Competition Bureau investigating Lululemon over greenwashing allegations

Canada's Competition Bureau has opened a formal investigation into Lululemon's environmental claims in its marketing campaigns, a spokesperson for the agency told CBC News on Monday.

Marianne Blondin confirmed in an email that the Competition Bureau "has commenced an investigation under the Competition Act into the alleged deceptive marketing practices."

"There is no conclusion of wrongdoing at this time," she wrote. "As the Bureau is obligated by law to conduct its work confidentially, I cannot provide further details on this case at this time."

Stand.earth, the non-profit that filed the complaint against the B.C. athleisure giant accusing it of greenwashing, had announced the investigation earlier on Monday.

The complaint, which the non-profit said was filed in February, says Lululemon's Be Planet sustainability campaign from 2020 — in which the company said it would work to reduce its greenhouse gas emissions — is contradicted by a 2022 impact report that outlined Lululemon's progress in reaching its climate goals.

The impact report shows the company's Scope 3 greenhouse gas emissions — indirect emissions that occur as a result of a company's activities, including those produced by customers using its products— increased from about 471,100 tonnes in 2020 to 847,400 tonnes in 2022. Lululemon wrote in its report that this area "needs acceleration."

The company also wrote in 2020 that it "leaned into investments and partnerships to develop sustainable materials that demonstrate our leadership in product innovation and environmental harm reduction." 

A spokesperson for Lululemon said the company is aware of the "review" by the Competition Bureau and that it is "committed to co-operating on any next steps."

"We are confident that its review will confirm that the representations we make to the public are accurate and well-supported," the spokesperson said in the statement to CBC News on Monday. 

Last year, Lululemon partnered with a startup to create clothes from recycled nylon and polyester. But the report from Stand.earth says many of the company's products continue to be made with polyester or nylon, both of which are materials manufactured from fossil fuels.

"We would like to create a win-win solution with Lululemon to see them really target and eliminate the climate pollution in their supply chain," Todd Paglia, executive director of Stand.earth, told CBC News.

"If they did, we would drop our Competition Bureau complaint. This is about results, not about trying to punish Lululemon."

Under Section 9 of the Competition Act, any six Canadian residents who believe that a company is violating the act can apply to the bureau commissioner to launch an investigation.

Paglia previously called out Lululemon for greenwashing, a term used to describe when companies, governments or individuals mislead others on their environmental practice or environmental benefits.