Policies
[ESRS S2-1; GRI 2-23, 2-25, 3-3c, 414-2]
Lenzing has a strict Wood and Pulp Policy, in which it commits not to source from controversial sources. If it is discovered that a supplier has sourced wood or pulp from controversial sources or has violated human or labor rights, the company will first engage with this particular suppliers to encourage consistent practices with Lenzing’s Wood and Pulp Policy. If the response is unsatisfactory, Lenzing will no longer engage with the supplier if the violations are not addressed in a timely manner. For more information on its Wood and Pulp Policy, please see the “Raw material security” chapter.
For further information on Lenzing’s Global Supplier Code of Conduct and the Global Whistleblower Directive, please see the “Business conduct” chapter. For detailed information on Lenzing’s Sustainability Policy, see the “Climate change” chapter. For more information about Modern Slavery Act Transparency Statement (UK only), please see the “Own workforce” chapter.
Channels to raise concerns
[ESRS S2-3; GRI 2-25]
In 2017, Lenzing introduced an online-based whistleblower system designed to empower not only its employees but also customers, suppliers, and other third parties around the world to voice their concerns. This platform allows individuals to report issues such as corruption, bribery, conflicts of interests, antitrust violations, and breaches of capital market law. The BKMS® whistleblower system, or “Tell us”, is accessible on the Lenzing’s website, ensuring that anyone can express their concerns anonymously. Upon receiving reports, a team of legal experts evaluates the incidents and forwards them to the Group Compliance Officer or the Local Compliance Officer if necessary. The anonymous reporting feature ensures that individuals worldwide can share their concerns without the fear of retaliation. For further details, please refer to the “Business conduct” chapter.
Actions
[ESRS S2-4; GRI 3-3d]
A summary of the “Actions taken” can be found in the management approach at the beginning of this chapter.
Lenzing’s suppliers have to declare that they have read and understood the Lenzing’s Suppliers Code of Conduct and that they will comply with it. Lenzing has begun to include sustainability clauses in the contractual conditions for its key chemical suppliers in 2022. These conditions include setting greenhouse gas (GHG) reduction targets approved by the Science Based Target initiative, to provide information about the product carbon footprint and water scarcity at facilities where Lenzing sources products.
EcoVadis is a provider of business sustainability ratings that has rated more than 100,000 companies in more than 175 countries worldwide. The topics cover environment, human & labor rights, business ethics and sustainable procurement, depending on the industry and the size of the rated company. Within the human & labor rights section of the question, the company is rated with regard to social aspect in following areas: employee health & safety, working conditions, social dialogue, career management, child labor incidents and more. In the overall ranking, companies can achieve a score between 0 to 100.
Lenzing aims to encourage more and more of its suppliers to be rated by EcoVadis. The average score of all of Lenzing’s in 2023 suppliers was 54.2 (8.2 points higher in comparison to the average EcoVadis score of 46). The overall performance also increased by 1.9 points compared to 2022 (52.3). This clearly shows that suppliers in Lenzing’s supply chain perform continuously and significantly above the average of suppliers assessed by EcoVadis.
Supplier performance is monitored in the EcoVadis dashboard, which uses various sources to monitor suppliers in its 360° watch. An AI (artificial intelligence) is used to find news across the world about a company, these findings are then evaluated as positive, neutral or negative. Major negative findings can impact the overall score of a company. The dialogue on findings of the supplier monitoring and the corresponding actions are part of the regular review by Lenzing’s buyers and the request for corrective actions as well as part of the management discussion.
In 2023, it was decided to only engage with suppliers that have a minimum score of 45 points in EcoVadis. If a supplier falls below this score, Lenzing will engage with this supplier to start a corrective action plan in order to be able to maintain the relationship. These measures will be reviewed after giving an adequate amount of time. If no corrective action plan has been started Lenzing feels compelled to end the relationship with that supplier. No such cases occurred in 2023.
Furthermore, Lenzing established a quarterly Supply Chain Sustainability Risk Management. These meetings consist of purchasing managers and supply chain and sustainability experts, who discuss and manage risks and opportunities, both internally and externally. Risk assessment on Lenzing’s lowest performing suppliers is also part of these meetings, also including considerations related to human rights. Another aim is to raise awareness of the need for sustainability risk management in Lenzing’s purchasing community and on the supplier side.
Audits conducted through the TfS network also assess some of Lenzing’s suppliers’ performance regarding human rights, ensuring compliance with all applicable laws, such as UN Convention on the Rights of Child, ILO convention and more. For additional information on TfS, please refer to the “Stakeholder engagement” section of this chapter. Lenzing conducted eight audits through this network in 2023, and additionally is able to use the results of audits done by other members of TfS.