Sunday, December 16, 2007

Sour On LuluLemon (A Tale of Corporate Greenwashing)

Lululemon Athletica appeals to a demographic that can lay down fifty plus dollars on a pair of stretch pants for yoga classes. It advertises in New Age aphorisms and images of rock n’ roll rebellion, and refers to its customers as yogis (which should immediately raise eyebrows, since traditional yogis were aesthetes unconcerned with “yoga fashion”).

But their clothes are extremely nice.

After much shopping around I decided that Lululemon’s Elevation Jacket was just what I needed for the California winter. The only problem was the jacket’s wool sleeves; I will only buy wool products if the wool is guaranteed to have been harvested using the most humane methods (if you don’t know about inhumane wool harvesting check this). Given the Lululemon clientele and the image they try to maintain, I assumed the store’s workers would be able to quickly directly me to documentation certifying that the wool in Lululemon products meets the highest ethical standards.

The first worker I spoke with assured me that Lululemon only gets wool from “happy sheep” but couldn’t provide documentation to back this up. She gave me a phone number and an email address for the “Customer Education Center”.

I emailed and later spoke on the phone with numerous Lululemon employees over the next three weeks. They kept assuring me that the company adhered to the strictest ethical standards, but couldn’t provide specifics. This email from an employee sums up their “just trust us” position:

We don't have any "documentation" to show you that our wool was harvested in a ethical manner, but I can assure you that we would never associate with any form of animal cruelty.

A few days ago I received a follow-up email from the person in charge of sourcing for Lululemon. She informed me that they buy their wool on the open market in Australia and Asia, and cannot guarantee that the sheep are treated humanely. She informed me that wool from those regions had to comply with “local and federal regulations”, which is roughly equivalent to claiming that cows are treated well in America because businesses have to comply with USDA regulations. It’s a joke; in fact, in a difficult feat, animal standards throughout Asia are even more abhorrent than in the U.S.

Bottom line: The entreaties to simply trust that Lululemon’s wool products were obtained from ethical suppliers were false; I was lied to many times.

Instead of playing the New Age card to engage in deceptive practices, Lululemon would do better to follow the lead of a competitor. Patagonia, another clothing company, has addressed the issue of the wool in its products by going the extra yard to ensure that it’s done right.

After learning that I had been given false information for upwards of three weeks, I told Lululemon that I wanted to file a formal complaint and also that I would be contacting the federal authorities. I lodged a complaint for false advertising with the Federal Trade Commission; I also plan to submit some version of this article to Bay Area newspapers, and to use it in my college courses as an example of corporate greenwashing.

All of this could have been avoided if Lululemon employees had simply told me that they couldn’t vouch for how the wool was harvested. Better yet, the company could have lived up to its principles, sourced the wool from ethical farms, and showed me the documentation to back it up.

Instead they figured that I wouldn’t bother to actually make them substantiate their claims. But I’m not your average customer; I’m an economics professor who teaches this stuff, and I viewed this as a case study.

They tried to pull the wool over the eyes of the wrong guy.

The moral?

Simply put, we cannot rely on the voluntary actions of corporations to significantly improve social and environmental standards. Without stringent oversight, regulation and penalties, corporations will not do the right thing. I’m a capitalist to the core, but as Adam Smith noted more than 200 years ago, the “invisible hand” only produces positive outcomes within a strong institutional context that puts a premium on ethical conduct.

P.S. Here’s a nice video that expresses a similar sentiment.

Jason Scorse

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