on investment while helping brands to meet their climate targets.

The bottom line: for a truly sustainable fashion industry, we need to accelerate ambition

Beyond individual process improvements from individual brands, the missing piece in a truly sustainable fashion system is the rapid acceleration of renewable energy, which will require the energy landscape of sourcing countries to shift in order to provide reliable, fossil-free electricity to a large number of facilities. Major brands which source from shared regions and even shared facilities are well placed to become powerful advocates for increasing renewable energy supply —but it will require genuine collaboration between fierce competitors.

The challenges involved in decarbonising the fashion supply chain should not be underestimated, but we can no longer wait for weak commitments from brands that fail to meet the urgent action required to limit the most catastrophic impacts of the climate crisis. 

Fashion brands and retailers must commit to a significant absolute reduction of scope 3 carbon emissions by powering their supply chain from 100% renewable energy. If they do, it could eliminate 27% of all GHG emissions associated with the fashion industry. The good news is, momentum for decarbonisation is growing from suppliers, policymakers and customers alike. It’s time for the fashion industry to listen up and take action.

Join our movement to hold fashion accountable for its climate impacts.