Management approach

Material topic: Raw material security

[GRI 3-3]

Wood and dissolving wood pulp are the most important raw materials for Lenzing. There are potential risks associated with their sourcing, such as deforestation, climate changes and biodiversity loss. This is why Lenzing minimizes the environmental risk of procuring wood through responsible sourcing from sustainably managed forests. 100 percent of the company’s wood and pulp sourcing is certified or controlled by globally recognized standards, such as the Forest Stewardship Council (FSC^®) and the Programme for the Endorsement of Forest Certification (PEFC). Lenzing is constantly engaging with different stakeholders (NGOs, customers, investors etc.) in order to meet their expectations and meet upcoming regulation requirements (e.g. EU Green Deal, EU Timber Regulation, supply chain due diligence).

Actual and potential negative and positive impacts, risks and opportunities

Positive

• Wood as a natural and renewable raw material offers expanded business perspectives
• Replacement for fossil-based products
• Due to its contribution to climate change mitigation through carbon sinks in forests and wood products, and substitution of fossil-based product
• Wood is an alternative to agricultural products (e.g. cotton)
• Using wood from sustainably managed forests supports biodiversity

Negative

Own activities:

• Potential reputation loss due to link to deforestation or contribution to biodiversity loss

Business relatioships:

• Sourcing of environmentally and socially controversial wood and pulp
• Loss of biodiversity in poorly managed forest ecosystems
• Sourcing can be impacted by climate change
• Climate and market impact on wood and pulp availability, price and quality

Policies and commitments

• Centrally managed wood and pulp procurement
• Wood and Pulp Policy
• Bioenergy Policy
• CanopyStyle Initiative
• Global Supplier Code of Conduct
• Preference for long-term contracts and direct contacts

Actions taken

• 100 percent of wood-for-pulp-production suppliers assessed according to the FSC^® Controlled Wood criteria
• New bioenergy policy
• Preparations for upcoming EU Deforestation Regulation
• Ramp up of pulp mill in Brazil and site in Thailand after start up in 2022
• PEFC Chain of Custody certificate for fiber production sites in Purwakarta (Indonesia), Nanjing (China) and Mobile (USA)
• Sustainability performance of pulp suppliers was surveyed in a comprehensive questionnaire
• Integration of plantations managed by LD Celulose (Brazil) into the Lenzing Group
• Transportation of some inbound materials changed from road to rail to improve carbon footprint
• Regular audits on forest certification standards (FSC^®, PEFC)¹
• Internal audit management system
• Wood and Pulp certification according to FSC^® and PEFC standards
• Additional third-party verification of Lenzing’s wood and pulp supply as part of the CanopyStyle Initiative and through internal supplier audits
• Lenzing was awarded with a “dark green shirt” in Canopy’s Hot Button Ranking
• CDP Forests “A” rating

Sustainability targets, measures and progress

All of Lenzing’s sustainability targets can be found in the “General information” chapter.

Stakeholders

• Suppliers
• CDP
• Canopy
• Forest Europe, European and national forest strategies
• The Austrian Bioeconomy Strategy
• EU Deforestation Regulation (EUDR)

Responsible

• Member of the Managing Board (Pulp)
• Senior Director Purchasing Wood
• SVP Comm. Affairs Pulp
• SVP Global Purchasing

Supporting

• Corporate Sustainability
• Global QESH