Responsible

Supply Chain
Disclosure
2022
Contents
3 Notes from our leaders About this Disclosure
Our 2022 Responsible Supply Chain Disclosure
4 Responsible Supply Chain program (RSC Disclosure) is supplementary to our
5 Policies and commitments Impact Report. It addresses our work in responsible
6 Impact governance business conduct due diligence to identify, mitigate,
and address supply chain risks1 and impacts
7 Our supply chain
to makers (the people who make our products)
in our supply chain, and support their wellbeing.
8 Risk and remediation
8 Identifying risks Our RSC Disclosure shares information on lululemon’s
11 Addressing risks fiscal year ending January 31, 2023 (referred to
throughout this report as “2022”). This report covers
12 Access to remedy
contract suppliers of our products and excludes
information on suppliers of trims or non-product
13 Focus issues
goods and services procured. It does not include
13 Occupational health and safety information on lululemon Studio (formerly MIRROR,
14 Working hours and fair compensation which was acquired by lululemon in 2020) as
15 Forced labour this represents a small portion of our business.
17 Freedom of association

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18 Maker wellbeing

19 Stakeholder engagement
and collaboration

20 Forward-looking statements

1 Per the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, supply chain risks are defined as risks
of harm to individuals, other organizations, and communities in relation to human rights, labour rights, and the environment.

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Notes from our leaders

Thank you for reading our provides grants for programs that support our At lululemon, we know that understand the deeper tiers of our supply chain
makers, their families, and communities. I am proud and working with our suppliers towards full
2022 Responsible Supply Chain that we are on track to meet our goal to make our business relies on a robust traceability of our products. We’re proud to
Disclosure, outlining our actions wellbeing programs available to more than 100,000 Responsible Supply Chain contribute to initiatives such as CARE, the
makers across our supply chain by 2025. Resilience Fund for Women in Global Value Chains,
and ongoing commitments to program that retains and and our Vendor Grants program, which addresses
Our approach is grounded in the belief that
uphold robust standards, address collaboration is essential to effecting lasting, empowers its makers. needs directly identified by suppliers and makers,
and creates positive impact for makers, their
systemic challenges, and improve positive change. We are committed to working families, and communities.
with suppliers and partners who share our values
the wellbeing of the people and advance positive impact. And as our business
In the past year, we continued to expand the
Finally, I’m personally pleased that lululemon will
scope of our Responsible Supply Chain program
who make our products. grows, we will continue to leverage collective to advance responsible practices and maker publish our first Human Rights Due Diligence
action to elevate our practices and drive policy in early 2024. It will not only focus on human

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wellbeing in the industry. We’re consistently evolving
industry improvements. our strategy, policies, and practices to better rights in the supply chain but will also address our
At lululemon, we are guided by our Impact Agenda operations and strategic partners.
I am grateful to our teams around the world identify and manage risks, continuously improve
and Be Human pillar to create environments that
for their dedication to contributing to a more working conditions, ensure fair compensation and At lululemon, our goal is to support the wellbeing
are inclusive, diverse, equitable, and foster
equitable, sustainable future for all, and proud of responsible purchasing practices, and elevate of people and restore a healthier planet. This goal
growth for our people. As our industry continues
the foundational work we have done to safeguard opportunities for makers. encompasses our entire value chain, including
to experience disruptions, we recognize our
opportunity and responsibility to actively safeguard working conditions and wellbeing. We’re focusing on further integrating our our makers. I am proud of the work we have done
the working and labour conditions of the people responsible supply chain practices into internal towards creating a responsible supply chain and
who make our products. operations and better understanding the will continue to share our successes and challenges
opportunities available through purchasing along the way.
We are committed to having a strong, resilient
practices and evolved policies. We have a goal
supply chain that upholds international human
of achieving Fair Labor Accreditation by 2024,
rights and standards, as laid out in our Vendor
C A LV I N M C D O N A L D an industry-leading framework for advancing
Code of Ethics. We are also on a journey to disrupt
Chief Executive Officer supply chain practices.
inequity in wellbeing through our business and
Centre for Social Impact. In collaboration with This work relies on long-term business ESTHER SPECK
organizations such as CARE and the Resilience relationships with suppliers that share our Senior Vice President, Sustainable
Fund for Women in Global Value Chains, the Centre company values. We’re striving to better Business and Impact

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Responsible Supply Chain program
The aim of lululemon’s enterprise Impact Agenda is to support the
wellbeing of people and help restore a healthier planet. Our Responsible
Supply Chain program is a foundational part of our Impact Agenda,
advancing our commitments to fair labour practices and the wellbeing
of the people who make our products.

It is built on three pillars: In 2022, we engaged industry experts to review Progress towards Fair
the alignment of our Responsible Supply Chain
• Monitoring—Assessing and improving working (RSC) program against the OECD’s Due Diligence Labor Accreditation
conditions in factories Guidance. This included a formal due diligence
• Integration—Integrating responsible purchasing alignment assessment across owned operations We joined the Fair Labor Association (FLA)
practices across enterprise strategies, processes, and our supply chain, and will inform evolved human in February 2020; it's a key component of our
and tools rights risk assessment processes. In early 2024, Responsible Supply Chain program. We are
we will publish our Human Rights Due Diligence currently a participating company and are working
• Collaboration—Working with multi-stakeholder Policy, covering our own operations, value chains, to become an accredited member by 2024.

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organizations, industry, suppliers, and brands and partnerships. The Fair Labor Accreditation process entails
to support systems change and impact a thorough evaluation of a company’s systems
to implement and maintain a workplace code
We take great care to select and work with values- aligned with the highest international standards.
aligned suppliers and collaborate to build or Areas assessed include responsible purchasing
enhance supplier capacity to meet and exceed practices, a clear commitment to and plan for
compliance requirements. Our program is based on fair compensation, supplier monitoring and
the principles of the OECD Due Diligence Guidance remediation, training for staff and suppliers, and
for Responsible Business Conduct. It is designed implementation of grievance mechanisms.
to identify, cease, prevent, or mitigate supply chain
risks throughout our value chain, while advancing The FLA assesses effective implementation through
wellbeing and positive impact. We take a continuous annual evaluations, headquarter visits, and field
improvement approach to due diligence across our observations of in-country assessment staff.
business, and continue to strengthen our practices, In 2022, we successfully completed the second
global standards, and impact programs. milestone of our accreditation process, which
included field observations in Vietnam, as well as
the completion of FLA Sustainable Compliance
Initiative assessments for five percent of our Tier 1
suppliers (final product manufacturing).

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Policies and commitments
We are committed to responsible business conduct, The policies that govern our approach to responsible business conduct include:
and to acting ethically and with integrity in all our
business dealings. Our policies, which are regularly Policy Purpose Applicable stakeholders
reviewed and updated, are based on international Global Code of Business Conduct Our policy sets out our ethical business practices, including our commitment to a responsible All lululemon and lululemon
standards, including: and Ethics (CoC) supply chain. Studio employees, ambassadors,
contractors, officers, and directors
• Universal Declaration of Human Rights
Vendor Code of Ethics (VCoE) Our VCoE outlines our unwavering commitment to respect human and labour rights, and promote safe Suppliers, supplier-owned facilities,
• United Nations Guiding Principles on Business and fair working conditions for people in our supply chain. It sets the minimum standards for our supplier subcontractors, and upstream
and Human Rights partners. Our VCoE is a component of all our supplier agreements with both Tier 1 and Tier 2 suppliers2 and suppliers
aligns with the FLA Fair Labor Code.
• International Labour Organization’s (ILO)
Declaration on Fundamental Principles and Rights Vendor Code of Ethics Compliance Our VCoE Compliance Benchmarks outline our VCoE requirements in detail, including our global Suppliers, supplier-owned facilities,
at Work Benchmarks (VCoE Compliance compliance principles and expectations of supplier business conduct. They also provide the foundation subcontractors, and upstream
Benchmarks) for assessing a facility’s performance and progress against VCoE requirements. Our VCoE Compliance suppliers
• ILO Indicators of Forced Labour Benchmarks align with the FLA Workplace Code of Conduct and Compliance Benchmarks.
• OECD Guidelines for Multinational Enterprises Foreign Migrant Worker Standard Our FMW Standard sets out minimum requirements for the appropriate and ethical recruitment, Tier 1 and Tier 2 suppliers and
• OECD Due Diligence Guidance for Responsible (FMW Standard) employment, and repatriation of foreign migrant workers, a group vulnerable to forced labour practices. their subcontractors with foreign
migrant workers in their facilities
Supply Chains in the Garment and Footwear Sector

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Supplier Agreement The legal contract between lululemon and our suppliers includes a supplier acknowledgement of the VCoE Tier 1 and Tier 2 suppliers as well
requirements and requires suppliers to commit that their facilities, suppliers, contractors, subcontractors, as strategic trims suppliers
and employees that manufacture lululemon’s products comply with the VCoE.

Certificate of Acknowledgement and All suppliers and subcontractors are required to sign the CoAA, a component of the Supplier Agreement. Tier 1 and Tier 2 suppliers and their
Approval (CoAA) This certifies they understand and will conform with the VCoE requirements and, if applicable, the FMW subcontractors as well as strategic
Standard. The CoAA includes a commitment to continuous improvement. trims suppliers

2 Tier 1: final product manufacturing. Tier 2: facilities that supply our Tier 1 factories with materials.

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Impact governance
Board of Directors (BoD)
Our Board of Directors and Executive Leadership Oversees lululemon’s environmental, social, and governance strategies including our Impact Agenda, associated investment, and risk management.
team are accountable for our responsible business
conduct goals and strategies, including our BoD Audit Committee BoD CRS&G Committee
RSC program. At the Board level, our Corporate Accountable for Global Code of Conduct and Business Ethics, Accountable for the Impact Agenda and all related impact.
Responsibility, Sustainability, and Governance, and the Vendor Code of Ethics. Provides oversight on supply Oversees policies, practices, and reporting related to corporate
(CRS&G) Committee and our Audit Committee chain risk. Meets quarterly. responsibility and sustainability. Meets quarterly.
oversee RSC policies, practices, and reporting.
lululemon’s governance structure is also supported
by several critical roles and groups:

• The Executive Leadership team, led by our CEO, CEO

is responsible for our enterprise Impact Agenda Sets corporate direction and strategy.
goals and execution.
• Our Senior Vice President, Sustainable Business
and Impact (SBI) works closely with our Board, Executive Impact Council
CEO, and Executive Leadership team. They lead Includes Chief Legal and Compliance Officer, Chief Supply Chain Officer, Chief Product Officer, Chief Brand Officer, Chief Financial Officer,
an enterprise function including the RSC team, and Chief People & Culture Officer. Chaired by Senior Vice President, Sustainable Business and Impact. Oversees Impact Agenda strategy,
which consists of over 12 experts based in key policies, and implementation plans. Works to ensure our business is acting responsibly. Meets quarterly.

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sourcing regions and global head offices. They
report quarterly to the CRS&G Committee and at
least annually to the Board and Audit Committee.
They also chair the Executive Impact Council and Sustainable Business and Impact function Other business functions and teams
meet with the CEO.
Drives environmental, social, and governance strategy across the Implement policies, procedures, programs, practices, and reporting,
• Our Chief Legal and Compliance Officer organization. Oversees, executes, and reports on Impact Agenda including sourcing, production, merchandising, legal, finance, supply
is accountable for compliance and the strategies, policies, and implementation plans. Integrates the Impact chain strategy, and brand.
Global Code of Business Conduct and Ethics. Agenda into our business strategy and ensures our business is acting
They report quarterly to the Audit Committee. responsibly. The RSC team is a part of this function.
• Our Chief Supply Chain Officer leads the global
supply chain function and is accountable for the
integration of responsible supply chain practices.
Metrics and monitoring program
Monitors performance through mechanisms such as our RSC program key performance indicators, vendor scorecards,
quarterly enterprise Impact Scorecard, and other internal and external tools.

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Our supply chain Traceability
We continue to expand our traceability work to
We maintain a consolidated, curated supply chain support and facilitate our due diligence approach to
and hold direct relationships with Tier 1 and Tier 2 identify, prevent, and mitigate risks in the upstream
suppliers. In 2022, we worked with 45 Tier 1 supply chain of our suppliers. We also continue
suppliers who manufactured our products and to advance the collection of information on our
60 Tier 2 suppliers who provided the fabrics for materials, focusing on our high-volume materials
our products. and those that could be linked to greater risks.
To support this process, we use credible certification
In 2022, 39 percent of our products were
programs across commodities, including those that
manufactured in Vietnam, 14 percent in Cambodia,
have been identified as exposed to known sector
12 percent in Sri Lanka, 8 percent in Bangladesh,
risks. See section on Forced labour and our annual
7 percent in Indonesia, and the remainder in other
Impact Report for more information on traceability.
locations. In 2022, 43 percent of our fabrics originated
from Taiwan, 19 percent from China Mainland,
16 percent from Sri Lanka, and the remainder from
other locations. The factories that make our products
employ almost 300,000 people, approximately
65 percent of whom are women.

Biannually, we publish a list of our suppliers

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and subcontractors on our website; this is
where the most up-to-date information can be
found. Our latest supplier list includes all of our
Tier 1 facilities (101 facilities) and our strategic
Tier 2 facilities (27 facilities), as well as 16 Tier 1
subcontractors. This information can also be found
on the Open Supply Hub website.

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Risk and remediation
We designed our RSC program to identify and address supply chain risks and provide access to remedy for our makers.

Identifying risks
Supply chain risks are defined as risks of harm to
individuals, other organizations, and communities
in relation to human rights, labour rights, and Sector and country Stakeholder engagement Maker grievance reporting mechanism Internal data and expertise
the environment, per the OECD Due Diligence We monitor general and specific Through our memberships in Our maker grievance reporting Our global RSC team is based in key
Guidance. As part of our due diligence approach, sector risks across sourcing regions industry and multi-stakeholder mechanism provides a way for sourcing regions and is responsible
we conduct regular human rights and social risk and countries. We use screening initiatives (e.g., Fair Labor Association, individuals and organizations for conducting or overseeing
mapping across our supply chain. We assess known tools, publicly available credible American Apparel & Footwear in our supply chain to raise non- facility assessments to verify VCoE
sector risks and other risks that may be prevalent reports, and industry expertise and Association, Sustainable Apparel compliance issues related to our compliance, supporting the remediation
in a particular geography or production process, consultants to identify a range of Coalition, Responsible Labor Initiative), VCoE. They can also voice concerns of issues, and informing global impact
such as occupational health and safety, wages industry-relevant social, labour, we collaborate and engage with related to any potential or actual programs. All Tier 1 and Tier 2 facilities
and working hours, forced labour, and freedom of and environmental risks. We assign industry partners, civil society, breach of international human rights undergo RSC assessments prior to
association. We also look at the economic, social, ratings to help us make decisions on stakeholder groups, and peer brands that is directly linked to lululemon’s the start of our business relationships,
and political contexts across countries, as well engagement and develop management to identify, evaluate, and address risks, operations, products, or services. and annually thereafter. The RSC team

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as other indicators that could signal increasing strategies for certain regions and including forced labour. We analyze these cases after stays in close contact with suppliers
severity of risks and impacts. This enables us to issues. When our monitoring identifies appropriate actions have been and local communities, and directly
identify and prioritize actual and potential impacts potential severe risks, we conduct taken and incorporate the learnings informs our understanding of local
and informs the way we assess our suppliers and heightened due diligence. Prior to into our broader and ongoing and regional risks.
provide support through global impact programs entering a new sourcing region or understanding of risks in our supply
and education. country, we conduct an in-depth risk chain. For more information on our
assessment. If certain risk factors are grievance mechanism, please refer
We assess risk through sector and country
present, we may choose not to source to the Access to remedy section.
assessments, stakeholder engagement, and our
from that country or region and/or
maker grievance reporting mechanism, as well
develop targeted strategies to manage
as internal data and expertise. In 2023, we are
the risks identified. For example, we are
working with industry experts to review and evolve
not pursuing sourcing opportunities in
our social, environmental, and human rights risk
Myanmar.
assessment process and implementation across our
supply chain, including Tier 1 and Tier 2 suppliers.

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Supplier selection
We have an extensive process for approving Some of the facilities did not meet conditions for Suppliers must conduct due diligence of a
new suppliers. We will only approve a new supplier approval; 13 did not proceed past the NVAP stage. subcontractor before recommending them to
if they successfully meet the requirements of lululemon. The supplier must have adequate
our New Vendor Approval Process (NVAP). We do not have direct contractual relationships policies and procedures to monitor subcontractor
The NVAP is a holistic process in which we evaluate with subcontractors. However, we require all compliance, including contracts that require
suppliers from a social, environmental, sourcing, subcontractors to be approved by lululemon its subcontractors to uphold the standards
quality, and production perspective at the facility and undergo RSC assessments. Our VCoE of lululemon’s VCoE.
level. In 2022, we approved 49 new facilities and states that suppliers cannot use unapproved
56 new subcontractors. subcontractors or homework.

New Vendor Approval Process

Pre-screening Supplier self-assessment Responsible supply chain Reassessment Engagement Ongoing monitoring
assessment and onboarding and assessment

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Assessment of capabilities, RSC supplier self- Facility-level, on-site Reassessment by the Supplier onboarding Facility RSC reassessment
education on RSC assessment to identify RSC assessment conducted RSC team to determine to lululemon’s culture, conducted every
expectations, and gaps against our VCoE by lululemon or nominated whether the CAPA standards of business, 12 months by lululemon
identification of potential Compliance Benchmarks. third-party. has been successfully RSC program, and or a nominated third-party.
business risks.3 implemented. requirements. Additional Additional assessments
functional training may be triggered by
where required. certain risks or grievance
investigations.

Decision point: Decision point: Decision point:

Determine whether RSC team reviews result Decision point: Supplier approval.
to move onto supplier to determine facility- RSC team works with facility to
assessment based level readiness to meet develop CAPA4 if required.
on risk screening. the VCoE requirements.

3 E.g., financial, product execution, social and labour, environmental.

4 Corrective and Preventative Action Plan.

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Supplier assessments In 2022, we expanded the RSC team to build more
All facilities producing for lululemon are regularly on-the-ground capacity in key sourcing regions
assessed against the requirements of our VCoE such as Sri Lanka. We also invested in new roles and
NUMBER OF ASSESSMENTS IN 2022 KEY
Compliance Benchmarks. Our policy is to assess enhanced our RSC assessment tool to enable more
all Tier 1 and Tier 2 facilities every 12 months at a detailed data analysis on non-compliances, root Assessments
causes, and other trends. In 2023, we will roll out a 74% 26%
minimum. Subcontractor reassessment frequency by lululemon
is based on risk factors such as geography, new data management system. Total assessments: 452 Assessments by
production processes, or elevated risk of severe nominated third-
In 2022, we carried out 452 RSC assessments;
issues such as forced labour or foreign migrant party assessors
336 (74 percent) were conducted by our internal
workers. In 2022, we conducted 46 reassessments
RSC team, and 116 (26 percent) were conducted
of existing subcontractors.
via nominated third-party assessors. The FLA
Supplier assessments are carried out on-site and carried out four assessments (five percent of our
ASSESSMENT FINDINGS
include visual inspections of the entire facility, Tier 1 facilities). Most assessments were carried BY C AT E G O R Y I N 2 0 2 2 KEY
including on-site dormitories where applicable, out in person. However, due to COVID travel
documentation reviews, and interviews with restrictions in certain regions, a small number 3% Health and safety
management and workers. This allows assessors of facilities conducted interim self-assessments Labour
to gain an in-depth understanding of the working or online verification. These facilities were Management systems,
conditions in the facility and any deviations from conditionally approved until our assessments 12% policies, transparency,
the VCoE Compliance Benchmarks. could be completed in person. and other

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Environment
These assessments are conducted by either Findings typically relate to health and safety,
our internal RSC team or nominated third- labour, environmental management systems,
party assessors. Selected facilities are also policies, and transparency. In the health and safety
assessed through our membership with the FLA. category, we assess a wide variety of aspects
Assessments and Corrective Action Reports for including fire preparedness and health and safety
these facilities, as well as investigation reports for management systems. Issues assessed under
special cases, can be found on the FLA’s website. labour include wages and working hours, social
benefits, contractual issues, forced labour, and
If an assessment or other factor indicates potential grievance mechanisms. Our assessments also
for severe risks, we conduct heightened due include environmental management, such as the
diligence. This entails a more detailed analysis of labeling and storage of chemicals, training for
non-compliances and root causes, and may be done chemical and waste handling, and wastewater
in partnership or consultation with external experts. 31% 54%
treatment. Other issues include policy non-
Heightened due diligence assessments may be compliance or lack of transparency, such as the use
conducted for both existing and new suppliers. of unapproved subcontractors.

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Addressing risks In 2022, we conducted the following additional Corrective actions Our goal is to always work in partnership with
supplier training: We require our suppliers to develop CAPAs to suppliers to resolve issues. However, we maintain
We continue to develop and implement a range of address issues identified through internal, third- the right to terminate supplier relationships in cases
strategies to address supply chain risks. These are • Thirty-six required trainings on RSC program of severe or persistent non-compliance. When we
party, or shared assessments. Our approach to
carried out in partnership with our suppliers and are updates and the roll-out of our evolved RSC exit a supplier relationship, we work closely with the
corrective action is one of root cause analysis
based on best practices, due diligence guidance, and assessment tool evaluation content. This training supplier, and our sourcing, production, and legal
and continuous improvement, with the intention
internal goals. If an issue is flagged in an assessment reached 539 participants, representing nearly departments to reduce impacts on the workforce
of creating positive and lasting change. Our
or as part of our grievance processes, we work with all our suppliers. wherever possible. In 2022, we did not terminate
RSC team reviews and approves the CAPAs, and
the supplier on a Corrective and Preventative Action • Eight in-person and online training sessions on offers guidance to create more effective solutions any relationships.
Plan (CAPA). We have also developed more extensive various local or high-risk issues, reaching 585 where required. We verify supplier implementation
strategies to address issues that are systemic participants. For example, in Taiwan we trained through document review or on-site assessments
across specific sourcing regions. See Focus issues 18 Tier 2 suppliers on how to cascade our VCoE and regularly update the implementation status
section. We continue to strengthen our responsible requirements to their subcontractors, and how to related to FLA Sustainable Compliance Initiative
purchasing practices to avoid contributing to adverse address specific location-based risks, including assessments. These CAPAs are available on the
impacts on the makers in our supply chain. foreign migrant worker rights. FLA’s website.
• Mandatory e-learning training on forced labour We assess whether risks can be addressed by
Training prevention for all Tier 1 and Tier 2 suppliers. the supplier via a CAPA or if we need to support
We provide regular training on our RSC program through additional measures. These can range
and VCoE requirements for all Tier 1 and 2 Our RSC team also conducted mandatory training from technical training and awareness raising to
for key lululemon internal decision-makers from

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suppliers, as well as internal cross-functional more complex action plans, particularly when our
employees (e.g., legal, sourcing, merchandising). our sourcing, quality, production, strategic sales, assessments have indicated severe risks. Additional
Supplier training is provided in local languages and product development departments. One capacity or tools are designed and implemented
where possible. hundred ninety employees were trained on the with the help of external experts (e.g., the Foreign
updated RSC program, strengthening their ability to Migrant Worker Standard). We provide suppliers
As part of their onboarding process and training, support all stages of RSC management, including with additional requirements and clarifications
100 percent of new suppliers receive training on identification and management of human rights- related to the ethical recruitment and management
our VCoE expectations, management systems and related risks, responsible purchasing practices, of foreign migrant workers.
measures needed to remediate issues, and CAPA and supplier relationships. A further 229 internal
commitment delivery expectations. We also conduct decision-makers were trained in forced labour
mandatory e-learning (e.g., forced labour prevention, risks, policies, and purchasing practices to help
bribery, corruption) with all suppliers, and are prevent forced labour issues. In 2023, we will
developing further trainings to address specific integrate e-learning modules on our internal
regional risks and support facility improvements. learning platform, making training on RSC-related
Integrated quizzes and completion rates allow us issues available to a wider internal audience.
to measure supplier understanding and follow up
with personalized training where required.

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Responsible purchasing practices We then held an in-person strategic supplier Access to remedy In 2022, we received eight grievances: three
Our approach to responsible purchasing practices workshop with our suppliers’ top decision-makers. were related to wages and benefits, one was
starts with us and the decisions we make in Together, with suppliers and internal product We address supplier human rights complaints that related to worker-management relations, two were
building and maintaining long-term relationships and supply chain leaders, we reviewed the results are material, substantiated, and raised through related to harassment, and two were related to
with suppliers. Many of them have been working of the Index and identified areas of opportunity legitimate processes. We require all our suppliers forced labour. Please refer to the Forced labour
with us for over a decade. We are committed to within design and development, planning and to have site-level grievance mechanisms available section for more information. Of these grievances,
upholding fair dealings in our relationships, including forecasting, order placement and costing, to their workers. We also encourage trusted, six have been resolved and closed; two are open
order placement and payment, cancelled orders, and sustainable partnerships. effective management of grievances through robust under investigation.
and collaboration on solutions. processes. Beyond supplier grievance systems, our
We are further strengthening our approach maker grievance reporting mechanism enables When appropriate, we provide for or cooperate in
We recognize that our purchasing practices can to responsible purchasing practices. In 2022, individuals and organizations in our supply chain remediation within our supply chain. If multiple
impact our suppliers and in turn, the people who we created a cross-functional internal Responsible to raise non-compliance issues. These issues may parties cause or contribute to the harm, we work
make our products. For example, order fluctuations Purchasing Practices Task Force, which is working be related to our VCoE, or potential/actual breach to collaborate with those parties to provide,
and supply chain bottlenecks can affect overtime to advance applied practices and formalize a of international human rights directly linked to enable, or support remediation, to the extent of our
needs in factories. We are committed to responsible Responsible Purchasing Practices Policy and lululemon’s operations, products, or services. contribution to the impacts.
purchasing practices to avoid contributing to accountabilities. These initiatives will be rolled out
adverse impacts in our supply chains. in 2023. Our contact (sustainablepartner@lululemon.com)
is visible on the VCoE, which is displayed in
We review our purchasing practices alongside our local languages in all supplier and subcontractor
suppliers’ RSC performance. This helps us identify Tracking performance factories. It can also be accessed through our
areas where we can strengthen our practices To determine how well we and our suppliers are website. Submitted grievances are recorded and

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to mitigate risks of adverse impacts. We jointly performing, we monitor, verify, and validate progress acknowledged to the complainant within two days of
discuss opportunities and potential solutions against programs, measures, and indicators. receipt by the Director, Global Responsible Supply
with our suppliers. In 2022, we conducted an We include specific performance indicators Chain or appropriate Regional Managers. Makers
internal gap analysis of our purchasing practices throughout our RSC Disclosure and Impact Report can raise grievances directly with the regional RSC
against industry frameworks and participated in and are continuing to advance our performance team members. Through our membership in the
the Better Buying Purchasing Practices Index. indicators and metrics. FLA, we also offer the opportunity for makers and
Forty-one Tier 1 suppliers participated in the Index. their advocates to raise complaints directly with the
FLA, which works with us to investigate, remediate,
and resolve these complaints. Every complaint
is documented, internally tracked, and reported.
Where possible, every complaint is investigated,
and a response or resolution is provided to
the complainant.

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Focus issues
In 2022, we focused our work on the following issue areas: occupational
health and safety, working hours and fair compensation, forced labour,
and freedom of assocation.

Occupational health and safety Our approach in action

Over the past five years we have been partnering
Our VCoE requires suppliers to provide safe, healthy with a Bangladesh facility with approximately 15,000
workplaces and accommodation that meet their workers to reduce its injury and accident rate.
basic needs and supports accident and injury Injuries have been typically due to machinery and
prevention. Workers must have sufficient health and processes related to sewing, cutting, and pressing
safety training, access to clean washroom facilities fabric. We provided guidance for the supplier
and potable water, and safe machinery. We also to develop an action plan to reduce injury rates
require suppliers to implement proper health and and create a stronger safety culture. Since 2017,
safety management systems. the facility has reduced annual accident reports
significantly, from approximately 350 incidents to 16,
Health and safety risks and issues differ across
with continued focus on achieving zero incidents.
regions and facility types. We conduct root

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cause analysis for any health and safety-related As part of our RSC program, we work with suppliers
assessment finding. Most of the health and safety to identify areas for improvement; where appropriate,
assessment findings relate to facility maintenance, we provide guidance and training. In Cambodia, poor
including fire and emergency equipment road conditions, dangerous driving behaviours, and
maintenance, and operational measures such overloaded vehicles create risks for workers in their
as machine safety guard maintenance. In these daily commutes. Recognizing this risk, we engaged
cases, CAPAs include training and education as in programming and worked with all our Cambodia
well as process improvements (e.g., equipment suppliers (seven facilities) to implement additional
updates, regular maintenance records and checks, safety measures for worker transportation.
assignment of responsibilities). Safety measures included ensuring vehicles are
in safe working condition and not overloaded,
When injuries occur, they generally relate to the
improving driver capabilities through training and
operation of machinery. We have requirements
licensing, and conducting regular inspections of
in our VCoE Compliance Benchmarks specific
licenses and vehicles.
to proper use of machinery. We are currently
developing programs to target region-specific
or facility-type health and safety risks.

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Working hours and fair This information helps us identify ways our
purchasing practices may be contributing to
compensation overtime, and work with suppliers to address
issues and reallocate capacity. Any overtime work
We believe every maker should earn fair
must be voluntary and compensated at a premium
compensation within regular working hours, enabling
rate. We have zero tolerance for underpayment of
them to have a decent standard of living.5 Our VCoE
workers and involuntary overtime. In addition, break
requires suppliers to pay at least the legal minimum
time must be respected as per the national laws
wage and work with us to strive for fair compensation.
and regulations.
We also require suppliers to uphold international
standards of working hours as defined by the ILO. Our approach in action
This includes limiting the maximum number of
In 2022, we collected wage data from key supplier
hours of work per week, including overtime, to 60
facilities in Cambodia and Vietnam to better
hours or the local legal limit (whichever is less),
understand wage management systems, gaps in
except under extraordinary circumstances. In these
fair compensation levels, and the effects of our
cases, suppliers are required to request approval
purchasing practices on wages. We also analyzed
of excessive overtime, and provide a rationale for
external factors, such as inflation and COVID-
why overtime is needed.
related factory closures, and how they affect real
wage levels of makers. When some suppliers had

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to reduce the size of their workforce, we supported
them by assessing responsible retrenchment
as per FLA guidelines and providing overall
guidance. We will continue our journey towards
fair compensation and will publish a summary of
our fair compensation roadmap in 2023.

5 In calculating fair compensation, we follow the definition of the Global Living Wage Coalition.

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Forced labour In 2022, we provided all Tier 1 and Tier 2 suppliers Three raw materials with a high risk of forced
with mandatory e-learning on forced labour labour include:
We take a zero tolerance stance against forced prevention. We assessed the effectiveness
labour, defined by the ILO as “all work or service of the training using quiz results and completion
which is extracted from any person under the rates. We also provided forced labour training
menace of any penalty and for which the said to 229 of lululemon’s internal decision-makers
person has not offered himself voluntarily.” 6 (managers and above) from supply chain and Cotton: Represents approximately 16 percent of
product functions. Topics included forced our raw material usage by weight. Our approach
Our VCoE Compliance Benchmarks set out the labour risks in the supply chain, the specific continues to focus on sourcing cotton fibre from
minimum requirements for all suppliers and include requirements of lululemon’s RSC policies, and Australia, South America, and the United States.
all 11 ILO Indicators of Forced Labour. They also the use of responsible purchasing practices to We are also working to adopt more responsibly
include the employer pays principle, which states help prevent forced labour in the supply chain. grown cotton platforms in our portfolio, including
that fees and other costs associated with the traceable cotton initiatives as well as organic
employment of workers—including recruitment, We assess our supply chain to identify areas of and regenerative cotton chain of custody models.
travel, and processing fees—shall be the sole high risk for forced labour. Two particular areas
responsibility of the supplier. We are a signatory of identified are agricultural commodities and
the AAFA’s and FLA’s Commitment to Responsible foreign migrant workers.
Recruitment, and our Foreign Migrant Worker
Standard requires that no fees be passed to workers
related to recruitment. Agricultural commodities Natural Rubber: Constitutes approximately one
percent of our raw material usage by weight. One

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There are a high number of lower-skilled workers
Our RSC assessment tool evaluates facility in the agriculture sector, and informal work hundred percent of the natural rubber we sourced in
performance against our VCoE Compliance arrangements often exist. Depending on regional 2022 came from Forest Stewardship Council (FSC)
Benchmarks. In regions with elevated risk, we infrastructure and other factors, the potential certified forests in Guatemala and Sri Lanka. FSC
include additional checks pertaining to hiring for limited oversight and protection can lead to certification prohibits the use of forced labour.
channels and recruitment fees. During on-site an increased risk of forced labour. Our policy is
assessments, we evaluate the working and living to source agricultural commodities from regions
conditions of foreign migrant workers and give where there is lower risk, as determined through
special consideration to benefits (e.g., social our risk assessments, and to certify them through
Wool: Makes up less than one percent of our
security, pension payments), as well as inclusive the adoption of appropriate industry traceability
raw material usage by weight. Countries of origin
working practices and worker-management standards.
reported by our suppliers include Australia,
communication. New Zealand, and South Africa. lululemon is
committed to sourcing 100 percent of our wool
from Responsible Wool Standard certified sources
by 2025.

6 ILO Forced Labour Convention.

15
Foreign migrant workers foreign migrant workers in two supplier facilities to In 2022, an Indonesian maker raised a complaint via adjusted their overtime and sick leave/medical
Makers who leave their homes to work in another understand whether workers have full understanding our maker grievance reporting mechanism about assistance policies. We followed up with on-site
country or region can be vulnerable to forced of their rights, have been reimbursed any fees as mandatory overtime to finish an urgent order on visits and worker engagement. In partnership with
labour through unethical recruitment, hiring, required, and are satisfied with the outcome of time. Our RSC team worked with the Tier 1 supplier the facility’s management, we will also conduct a
and employment practices. Examples of such any remediation. We are continuing to follow up to to investigate the case with both the facility and our satisfaction survey.
practices may range from withheld documentation understand worker satisfaction and feedback. After internal production teams, and determine the root
to indebted labour due to lack of repayment of experiencing COVID-19 related delays, we are now cause of the situation. The claim was substantiated. We strive to continuously evolve our approach to
recruitment fees. In 2022, almost 5,000 foreign expanding the FMW no-fee program to Japan, Korea, The situation was due to miscommunication eradicating forced labour from our supply chain.
migrant workers were employed by lululemon’s and Thailand. between the facility’s HR department and In 2022, in addition to our external OECD Due
Tier 1 and Tier 2 suppliers. production department. To remediate, the facility Diligence alignment review, we commissioned an
updated their overtime policy and procedures, and independent intermediary to conduct a review
Our approach in action provided training to all staff to ensure the voluntary of our program with respect to forced labour.
We have identified foreign migrant workers as an
at-risk group in specific sourcing locations, including In 2022, we identified violations of our Foreign nature of overtime is understood and upheld. We are implementing key actions for continuous
Japan, Korea, Taiwan, and Thailand. In these Migrant Worker Standard at a potential Taiwanese Our RSC team ensured all overtime was correctly improvement in 2023.
locations, we’re working with suppliers and their Tier 2 subcontractor. These included contracts not remunerated and has followed up with the maker to
subcontractors to adhere to our Foreign Migrant provided in a local language, mandatory monthly determine satisfaction with the resolution.
Worker Standard. We are also providing guidance wage saving, non-reimbursement of airline ticket
in ethical recruitment and ongoing employment of costs for two makers, and excessive hiring fees. We In 2022, a maker in Bangladesh raised a complaint
foreign migrant workers, including the eradication of worked closely with the subcontractor facility and via our maker grievance reporting mechanism
recruitment fees. our supplier to remediate these issues, including around access to sick leave and medical facilities. In

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establishing bank accounts for all makers (so they collaboration with the supplier, we commissioned an
Since 2017, we have been supporting Tier 1 and Tier have control over their full wages and savings) independent intermediary to thoroughly investigate
2 suppliers in Taiwan through a Foreign Migrant and full reimbursement of contract renewal fees the issues. They did an on-site review of documents,
Worker “No Fee” program, with the aim of eradicating and travel costs. We verified the reimbursement of and conducted 90 interviews with current line
recruitment fees for foreign migrant workers. As payments; through interviews and document review, workers, supervisors, and former employees of the
of 2022, all 33 of our Taiwanese supplier facilities we also verified the affected makers’ satisfaction facility. They found the claim to be substantiated.
complied with the program’s no-fee requirements. with the remediation outcome. To remediate the situation, the factory management
Additionally, in 2022 we rolled out digital surveys to

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Freedom of association Our approach in action
Following an allegation of anti-union activities in
Freedom of association and collective bargaining P E RC E N TAGE O F TI E R 1 AN D TI E R 2
2020, we worked with a facility in the Philippines
FAC I L I TI E S W I TH C O L L E CTI V E
are core labour rights. Apparel and other BARGAI N I N G AGRE E M E N TS to support management and the union in
industries manufacture products in regions and reaching a resolution. In 2021, we commissioned
countries where these rights may be restricted Tier 1 the FLA to conduct an independent investigation.
or reduced. These issues were further heightened Throughout the process, the facility was
during the COVID pandemic. 51%
supported in effectively addressing issues and
Tier 2 improving union-management relationships. A
Our VCoE requires suppliers to recognize and collective bargaining agreement with the union
respect the right of makers to join and organize 31% was signed in 2021.
associations of their own choosing, and to bargain
collectively without interference from suppliers. If In April 2022, the FLA published a verification
the right to freedom of association and collective report. They found the facility had done due
bargaining is restricted under law, the supplier P E RC E N TAGE O F TI E R 1 AN D TI E R 2 FAC I L I TI E S diligence in largely maintaining industrial peace
must facilitate, and not hinder, the development W I TH I D E N TI F I E D U N I O N S O R WO RKE R C O U N C I L S in the facilities. The majority of initial findings
I N C H I N A M AI N L AN D AN D V I E TN AM were resolved. However, more work needs
of parallel means for independent and free
association, as well as collective bargaining. to be done to establish an effective labour
Tier 1
management council.
China Mainland
In countries where there are official trade unions

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or the requirement for the approval of a union by 33%
a higher local union organization, we encourage
suppliers to have alternative mechanisms to Vietnam
allow workers to freely associate. These may 70%
include worker welfare committees, and grievance
mechanisms that welcome worker input to create
safe and healthy workplaces. Tier 2
China Mainland

67%

Vietnam

50%

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Maker wellbeing
We believe everyone has the right to be well. And we know the path to wellbeing is possible when tools, support, and
resources are accessible to all. Through our business and the lululemon Centre for Social Impact, we support resilience and
wellbeing programs and practices that support makers, their families, and communities. We are on track towards our goal to
make wellbeing programs available to more than 100,000 makers across our supply chain by 2025.

Vendor Grants Projects included: Mental wellbeing Industry partnerships

We believe our suppliers and their makers have • Physical and mental wellbeing: Across several We understand wellbeing as a lifetime practice We support programs, initiatives, and industry
the best understanding of their specific wellbeing countries, our suppliers identified a need to of three interconnected elements—physical learnings that focus on women, gender equity,
needs, in relation to their unique circumstances and support makers in physical and mental wellbeing wellbeing, mental wellbeing, and social wellbeing. and wellbeing, including our partnership with
environment. This is why we partner directly with initiatives. We supported yoga classes in two In 2022, we partnered with Women Win and the CARE’s Made by Women program. This program
our suppliers to support projects that are tailored to facilities, as well as projects structured around International Center for Research on Women to focuses on improving practices in global supply
the wellbeing of their employees and communities. psychological support for makers in five factories better understand dimensions of mental wellbeing chains, strengthening women’s leadership, and
In 2022, we invited select suppliers to collaborate in four countries. for makers in the apparel supply chain. Through working with governments to promote public
with their makers and partnering organizations to the Maker Mental Wellbeing Project, we aim to policies that will positively impact workers.
• Reproductive health: In Vietnam, we supported
propose programs for funding and support. We improve the way mental wellbeing is understood In 2022, our funding supported program activities
a project by our supplier TANDE, which provided
reviewed their proposals and provided grants— both cross-culturally and from the perspectives of in Cambodia, Indonesia, and Vietnam. This included
1,300 female makers with access to information
which fund up to 50 percent of a project’s cost—to women (i.e, cis, trans, non-binary) makers. Project community-level local women’s platforms to
and services related to sexual and reproductive

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14 wellbeing projects in 9 countries, which reached research will take place in selected supplier facilities advocate for and contribute to gender equality, and
health, including prevention of violence
over 35,000 makers. in Bangladesh, Sri Lanka, and Vietnam. Findings will combat gender-based violence and harassment.
against women.
inform our understanding of mental wellbeing needs We also supported a communication campaign
• Health education: With our supplier Sabrina in the apparel supply chain to better support the in Vietnam to foster a positive shift in public
Fashion Industrial Corp., we supported a project in program's evolution. perception about female factory workers, including
Cambodia to provide health awareness sessions their needs, leadership capabilities, and skills.
in local classrooms and communities, providing
300 students and community members with In 2022, we joined the Resilience Fund for Women
information around mental and physical health, in Global Value Chains. This first-of-its-kind pooled
stress management, and skills development. funding initiative provides an opportunity for
companies, corporate foundations, and private
We evolved our 2023 Vendor Grants program to foundations to invest in the long-term health,
prioritize factory-based projects and identified wellbeing, and economic resilience of women who
wellbeing in the workplace and gender equity as form the backbone of global supply chains. Through
two key focus areas. We are funding 15 relevant collective investments, democratized processes, and
projects in 2023. real-time feedback and learning, the Fund is lifting
women-led, locally driven solutions to systemic
problems that leave women more vulnerable to
crises (e.g., the COVID-19 pandemic).

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Stakeholder engagement and collaboration
Engaging and collaborating with stakeholders are important aspects of our work.

Our stakeholders include the people or organizations Organization / Association Participation Focus
throughout our supply chain who affect or are American Apparel & Footwear Member, Participant Social US industry association. We actively participate in committees to share information and best practices.
affected by our operations. These include suppliers Association (AAFA) Responsibility Committee, Participant
and their workers, local communities, investors, Forced Labor Working Group
governments, and civil society organizations. To
Better Work Participant Brand in the following Partnership between the ILO and IFC, bringing together all levels of the garment industry to improve
engage with our stakeholders, we participate in a
countries: Cambodia, Haiti, working conditions and respect of labour rights for workers. lululemon purchases select shared audit
variety of industry associations, multi-stakeholder Indonesia, Vietnam reports.
organizations, and non-profit initiatives. We work
closely with our industry and others to develop Fair Labor Association (FLA) Participating Company International network of companies, universities, and civil society organizations promoting human
sustainable business approaches that address RSC rights at work. lululemon was accepted as a participating company in February 2020, with the goal of
becoming an accredited member by 2024. The FLA provides tools and training to build expertise in
topics on a global, regional, and local level. Through
companies and drive innovation in business practices, ultimately improving working conditions and lives
collaborations and partnerships, we build momentum of supply chain workers.

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for systemic change throughout our industry, such as
fair compensation and maker wellbeing. Resilience Fund for Women in Investor Member A first-of-its-kind pooled funding initiative for companies, corporate foundations, and private foundations
Global Value Chains to invest in the long-term health, wellbeing, and economic resilience of women who form the backbone of
global supply chains.
Memberships and associations
Responsible Business Alliance's Supporter World’s largest industry coalition dedicated to corporate social responsibility in global supply chains.
We participate in multi-stakeholder initiatives that Responsible Labor Initiative (RLI) lululemon tracks RLI work and, where appropriate, utilizes the training materials created by RLI to raise
tackle supply chain issues and risks, including awareness of issues of forced labour within our supply chain.
traceability and worker rights in our supply chain.
Sustainable Apparel Coalition Member A global multi-stakeholder non-profit alliance for the consumer goods industry. The SAC transforms
We engage with industry partners, other brands, civil (SAC) business through collaborative tools and solutions including the Higg Index, a suite of tools that
society, and stakeholder groups to identify, evaluate, standardizes value chain social, labour, and environmental measurements.
and address human rights risks, including modern
slavery and forced labour. Textile Exchange Member A global non-profit driving positive impact on climate change across the fashion and textile industry.
It guides a growing community of brands, manufacturers, and farmers toward more purposeful production
from the very start of the supply chain.

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Forward-looking statements Contact us
This document and any related information we The realization of our goals, expectations, plans and We welcome your thoughts and ongoing
share about our business and supply chain contains strategies, and the accuracy of our assumptions,
statements concerning our commitments, goals, are subject to risks and uncertainties that could dialogue as we move forward. Email us at
and future plans relating to our business and supply cause actual results to differ materially from those sustainablepartner@lululemon.com
chain that are forward-looking statements within anticipated or described in the forward-looking
the meaning of the “safe harbor" provisions of the statements. Some of these risks and uncertainties are
Private Securities Litigation Reform Act of 1995 and described in our public statements and reports we
other regulations. These statements include those file with the US Securities and Exchange Commission,
related to our efforts, goals and future plans to identify, including our most recent Form 10-K and Form 10-Q.
mitigate and address supply chain risks and impacts We encourage you to read those risk factors.
in our supply chain. The forward-looking statements
are based on our expectations, plans, strategies and
assumptions as of the original date of the disclosure
document and we do not have an obligation to
update or revise those statements because of new
information, future events or otherwise.

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