Lululemon backs China renewable fund to power supplier network

Lululemon has moved its climate strategy deeper into the factory floor, backing a renewable-energy fund in China designed to add new wind and solar capacity for the suppliers that make its clothing. The company says participation in the fund will enable the equivalent of 100% renewable electricity across its supplier network in mainland China by 2030, a sharper move than another round of corporate targets because it reaches into the power system that feeds the mills and sewing lines.

The fund is managed by Schroders Capital’s infrastructure team and focuses on late-stage development and construction projects, the kind of assets that can bring renewable generation online faster than a long-range promise ever could. Lululemon did not disclose the size of its investment, but the structure matters more than the check size: instead of asking suppliers to solve electricity decarbonization alone, the brand is helping finance the infrastructure that lets them buy cleaner power in the first place.

That matters because Lululemon has been blunt about where its emissions sit. The company says most of its greenhouse-gas emissions come from its supply chain, and its Impact Agenda 2030 calls for a 60% reduction in Scope 3 emissions intensity from a 2018 baseline. It also wants 50% renewable electricity across its core Tier 1 and Tier 2 suppliers by 2030. In 2024, supplier renewable electricity was still at 15%, and 35% of Tier 1 and Tier 2 suppliers that had been burning coal on site had already stopped doing so.

The supplier base is not tiny. Lululemon defines core suppliers as Tier 1 and Tier 2 factories that account for more than 75% of production volume, and in 2024 it worked with about 52 Tier 1 suppliers and about 67 Tier 2 suppliers. That is the real test of the model: if a renewable fund can shift electricity use across that network, it can lower operational emissions without Lululemon owning a single factory in China.

The approach also gives other fashion brands a playbook worth copying. China remains one of the industry’s biggest manufacturing bases, which means a shared renewable-finance structure could scale beyond one label if enough buyers commit capital and demand cleaner procurement from the same supplier ecosystem. Stand.earth, which pressed Lululemon over environmental claims in 2024 and filed a complaint with Canada’s Competition Bureau, called the China renewable push a tangible sign of progress after the company pared back green messaging, including changing Be Planet to Planet. For fashion brands under pressure to prove their climate claims, this is the kind of mechanism that reads less like branding and more like leverage.