Lululemon backs renewable energy fund for China supply chain

Lululemon has committed capital to a new renewable energy fund targeting wind and solar development across mainland China, in a move designed to cover the equivalent of its entire supplier electricity footprint in the country by 2030.

The fund is managed by Schroders Capital’s infrastructure team, with Schroders Greencoat – one of the largest dedicated renewable energy infrastructure managers globally – serving as adviser to the strategy. Capital has already been deployed across multiple wind projects currently under construction, with completion expected later this year. Lululemon says participation in the fund will enable the equivalent of 100 percent renewable electricity across its Chinese supplier network, calibrated against projected electricity consumption in 2030.

China is the pressure point for Scope 3 decarbonization

Supply chain decarbonization has become one of the most structurally difficult problems in apparel. Scope 3 emissions – those generated by suppliers rather than the brand itself – typically represent more than 90 percent of a fashion company’s total carbon footprint, and the grids powering major manufacturing hubs in Asia remain heavily coal-dependent.

Pooled investment vehicles like this fund represent an emerging attempt to resolve a classic collective action problem: individual brands lack the scale to drive grid-level change on their own, but their combined procurement demand can underwrite new capacity.

The investment directly advances Lululemon’s science-based target (SBT) to reduce Scope 3 greenhouse gas (GHG) emissions intensity by 60 percent by 2030 against a 2018 baseline: a commitment aligned with the Science Based Targets initiative (SBTi) framework. It also fulfills a prior pledge to achieve 50 percent renewable electricity use across core tier 1 and 2 suppliers by 2030, a target set in part following sustained pressure from environmental advocacy group Stand.earth.

Competition Bureau complaint forced Lululemon to revise green messaging

In 2024, Stand.earth filed a complaint with Canada’s Competition Bureau alleging that Lululemon had misled consumers with environmental claims insufficiently backed by action. During the course of the investigation, the company removed material green messaging from its digital channels, most visibly amending the brand positioning phrase “Be Planet” to simply “Planet.” The Competition Bureau subsequently closed the investigation.

Few apparel brands back supply chain renewables with direct capital

The latest Fossil Free Fashion Scorecard published by Stand.earth identified only six companies, among them H&M, Bestseller, and PVH, as providing any direct financing for supply chain renewable energy projects.

The report put the problem in stark terms: fashion accounts for at least 4 percent of global climate pollution, with manufacturing processes disproportionately dependent on coal and fossil fuels. Lululemon’s fund investment would place it in that same small cohort of brands making financial commitments rather than procurement pledges alone.

The investment adds to existing Lululemon sustainability partnerships with the Apparel Impact Institute, the Asia Clean Energy Coalition (ACEC), and the Clean Energy Buyers Association’s (CEBA) Clean Energy Procurement Academy. Together, these initiatives form part of the company’s Impact Agenda 2030 framework, which spans climate, human impact, and equity commitments across its value chain.