Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Economy

Environmental Achievements

• Tencel® production process recognized for ecological soundness with the “European Award for the Environment”, characterized by a practically closed solvent cycle.
• Lenzing Viscose® and Tencel® are fully biodegradable and decompose in compost within twelve weeks (awarded the Compostable Logo in April 2008).
• Per-acre fiber yield of Tencel® is four times higher than that of cotton, with water consumption up to twenty times lower.
• Raw materials (beech and eucalyptus) do not require irrigation and can be cultivated on land unsuitable for food production.

Social Achievements

• Introduction of Lenzing Principles in 2007, focusing on responsibility, entrepreneurial spirit, value creation, openness, and honesty.
• Implementation of a new performance management process with a tool for planning employee development needs and a 360° appraisal system.
• Continued commitment to training skilled labor with 21 trainees receiving training at various sites.
• Reorganization of occupational medical care in a modern health center.

Governance Achievements

• Appointment of Peter Untersperger as the new chairman of the management board.
• Appointment of Friedrich Weninger as a new member of the board.
• UniCredit Bank Austria sold its profit participation rights in B & C Holding to the B & C Group, ensuring long-term sustainable corporate development.

Climate Goals & Targets

Environmental Challenges

• Global financial crisis impacting global trade and the real economy, leading to a slump in the fiber industry.
• Extreme volatility of raw material and energy prices.
• Declining global fiber production and demand, particularly in Asia.
• Increased competition from Chinese fibers and aggressive pricing policies.

Mitigation Strategies

• Aligning production to demand and starting a comprehensive cost optimization program.
• Adjusting production output to the market situation in the fourth quarter in Asia.
• Maintaining full capacity at the Lenzing site due to its focus on special fibers.
• Securing pulp supply through continuous market monitoring and assessment.

Supply Chain Management

Responsible Procurement

• Careful selection of suppliers based on price, reliability, and quality
• Stable partnerships with contractual commitments

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Third-party Assurance: Eidos Deloitte Chartered Accountants and Tax Consultants

Sustainable Products & Innovation

• Tencel®, Lenzing Modal®, Lenzing Viscose®, Lenzing FR®

Awards & Recognition

• European Award for the Environment
• Compostable Logo
• Best organic ecological product award (Tencel® Eco Bed)
• Best Innovator Award by A.T. Kearney
• Pegasus in Gold (regional economy award)
• The Pacemaker 2008

Environmental Metrics

ESG Focus Areas

• Wood security
• Water stewardship
• Decarbonization
• Sustainable innovations
• Empowering people
• Partnering for systemic change
• Enhancing community wellbeing

Environmental Achievements

• Specific primary energy consumption reduced by 2.4%
• Specific CO2 emissions reduced by 3%
• Paskov pulp plant became the first coal-free site in the Lenzing Group
• Lenzing site achieved around 80% renewable energy in overall energy consumption
• Specific water intake/extracted reduced by around 5%
• Specific water returned reduced by around 3%
• High “Green Shirt” ranking in Canopy Hot Button Report 2017
• First cellulose fiber producer to complete the verification audit of the CanopyStyle Initiative

Social Achievements

• Launched a global mentoring program
• Increased expenditure on lifelong learning and personnel development by more than 40%
• Decreased employee turnover rate to 4.2%
• Implemented the “Heartbeat for Safety” program
• Conducted 5,612 “Safety Walks And Talks”
• Implemented a standardized, computer-based reporting system (“SHEARS”) for safety incidents

Governance Achievements

• Revised Global Code of Business Conduct (CoBC) and implemented group-wide training
• Activated the “Tell us” whistleblowing system
• Received “Gold status” in EcoVadis assessment
• No cases of corruption or significant fines/sanctions in 2017

Climate Goals & Targets

Environmental Challenges

• Growing demand for textiles and limited resources
• Climate change and its impacts
• Water scarcity and pollution
• Deforestation and loss of biodiversity
• Textile waste problem
• Microplastics pollution in oceans
• Supply chain risks
• Stricter environmental regulations

Mitigation Strategies

• Developed innovative net-benefit products (e.g., TENCEL™ Lyocell fibers with REFIBRA™ technology, LENZING™ ECOVERO™ fibers, TENCEL™ Luxe filament)
• Implemented the EPEX continuous improvement program
• Set ambitious sustainability targets (e.g., 50% reduction in specific sulfur emissions by 2022, 20% reduction in specific wastewater emission by 2022)
• Initiated an afforestation project in Albania
• Implemented Higg – FEM 3.0 at all sites
• Assessed the sustainability performance of 50% of relevant suppliers
• Engaged with NGOs and multi-stakeholder initiatives (e.g., Canopy, SAC, Circular Fibres Initiative)
• Improved energy efficiency and increased use of renewable energy
• Improved water management in production processes
• Developed closed-loop processes for chemical recovery and reuse
• Improved waste management practices

Supply Chain Management

Supplier Audits: 50% of relevant suppliers assessed in 2017; aiming for 80% by 2022

Responsible Procurement

• Global Supplier Code of Conduct
• EcoVadis assessment
• Lenzing Wood and Pulp Policy
• FSC® and PEFC™ certifications

Climate-Related Risks & Opportunities

Physical Risks

• Flooding, drought, etc.

Transition Risks

• Stricter regulations, higher CO2 trading prices, carbon taxes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards (Core option), NaDiVeG

Certifications: ISO 9001, ISO 14001, OHSAS 18001, FSC®, PEFC™, EU Ecolabel, OK Compost, OK biodegradable Marine, OEKO-TEX® Standard 100, USDA Biobased

Third-party Assurance: KPMG Austria GmbH

UN Sustainable Development Goals

• SDG 12
• SDG 13
• SDG 15
• SDG 17
• SDG 1
• SDG 3
• SDG 6
• SDG 8

Lenzing's initiatives contribute to these goals through sustainable sourcing, efficient resource use, biorefinery operations, life-cycle thinking, innovative products, stakeholder engagement, and community wellbeing programs.

Sustainable Products & Innovation

• TENCEL™ Luxe filament
• LENZING™ ECOVERO™ fibers
• TENCEL™ Lyocell fibers with REFIBRA™ technology

Awards & Recognition

• European Award for the Environment

Environmental Metrics

ESG Focus Areas

• Circularity & resources
• Climate & energy
• Raw material security
• Biodiversity & ecosystems
• Sustainable innovation & products
• Health & safety
• Human rights & fair labor practices
• Business ethics
• Digitalization & cyber security
• Water stewardship
• Community wellbeing
• Diversity, inclusion & equal opportunity
• Employee empowerment & development

Environmental Achievements

• Reduced specific greenhouse gas emissions (Scope 1 & 2) by 12% compared to 2017 baseline.
• Reduced specific water consumption by 10% compared to 2014 baseline.
• Introduced first carbon neutral lyocell fibers for the nonwovens market.
• Expanded carbon neutral textile fiber portfolio to include carbon-zero TENCEL™ fibers with REFIBRA™ technology.
• Air purification and sulfur recovery plant at Lenzing site successfully completed.
• Biodegradability of LENZING™ fibers confirmed by Scripps Institution of Oceanography.

Social Achievements

• Achieved Platinum status from EcoVadis.
• Achieved “AA” rating from MSCI ESG.
• Achieved CDP’s triple “A” rating for environmental leadership and disclosure in climate change, water security and forests.
• Participated in Circular Fashion Partnership.
• Listed on CDP’s Supplier Engagement Leaderboard.

Governance Achievements

• Established an ESG committee to supervise and accelerate sustainability agenda.
• Improved sustainability performance according to MSCI rating to “AA”, resulting in cost savings on interest payments.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Significant price increases in energy and raw materials.
• Technological gaps in textile sorting for recycling.
• Climate change impacts on wood availability and prices.
• Reputational risks in the textile sector.
• Chronic physical climate risks (extreme weather, water scarcity).
• Transition risks (regulatory changes, market shifts).

Mitigation Strategies

• Strategic investments in pulp and fiber projects remained on track despite COVID-19.
• Implemented stringent energy efficiency measures.
• Developed REFIBRA™ and Eco Cycle technologies for textile recycling.
• Established collaborations with Södra and Orange Fiber.
• Proactive disclosure of business practices and environmental footprint.
• Group Policy for Safety, Health, and Environment (SHE) to mitigate heat stress.
• Science-based target (SBT) to reduce greenhouse gas emissions.
• Decarbonization strategy to de-risk operations.

Supply Chain Management

Supplier Audits: >99% of wood suppliers assessed according to FSC® Controlled Wood criteria; 80% of most relevant suppliers assessed by EcoVadis.

Responsible Procurement

• Lenzing Global Supplier Code of Conduct
• Lenzing Wood and Pulp Policy
• EcoVadis supplier assessment
• FSC® and PEFC certifications

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity
• Heat stress

Transition Risks

• Emerging regulations on carbon pricing
• Increased biomass costs
• Reputational risks in the textile sector

Opportunities

• Increased demand for low-emission products
• Decarbonization strategy de-risks operations

Reporting Standards

Frameworks Used: GRI Standards: Core option, TCFD, NaDiVeG

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 9001:2015, FSC®, PEFC, EU Ecolabel, CarbonNeutral®

Third-party Assurance: Independent Assurance Report on the Non-financial Reporting according to §§ 243b and 267a UGB

UN Sustainable Development Goals

• SDG 1
• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 10
• SDG 12
• SDG 13
• SDG 15
• SDG 17

Lenzing's sustainability strategy and targets contribute to these goals.

Sustainable Products & Innovation

• Carbon-zero TENCEL™ and VEOCEL™ fibers
• LENZING™ ECOVERO™ viscose fibers
• VEOCEL™ specialty viscose fiber with Eco Care technology
• LENZING™ Web Technology
• TENCEL™ Luxe filaments
• Hydrophobic LENZING™ Lyocell Dry fibers

Awards & Recognition

• EcoVadis Platinum status
• MSCI ESG “AA” rating
• CDP triple “A” rating
• Canopy’s Hot Button dark green shirt
• Austria’s Leading Companies award for climate protection
• China’s “Pursuer of Excellence in Sustainability 2021” award

Environmental Metrics

ESG Focus Areas

• Circularity & resources
• Climate & energy
• Raw material security
• Biodiversity & ecosystems
• Sustainable innovations
• Health & safety
• Human rights & fair labor practices
• Business ethics
• Digitalization & cyber security
• Stakeholder engagement
• Water stewardship

Environmental Achievements

• 71% Reduction of specific water emissions after wastewater treatment
• 10% Reduction of specific greenhouse gas emissions
• Largest ground-mounted photovoltaic plant in Upper Austria started operation
• Production site in Nanjing (China) partly uses electricity derived from 100 percent renewable resources
• Purwakarta (Indonesia) site has used electricity generated 100 percent from renewable sources since July 2022
• World’s largest lyocell fiber production plant opened in Prachinburi (Thailand)

Social Achievements

• Lenzing joined the UN Global Compact sustainability initiative
• Lenzing joined the Together for Sustainability (TfS) industry initiative
• No changes in employee benefits in 2022

Governance Achievements

• Board remuneration linked to sustainability performance
• Publication of Lenzing’s Climate Transition Plan
• ESG Committee established to accelerate sustainability agenda

Climate Goals & Targets

Environmental Challenges

• Impacts of the war against Ukraine on the Lenzing Group (energy crisis, high inflation, decline in demand)
• Increase in energy and raw material costs
• Conflicts between different material topics and their respective targets (e.g., raw material security vs. biodiversity)
• Challenges in adapting recycled pulp for industrial fiber production and securing the supply of good quality recycled pulp
• Delays in projects due to global situation (war in Ukraine, shortage of semiconductors, China lockdowns, weather conditions)

Mitigation Strategies

• Reorganization and cost reduction program to save EUR 70 million in annualized costs
• Increasing reliance on electricity generation from renewable energies
• Context-based approach to target setting
• Collaboration with Södra to develop recycled pulp
• Implementation of various improvements to reduce CO2 emissions

Supply Chain Management

Supplier Audits: 387 suppliers assessed via EcoVadis (2022)

Responsible Procurement

• EcoVadis rating
• Together for Sustainability Audit
• Internal assessments
• Sustainability clauses in supplier contracts

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity
• Heat stress

Transition Risks

• Emerging regulations on carbon pricing
• Increased biomass costs
• Reputational risk

Opportunities

• Increased demand for low-emission products
• Decarbonization strategy de-risks operations

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001, EU Ecolabel, FSC, PEFC

Third-party Assurance: Independent Assurance Report on the Non-financial Reporting according to 243b and 267a UGB

UN Sustainable Development Goals

• SDG 7 (Affordable and clean energy)
• SDG 9 (Industry, innovation and infrastructure)
• SDG 12 (Responsible consumption and production)
• SDG 13 (Climate action)
• SDG 15 (Life on land)
• SDG 8 (Decent work and economic growth)

Lenzing's initiatives contribute to these goals through renewable energy use, sustainable innovations, circular economy practices, climate change mitigation, biodiversity conservation, and fair labor practices.

Sustainable Products & Innovation

• Carbon-zero TENCEL™ and VEOCEL™ fibers
• LENZING™ ECOVERO™ viscose fibers
• TENCEL™ Modal with Eco Color technology
• TENCEL™ x REFIBRA™ fibers
• LENZING™ Web Technology

Awards & Recognition

• CDP triple ‘A’ rating for climate, water and forestry
• MSCI ESG “AA” rating
• Canopy’s Hot Button Ranking 1st place
• EcoVadis Platinum status
• Austrian Sustainability Reporting Award
• ISPO award

Environmental Metrics

ESG Focus Areas

• Climate change
• Water stewardship
• Biodiversity and ecosystems
• Circular economy
• Raw material security
• Sustainable innovations
• Social responsibility
• Governance

Environmental Achievements

• Successfully converted a production line in Nanjing (China) to TENCEL™ branded modal fibers, with an annual capacity of up to 35,000 tonnes.
• Successfully converted its site Purwakarta (Indonesia) to produce LENZING™ ECOVERO™ branded viscose fibers and VEOCEL™ branded viscose fibers, significantly reducing specific emissions.
• Reduced specific GHG emissions index scope 1, 2 & 3 by 45% (2017=100%)
• Reduced specific sulfur emissions to air by 58% (2014=100%)
• Reduced specific water intake by 21% (2014=100%)
• Reduced specific water emissions after wastewater treatment COD by 21% (2014=100%)
• Reduced specific primary energy consumption by 10% (2014=100%)

Social Achievements

• Launched LENZING™ ECOVERO™ fibers with REFIBRA™ technology, boosting the post-consumer recycling share of its production from 10% to 20%.
• Implemented a pioneering process for real-time delivery tracking of containers, enhancing supply chain transparency.
• Awarded Platinum status in the EcoVadis CSR rating for the third consecutive time.
• Recognized by CDP for transparent reporting and performance in climate change, forests, and water security, achieving a triple “A” rating for the third consecutive year.

Governance Achievements

• Implemented a comprehensive performance program aimed at improving EBITDA and free cash flow.
• Successfully completed a capital increase of around EUR 400 mn and extended debt terms by around EUR 250 mn.
• Established an ESG committee at the management board level and a Supervisory Board ESG Committee.

Climate Goals & Targets

Environmental Challenges

• Continued increase in raw material and energy costs.
• Subdued demand on the world fiber market.
• Geopolitical tensions and supply chain disruptions.
• High interest rates.
• Uncertainty in the global economic outlook.
• Competition from cotton and synthetic fibers.
• Water scarcity in certain regions.

Mitigation Strategies

• Implemented a reorganization and cost reduction program exceeding EUR 70 mn.
• Strengthened balance sheet and liquidity positions through capital increase and debt term extensions.
• Implemented a comprehensive performance program focused on revenue and margin growth, and sustainable cost excellence.
• Developed alternative sourcing strategies.
• Improved resource utilization and optimized site selection for production capacity expansion.
• Premiumization of its global product portfolio and a consistent sustainability and innovation strategy.
• Long-term contractual relationships with selected raw material suppliers.

Supply Chain Management

Supplier Audits: 95% of top suppliers representing 80% of spend via EcoVadis, TfS, or internal assessment by 2025.

Responsible Procurement

• Global Code of Conduct for Suppliers
• EcoVadis-based sustainability assessments
• Long-term supply agreements
• Sustainability clauses in supply agreements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity
• Forest fires

Transition Risks

• Emerging regulations on carbon pricing
• Increased biomass costs
• Reputational risk in the textile sector

Opportunities

• Increased demand for low-emission products
• Decarbonization strategy de-risks operations

Reporting Standards

Frameworks Used: GRI, ESRS, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001, EU Ecolabel, FSC, PEFC

UN Sustainable Development Goals

• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 14 (Life Below Water)
• SDG 15 (Life On Land)

Lenzing's initiatives contribute to these goals through sustainable resource management, renewable energy use, innovation in sustainable materials, and biodiversity conservation.

Sustainable Products & Innovation

• LENZING™ ECOVERO™ with REFIBRA™ technology
• TENCEL™ Modal with Eco Color Technology
• LENZING™ Lyocell Dry fibers
• Cellulosic-based geotextiles for glacier protection

Awards & Recognition

• EcoVadis Platinum rating
• CDP triple A rating
• ITMF Award
• Swiss BIO TOP Award
• Austrian Sustainability Reporting Award