Following a complaint by environmental activist group Stand.earth, Canada has initiated an investigation into alleged deceptive marketing practices by lululemon. The application asserts that lululemon may have engaged in greenwashing by overstating climate action as part of its “Be Planet” marketing campaign. While the investigation has been formally launched by Canada’s Competition Bureau, the agency has not made any allegations.
Lululemon athletica inc. is an international apparel company headquartered in Vancouver, British Columbia, Canada. In 2020, amidst growing international pressures regarding sustainability and environmental, social, and governance (ESG) reports, the company released an ESG report titled their 2020 Impact Agenda. This report outlined the company’s intentions to reduce environmental impact through the use of sustainable materials and the mitigation of greenhouse gas emissions.
Subsequently, the company introduced the “Be Planet” marketing campaign, making broad claims about its climate and environmentally friendly initiatives.
In an application dated February 8, six applicants associated with Stand.earth alleged that lululemon had made “direct, unqualified environmental claims that are false or misleading.” The application was prepared and submitted by Harper Grey LLP, a business litigation law firm based in Vancouver.
The application highlights that lululemon’s 2022 Impact Report indicates a 100% increase in climate pollution since 2020, with 60% of materials derived from fossil fuels. Stand.earth notes that while 99% of GHG emissions are not directly from the supplier, they stem from the value chain and end users.
Despite this increase, Stand.earth points out six claims made by lululemon that suggest environmentally friendly actions, labeling them as greenwashing and alleging a violation of consumer protections under Canada’s Competition Act.
The applicants request that the Commissioner take three actions: (1) remove the Be Planet marketing campaign from all platforms; (2) issue a formal apology to Canadian customers for disseminating false and misleading information; and (3) pay a fine of 3% of their annual worldwide gross revenues to a fund for climate mitigation and adaptation in Canada. Lululemon athletica Inc. reported a net revenue of $9.6 billion in 2023.
On April 26, the Competition Bureau informed Stand.earth that an inquiry had been initiated in response to the application. However, the language used suggests that this is a procedural step mandated by law. The letter from the Competition Bureau states that the “Commissioner of Competition has commenced an inquiry (the “Inquiry”) pursuant to paragraph 10(1)(a) of the Competition Act (the “Act”).”
According to the Act, any six Canadian residents over the age of 18 may initiate an inquiry with the Competition Bureau. Once a complaint is lodged, the Act mandates the Commissioner to begin an inquiry.
In essence, the inquiry is a legal obligation and does not imply any finding of wrongdoing. However, it underscores the risks associated with climate-related claims in marketing. The allegation has been made, potentially leading to consumer backlash against lululemon. If Canada finds no violation and opts not to pursue the claims further, there may be limited media coverage, but the accusation of greenwashing could persist.