Climate Action

Why It Matters

Climate change is damaging ecosystems and causing adverse impacts to human health and wellbeing, representing an urgent global challenge.^{1¹ The Intergovernmental Panel on Climate Change, Climate Change 2023 Synthesis Report.} The path ahead to address climate impacts is complex, requiring scalable solutions and collaboration across global supply chains, industry and cross-industry partners, policymakers, and civil society.

What We're Doing

Our approach centers on addressing our impact and supporting collective action for industry-wide change.

Our 2030 Goals

We are working toward our targets by focusing on four key areas: product and material innovation, manufacturing, transportation, and our own operations. We have the following 2030 SBTi^{2² The SBTi develops standards, tools, and guidance that allow companies to set GHG emissions reduction targets. Our 2030 Scope 1, 2, and 3 climate targets were validated by the SBTi in 2020 and re-validated in 2024 alongside our 2050 net-zero target.} validated climate targets:

Scope 1 + 2^{3³ Scope 1 emissions: Direct emissions from our own operations. Scope 2 emissions: Indirect emissions from the generation of energy purchased for use in our own operations. Our goal uses market-based emissions. In alignment with the GHG Protocol Scope 2 Guidance, Scope 2 emissions can be reported based on either of two allocation methods. Location-based emissions reflect the average emissions intensity of grids where energy consumption occurs, while market-based emissions are associated with electricity and contractual instruments that companies have purposefully chosen.}: Maintain 60% absolute reduction in GHG emissions^{4⁴ Absolute reduction in GHG emissions is the reduction in the total amount of GHG emissions emitted into the atmosphere over a specific period, relative to the baseline year.} in our own operations^{5⁵ “Own operations” refers to facilities where lululemon has direct operational control, including company-operated stores, distribution centres, and offices.} from a 2018 baseline^{6⁶ The Science Based Targets initiative (SBTi) has validated our near-term science-based Scope 1 and 2 emissions reduction target. We initially achieved this goal in 2021 and have maintained it since. This goal is measured on a calendar year basis.}
Scope 3^{7⁷ Scope 3 emissions: Indirect upstream and downstream emissions across the lululemon value chain. Our Scope 3 goal includes Category 1 (with the exclusion of "other purchased goods and services," which relate to non-product spend) and Category 4 emissions, as defined by the GHG Protocol. This exceeds the SBTi requirement of including at least two-thirds Scope 3 emissions.}: Achieve 60% intensity reduction in GHG emissions^{8⁸ Intensity reduction in GHG emissions is the reduction in the amount of GHG emissions per unit of activity, output, or any other organization-specific metric over a specific period. We measure emissions intensity as tCO2e per $ million USD of gross profit.} in purchased goods and services, and upstream transportation and distribution (Scope 3) from a 2018 baseline^{9⁹ The SBTi has validated our near-term science-based Scope 3 emissions intensity reduction target. This goal is measured on a calendar year basis.}

We achieved our Scope 1 and 2 target in 2021 and have maintained it since then.

Our 2030 climate roadmap sets out our approach toward maintaining our Scope 1 and 2 target, and meeting our Scope 3 target.

Achieving a 60 percent Scope 3 emissions intensity reduction by 2030 requires ambitious action. Our roadmap considers product and sourcing strategies, growth expectations, and other business factors that may impact our target progress. Implementing our roadmap also requires action beyond our business, including industry-wide change and policy shifts, particularly those that support renewable energy procurement in the countries where our products are manufactured.

We aim to identify and manage risks and uncertainties that may affect our ability to achieve our Scope 3 target. These may include the scale at which we can implement innovations, changes in global policies and carbon accounting standards, and macroeconomic and business factors that could negatively impact gross profit (among other risks). These factors may make progress toward our target more challenging, even as we implement planned actions. We will continue to regularly monitor and publicly report on progress toward our targets in accordance with internationally recognized methodologies.

Beyond 2030, our long-term aim is to achieve net-zero GHG emissions by 2050 from a 2018 baseline. In accordance with the Science Based Targets initiative (SBTi) Net-Zero Standard, our target is a 90 percent reduction in absolute Scope 1, 2, and 3 GHG emissions, with any residual emissions neutralized through the use of carbon removals, in line with the Standard. The SBTi has validated our net-zero target.^{10¹⁰ As stated on the SBTi website, the Net-Zero Standard is a framework for corporate net-zero target setting in line with climate science. Our target boundary includes land-related emissions and removals from bioenergy feedstocks.}

Our approach for our net-zero target focuses on first taking action to meet our near-term 2030 climate targets as we build out a longer-term roadmap. We recognize that achieving net-zero will be challenging and requires innovation within the apparel sector, cross-industry collaboration, and policies that incentivize and scale new technologies. In short, we cannot meet a net-zero ambition on our own. Our long-term strategy will define where we can innovate (e.g., material innovations, textile-to-textile recycling), and where we need to collaborate or advocate for policy support (e.g., accessibility of renewable electricity).

Participation in industry coalitions is important for deploying scalable solutions, particularly within the manufacturing supply chain, where supplier facilities are producing fabric and garments for multiple brands. Since 2020, we have been signatories of the Fashion Industry Charter for Climate Action. lululemon is also a founding member and lead funder of the Apparel Impact Institute (Aii) $250 million Fashion Climate Fund. The Fund is used to identify, fund, scale, and measure solutions to address the industry's supply chain carbon emissions.

Focus Areas

Product and Material Innovation

Materials used in products and packaging can contribute to GHG emissions in multiple ways, including the energy used to obtain and process raw materials. To drive progress, we focus on adopting preferred materials^{11¹¹ We consider materials to be preferred when their production processes have the potential to minimize impacts on areas like climate, nature, or communities, compared to the conventional equivalents, and/or when they align with independent third-party certifications, schemes, or standards. Where applicable, we use the Textile Exchange 2023 definition of preferred materials to guide the continued development of our framework for evaluating materials. We regularly assess the attributes for preferred materials and evolve our definition as needed.} and driving circular innovation, while simultaneously advancing innovations in product function.

Learn more about our approach to circular innovation.

Manufacturing

We do not own any manufacturing facilities in our supply chain, and contract with suppliers that produce for multiple brands. Priority initiatives in manufacturing represent the most significant opportunity toward progressing our Scope 3 target. We focus on engaging with suppliers working to increase energy efficiency and renewable electricity, and eliminate on-site coal. We are also working with industry partners to assess financing models that can help accelerate progress across these areas.

Our Vendor Environmental Manual contains guidelines for our suppliers on energy efficiency, coal phase-out, renewable energy, water efficiency, wastewater, and chemistry. Our supplier engagement efforts focus on supporting and accelerating decarbonization actions among suppliers by communicating requirements; funding or co-funding feasibility studies, training, and technical assistance; and engaging directly with supplier facilities to incentivize and support progress and investments.

Supply chain renewable electricity: Increasing the use of renewable electricity^{12¹² Renewable energy refers to all forms of unlimited, naturally replenished resources such as the sun, tides, and wind, as opposed to non-renewable fossil fuels such as coal and natural gas. Renewable electricity is generated from renewable energy sources, both at the facility level (e.g., on-site rooftop solar arrays) and at the utility scale (e.g., large-scale solar or wind farms).} in our supply chain is a key component of our roadmap toward our Scope 3 science-based target. Where feasible, we work to prioritize higher-impact renewables such as onsite solar and power purchase agreements (PPAs). We recognize that Energy Attribute Certificates^{13¹³ According to GHG Protocol Scope 2 Guidance, an EAC is a category of contractual instrument (a type of contract between two parties for the sale and purchase of energy). EACs represent certain information (or attributes) about the energy generated, but do not represent the energy itself. This includes instruments that may go by several names, including certificates, tags, credits, or other terms. For example, this may include renewable energy certificates (RECs) or electricity contracts (Power Purchase Agreements). Under the GHG Protocol Scope 2 Guidance, contractual instruments such as EACs, including those procured via a virtual power purchase agreement (VPPA), are acceptable methods for reducing market-based Scope 2 GHG emissions. lululemon retires procured EACs on an annual basis.} (EACs) are also necessary in the global transition to clean energy and work to minimize the use of lower-impact EACs where possible.

Access to renewable electricity varies across regions where our suppliers operate, due to barriers such as limited supply, permitting processes, and complex regulations. To help advocate for renewable electricity development, we are members of the Asia Clean Energy Coalition (ACEC), a coalition of renewable energy buyers, in collaboration with sellers and financiers, working to help strategically shift policy in key Asian national and regional markets, and support expansion of and access to renewable electricity. We also provide access to renewable electricity procurement and policy training through external organizations.

Energy efficiency: We continue to work with industry initiatives, such as Aii, to support decarbonization efforts. These initiatives support apparel supply chains in identifying energy efficiency and energy reduction opportunities, conducting carbon benchmarking assessments, setting climate targets, and developing carbon-reduction roadmaps.

On-site coal phase-out: We are committed to phasing out coal from supplier sites. We work with our Tier 1 and Tier 2 suppliers and select subcontractors toward eliminating on-site use of coal, including having them sign acknowledgement letters and establish roadmaps to phase out existing coal boilers by 2030. Where needed, we engage technical experts who work with our suppliers to conduct feasibility studies on manufacturing processes that require high heat. The studies assess potential alternatives to coal, including options such as biomass, natural gas, and electrification.

Transportation

Our transportation initiatives include utilizing lower-carbon transportation modes, engaging with logistics service providers (LSPs), and supporting advancements in alternative lower-carbon fuels.

Transportation modes: The majority of inbound products are shipped using ocean freight. We are working toward reducing the use of air freight, where operationally feasible. We also continue to identify, pilot, and integrate lower-carbon transportation options, including regional trucking and electric vehicles for last-mile delivery.

Logistics service provider (LSP) engagement: As part of our evaluation process for working with inbound LSPs, we consider their environmental practices, including the existence of GHG emissions targets, freight mode solutions, and projects related to the use of alternative fuels. We engage with LSPs on carbon-reduction opportunities and improvements to emissions data quality.

Alternative fuel advancement: We are part of two buyers’ alliances: the Zero Emission Maritime Buyers Alliance (ZEMBA), a buyers’ group working to accelerate scalable and economically viable zero-emission shipping solutions for the maritime sector, and Sustainable Aviation Buyers Alliance (SABA), which is accelerating investment in and adoption of sustainable aviation fuels.

Own Operations

We have two primary strategies for managing Scope 1 and 2 emissions as we grow globally: procuring 100 percent renewable electricity in line with RE100 standards and investing in targeted energy efficiency and electrification. Achievement of our Scope 1 and 2 goal is primarily driven by renewable electricity procurement, including a wind Virtual Power Purchase Agreement (VPPA)^{14¹⁴ A long-term contractual commitment to purchase clean energy from a specific off-site renewables project. A VPPA is key to enabling the project’s development and construction, and adds new renewables to the grid, displacing fossil fuels. lululemon's VPPA is with a wind farm in Texas. Energy Attribute Certificates (EACs) are produced alongside the clean energy and lululemon retires the EACs on an annual basis.} in North America. Our renewable electricity procurement and use also includes on-site solar from one of our distribution centres (DCs)^{15¹⁵ A specialized warehouse that stores and ships the goods a company produces.}, energy attribute certificates (EACs) from accredited tracking agencies, and green premium options from renewable utility providers.

We currently focus our energy management program on our North American stores and DCs; this is where we consume the most energy and we are implementing targeted electrification and energy efficiency measures.