Assessment & Remediation 

Assessments

Our practice is to only approve a new supplier if they meet the requirements of our new vendor approval process, which evaluates suppliers from a labor, environmental, sourcing, quality, and production perspective at the facility level.

Pre-Production Assessment

Before beginning a relationship with lululemon, suppliers are required to sign a Certificate of Acknowledgement and Agreement, certifying they understand and will conform with VCoE requirements. Our VCoE requires all subcontractors be approved by lululemon.

Assessment Activities

lululemon or its designees regularly assess Tier 1 and Tier 2^{11 Tier 1: Supplier facilities that manufacture and provide final products. Tier 2: Supplier facilities that produce and finish materials for Tier 1 suppliers.} supplier facilities^{22 Excluding trims, packaging, and footwear raw materials facilities, which are re-assessed based on risk.} against the requirements of our VCoE and Benchmarks. We aim to assess these facilities every 12 months and may conduct ad hoc assessments based on identified risks. We may conduct follow-up assessments to verify remediation of identified non-compliance or grievances. Assessments are conducted by our Responsible Supply Chain (RSC) team, approved third-party assessors or the Fair Labor Association. Assessments are carried out on site and include visual inspections, documentation reviews, and interviews with management and workers. Worker representatives are also interviewed where available. If we believe an assessment indicates the potential for severe risks, we conduct heightened due diligence.^{33 Heightened due diligence entails a more detailed analysis of non-compliances and root causes, and may be done in partnership or consultation with external experts.}

Addressing Issues

As part of our due diligence approach, we actively work to mitigate identified risks. We have zero tolerance for lack of transparency, disclosure, and cooperation, including with respect to the following matters: corruption and bribery, forced labor, child labor, minimum wage violations, and unapproved subcontractors. We seek to address and remediate all zero-tolerance issues, in accordance with applicable law and our Vendor Code of Ethics Benchmarks.

Our approach to corrective action focuses on root cause analysis and continuous improvement, with the intention of creating positive and lasting change. If any issues are identified through internal or third-party assessments, we require suppliers to complete Corrective and Preventative Action Plans (CAPAs). Our RSC team reviews and approves the CAPAs and, where appropriate, offers guidance on effective solutions. The RSC team verifies CAPA implementation through on-site assessments or desktop reviews.

In instances where risks cannot be sufficiently addressed through CAPAs, we offer support through additional measures, ranging from technical training and awareness raising to more complex action plans or engagement of external experts. Our objective is to work with suppliers to resolve issues. However, we maintain the right to terminate supplier relationships in cases of severe or persistent non-compliance.

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