Assignment 1 Instructions

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Concordia University *

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374

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Industrial Engineering

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Dec 6, 2023

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1 © May not be copied or duplicated without the permission of the owner. MANA 374 - Sustainable Management Assignment 1 (Individual) Instructions Overview This assignment provides an opportunity to develop skills related to stakeholder engagement based on a real-world business sustainability issue (described below). Students will: • Conduct research to learn about the business sustainability issue, • Work individually to develop a vision for a stakeholder engagement, identify, map and prioritize stakeholders, and recommend a stakeholder engagement approach. Learning Outcomes Upon completing this assignment, students will be able to: (1) Develop a vision for stakeholder engagement (2) Identify, analyze, map, and prioritize stakeholders (3) Develop a stakeholder engagement plan About the Company and Context Company Overview In 1998, Chip Wilson founded Lululemon Athletica in Vancouver, Canada (Lululemon, n.d.). They initially served the yoga community and expanded their products for both genders and many athletic categories (Lululemon, n.d.). By 2022, Lululemon had a global presence of 650 stores 1 . They achieved revenues of $1 billion in 2011, which grew to $8 billion by 2022 2 . Sustainability and the Fashion Apparel Industry The fashion industry contributes approximately 8 to 10 percent of global greenhouse gas emissions, exceeding combined emissions from the shipping and aviation sectors (UN, 2019). Among the environmental damage posed by clothing production include 1 https://www.forbes.com/sites/timnewcomb/2023/06/08/lululemon-celebrating-25-years-with-continued- global-expansion/?sh=3009074d5437 2 https://www.forbes.com/sites/timnewcomb/2023/06/08/lululemon-celebrating-25-years-with-continued- global-expansion/?sh=3009074d5437 ©

2 © May not be copied or duplicated without the permission of the owner. natural resources such as water, chemicals from dyes that spill into the natural environment, and the waste produced by unused or underutilized clothing (UN, 2019). Lululemon’s Commitment to Sustainability In the fall of 2020, Lululemon released an impact agenda outlining the brand's dedication to fostering a sustainable future (Lululemon, 2020). The impact agenda pinpointed key areas of focus: sustainable product innovation, sustainable materials, circularity, climate change, and water and waste. Among their planetary goals, they state "by 2030, we will make 100 percent of our products with sustainable materials and end-of- use solutions toward a circular ecosystem." (p. 25). Their stated goal in sustainable materials innovation: "By 2025, we will achieve at least 75 percent sustainable materials for our products — including fibres that are recycled, renewable, regenerative, sourced responsibly, or some combination thereof, and/or are manufactured using low-resource processes." (p. 26) While the company was showing indication of moving in a positive direction, for example, their sustainable material usage increased to 38% in 2021 from 30% in 2020 (Holger, 2023), they still had opportunities to improve. Environmental and Social Controversies Despite its market success, Lululemon has experienced various controversies. Notably, Chip Wilson, the founder of Lululemon, had placed the company in the spotlight emerging from his contentious remarks. In 2013, Lululemon attracted media attention from c omments Wilson made regarding women’s bodies arising from quality concerns of its leggings raised by customers (Holpuch, 2013). Shortly following, Wilson resigned as chairman of the board (Holpuch, 2013). The company's environmental progress also garnered skepticism over the years. For example, in 2022, Stand.earth, an environmental not-for-profit organization, raised attention to Lululemon's use of coal-powered factories in Asia (Stand.earth, n.d.). Responses to this news included yoga instructors across the globe who penned an open letter urging Lululemon to transition to renewable energy sources for production (Readfearn, 2022).The not-for-profit organization also highlighted an increase in emissions intensity in 2021, raising questions regarding the company's progress in

3 © May not be copied or duplicated without the permission of the owner. meeting its sustainability targets ( https://shop.lululemon.com/en-ca/story/product- sustainability ) (texfash, 2022). Sustainability Ratings and Feedback External evaluators have critically assessed Lululemon’s sustainability commitments. Notably, in January 2022, Good on You, a sustainable and ethical fashion brand rating platform, rated Lululemon as ‘not good enough’, identifying gaps in their environmen tal, social, and animal welfare practices. Lululemon’s Product Sustainability A key issue regarding Lululemon's environmental sustainability centres on its products. One of their most popular products, their leggings, is a source of the company's success and ecological unsustainability. This is because Lululemon's leggings rely on nylon over polyester. Nylon constitutes over half of the synthetic fabric the company uses in their product (Holger, 2023). As a petroleum-derived fabric, nylon is non-biodegradable that releases microplastics into the environment (Truscott, 2020). Considering these emerging concerns and the company's commitment to integrating more sustainable materials into its products, it has taken several positive steps. For example, they invested in the bioengineering firm Genomatica, aiming to develop plant- based nylon alternatives (Kerencheva, 2021). By 2023, in collaboration with Genomatica, Lululemon introduced the first plant-based nylon products (Paglinawan, 2023). They also partnered with Australian tech startup Samsara Eco in 2023, which "will create wha t they describe as the world’s first infinitely recycled nylon 6,6 and polyester from apparel waste." (Shu, 2023). Asked about the sustainability transition, Esther Speck, vice president and head of sustainable business and impact, emphasized Lululemon's dedication: "As with any large-scale material transition, these transformations take a concerted effort across all of our supply chain vendors and manufacturing partners and require time to build and scale." (Roshitsh, 2022)

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